Biofuels, Climate Policy and the European Vehicle Fleet
Name
MITJPSPGC_Rpt176.pdf
Size
664.87 KB
Format
Adobe PDF
Checksum (MD5)
7cf01eca3648a2b0041e3b333e8dd548
Author(s)
Rausch, Sebastian
Reilly, John M.
Paltsev, Sergey
Gitiaux, Xavier
Date Issued
August 2009
Publisher
MIT Joint Program on the Science and Policy of Global Change
Citation
Report no. 176
Series/Report no.
;Report no. 176
Abstract
We examine the effect of biofuels mandates and climate policy on the European vehicle fleet, considering the prospects for diesel and gasoline vehicles. We use the MIT Emissions Prediction and Policy Analysis (EPPA) model, which is a general equilibrium model of the world economy. We expand this model by explicitly introducing current generation biofuels, by accounting for stock turnover of the vehicle fleets and by disaggregating gasoline and diesel cars. We find that biofuels mandates alone do not substantially change the share of diesel cars in the total fleet given the current structure of fuel taxes and tariffs in Europe that favors diesel vehicles. Jointly implemented changes in fiscal policy, however, can reverse the trend toward more diesel vehicles. We find that harmonizing fuel taxes reduces the welfare cost associated with renewable fuel policy and lowers the share of diesel vehicles in the total fleet to 21% by 2030 compared to 25% in 2010. We also find that eliminating tariffs on biofuel imports, which under the existing regime favor biodiesel and impede sugar ethanol imports, is welfare-enhancing and brings about further substantial reductions in CO2 emissions.
Description
Abstract and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/).
