Can vehicle efficiency beat fuel efficiency in cutting fuel use?

Gioele Figus, J. Kim Swales

Research output: Chapter in Book/Report/Conference proceedingConference contribution book

Abstract

This paper demonstrates the importance of considering both energy and non-energy efficiency improvements in the provision of energy intensive household services. Using the example of private transport, we analyse whether vehicle efficiency can beat fuel efficiency in cutting fuel use. We find that this ultimately depend on the elasticity of demand for transport, the substitutability between vehicles and fuels and the initial share of fuel use in private transport. The framework also allows to identify ‘multiple benefits’ of technical progress in private transport by considering both the ability of such policy to reduce fuel demand and to increase the consumer’s surplus. We extend the partial equilibrium framework by using computable general equilibrium (CGE) simulations to identify the system-wide impacts on total fuel use of the two alternative efficiency changes. Simulation results suggest that the substitution effects identified in the partial equilibrium analysis are an important element in determining the change in total fuel use resulting from these consumption efficiency changes. However, the identification of associated changes in intermediate fuel demand, plus the potential expansionary effects of the improvements in household efficiency transmitted through the labour market can generate general equilibrium effects that vary substantially from those derived using partial equilibrium analysis.
Original languageEnglish
Title of host publicationInternational Conference on Economic Modelling ECOMOD2018
Number of pages39
Publication statusPublished - Jul 2018
EventInternational Conference on Economic Modelling ECOMOD 2018 - University Ca' Foscari, Venice, Italy
Duration: 4 Jul 20186 Jul 2018

Conference

ConferenceInternational Conference on Economic Modelling ECOMOD 2018
CountryItaly
CityVenice
Period4/07/186/07/18

Keywords

  • energy-services
  • technical progress
  • energy efficiencey
  • partial equilibrium
  • general equilibrium

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