car fuel economy

Improving Fuel Economy and Saving Fuel in Mexico: Experience in Europe Lee Schipper, Ph. D. Director of Research EMBARQ. The WRI Center for Transport and Environment Saving Transport Fuel in Europe: Outline • Fuel and Vehicle Pricing Strategies • High fuel prices as away of life • Differential fuel prices and taxes • Standards and Fuel Economy Voluntary Agreements • Jawboning in the 1970s and Voluntary Agreement in the late 1990s • Green Owner Fee and other recent targeted programs • Other Complementary Measures • Toll rings, road pricing and congestion charges • Variable charges in place of fixed ones • Modal shifts • Dangers to Avoid • Rebound effects • Cloudy path of Diesels and other “cheap” alternative fuels • Conclusions … “The Road From Kyoto” Transport/Co2 Policies In 6 IEA Countries (US, UK, Germany, Sweden, Denmark, Netherlands) “Saving Oil And Reducing Co2 Emissions In Transport” •Potential Large, Progress Slow, Risks High •Main Elements (except US) •Transport Sector Reform as Umbrella •Voluntary Agreement on Car Fuel Economy (also Japan) •Serious Efforts at Trucking Reform, Rail Revival •Serious Efforts at Land Use, “Soft Modes” in NL, UK, DK, S •Price Signals All Over the European Map •Fuel and Transport Pricing “Variabilisation” over All Modes •Heavy Technology Investment (mainly US, Japan) •Hard Lesson: Many Years to See Impacts Main Lesson From Europe: Embed CO2 and Fuel Saving Policies in Transport, Clean Air Goals “ASIF” Decomposition Air pollution; exposure and health effects. Global CO2 Emissions and Fuel Use from Transport Fuel prices * G = A Si * Ii * Fi,j Emissions per unit of energy or volume or km Modal Energy Intensity Total Transport Activity Veh-km and pass-km by mode Fuel economy standards, fuel prices car taxes Technological energy efficiency Occupancy/ Load Factor Vehicle characteristics Vehicle fuel intensity Real drive cycles and routing Attack All Components of Fuel Use The Economy, Car Prices and Fuel Saving • Incomes, Car Pricing/Taxation Determinant of Car Size and Features • Low new-car prices and taxes, and/or higher incomes > large cars • Differential taxes on motor size, car weight or power boost efficiency • Tax schemes favoring hybrids etc must avoid giving away more car power • Very High New-Car Taxes Discourage Efficiency • Danish 200% tax on new cars hits equipment hard • Consumers own fewer cars but drive them more • Company Car Schemes Hurt Fuel Economy • • • • Company car benefits usually under-taxed Company cars 1970s-1990s bigger than private cars Company cars driven further than private cars Company cars as used cars then hurt fuel economy again … Real Automobile Fuel Intensity – All Fuels Car Stock-average Fuel Intensity MEXICO NEEDS SYSTEM FOR MONITORING FUEL ECONOMY . Fuel Prices and Fuel Saving • Fuel Prices Always High in Europe, Japan • High fuel prices are a way of life, so Europe has small cars • Yearly tax increases to keep real prices roughly constant • Little pressure for change except Canada, Sweden, with big, permanent increases • Perverse Counter Examples • Low diesel, LPG prices lead to little or negative fuel savings • Alternative fuel schemes with low fuel prices backfire similarly • The “Rebound Effect” – Efficiency -> More Driving? · Small (<15%) in US; Modest in Europe (20-30%) · Guard against rebound in car power, size through better tech · Expect modest effect in Mexico (20-30%) European Welfare Systems Deal with Social Impacts … Real Fuel Cost per Vehicle-km for Cars Fuel costs per kilometer generally have fallen since early 1980s Passenger Car Travel per Capita and Car Fuel Intensity vs. Average Fuel Price, 1998 No Where to Go 200% Car taxes Higher fuel prices correlate with lower vehicle fuel intensity NEW CAR FUEL INTENSITIES: Trends, Targets, and “Best Practices” 18 16 14 12 l/100km Red -- US Black -- Japan Green -- Europe 10 8 6 4 2 0 77 86 95 13 European Commission target 140 g/km by 2008 (6.2 l/100km gasoline, 5.3 l/100km diesel, 6.12 weighted average) Japanese targets: 15.1 km/l gasoline, 11.6 km/l diesel by 2010 22 07 16 80 83 89 92 98 01 04 10 19 25 20 19 19 20 20 20 20 19 19 19 19 19 19 20 20 20 20 20 28 VOLUNTARY AGREEMENTS ON FUEL ECONOMY IN THE EU AND JAPAN · What is the EU Voluntary Agreement? · Agreement between producers and authorities on new-car fuel economy improvement by a certain year · Method to measure progress – grams CO2/km over all sales · Preceded by German VA (1995), Volvo unilateral pledge (1996) · EU Voluntary Agreement (with Korean, Japanese car makers) · 20% Reduction in CO2/km by 2008 · To date: 12% improvement, (largely diesels), but slowing · Key risk: increased size, weight, power of vehicles · Don’t Forget “Top Runners in Japan” · More liberal – Improvements by size class only, not fleet wide · Fighting against reduction in tax on large cars in 1990 · Aims for roughly 21% reduction in fuel/km by 2010 Diesel Cars in Europe through late 1990s Apparent Energy Savings Small or Negative · Real Fuel Economy Advantage over Petrol Small · Diesel drivers selecting from among larger cars · Cheap fuel permits purchase of larger car · Equivalent diesel car more powerful than gasoline model · Lower Fuel Prices And Driving Distance · Fuel price gap greater than efficiency gap · Buyers saving money, not energy · Diesel drivers among highest mileage drivers, caused by low diesel price · Bottom Line – More Fuel and CO2, not less. Trends in New Car Fuel Intensity ·EU V.A.Impacts MEXICO NEEDS SYSTEM FOR MONITORING FUEL ECONOMY MARKET-BASED PROGRAMS · Differential Fuel and Car Taxes (pioneered in Sweden) · Higher taxes on dirtier fuels, cars · Worked for unleaded fuel, low-emissions cars · Lower taxes on “best in class” in Holland worked too well (2001); cancelled after six months · Green Owner Fees in Denmark (new car tax 200%!) · Yearly car fees lower than before if original fuel economy high · Small but measurable impact on new car selection · Bolstered by tax break for most efficient cars (<5l/100 km) · Other Important Initiatives – in Both Directions · Sweden tightened company car tax rules to boost fuel economy · Vehicle Scrappage Programs (Denmark) – little or no effect · US tax break for largest SUVs, proposes repealing gas-guzzler tax DANISH YEARLY “GREEN OWNER FEE” TAX SHIFT 2500 Yearly Fuel Consumption Tax, 1998 US Dollars 2000 1500 1000 500 0 0 5 10 15 20 25 KM/L When New Change in the Yearly Fee Based on New-Car Km/L BEYOND FUEL ECONOMY – FLEXING THE LINK · Reducing Car Use or Lowering Peak Capacity · London toll ring – 15% fewer cars entering, most people take bus · Norwegian city toll rings to raise money – small drop in car use · Peak-load charging on Autoroutes n France · Shifting to Less Energy-intensive Modes · Speeding up bus, rail attracts some car users - London · BRT/Bus corridors supported by restricting road space –Paris · Proposals for Further Savings · Shift fixed-taxes to variable taxes (km charges on motorways, urban roads during rush hour etc) · Make part of insurance fees proportional to actual distance driven CONCLUSIONS – EUROPE’S INTEGRATED APPROACH · Voluntary Agreements and other Schemes Save Fuel · Agreement between producers and authorities on new-car fuel economy improvement by a certain year · Method to measure progress – grams CO2/km over all sales · Preceded by German VA (1995), Volvo unilateral pledge (1996) · Fuel Prices Essential to Reinforce VA and Keep Driving Down · 20% Reduction in CO2/km by 2008 · To date: 12% improvement, (largely dieselization), but slowing · Key risk: increased size, weight, power of vehicles · Complementary Measures to Limit Growth in Car Use · Shift to pricing use, not just ownership · Mass Transit and other measures · • Mission to work closely with • Created by Shell Foundation By 2015 there will be 23 megacities, and nearly 300 cities in the developing world are already 1 million strong empowered forces in urban areas to solve transport/environment problems • Working in Mexico City and Shanghai •Transport Indicators in Xi’an, Hanoi, and Bangalore •Flexing the link between urban transport and CO2 emissions Visit us at http://www.embarq.wri.org/en/index.htm