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Page 727
Appendix E
Conservation Supply Data for Three Transportation Sectors
This appendix provides information on the calculation method
used to determine cost-effectiveness for three transportation
sectors: light-duty vehicles, heavy trucks, and aircraft.
Light-Duty Vehicles
Light-duty vehicle efficiencies were emphasized in Chapter 23 as
the largest and most thoroughly studied transportation sector.
Table E.1 shows the amount of fuel used by each type of vehicle for
different modes of operation. As discussed in Chapter 23, the long
trend to reduce operating costs via technology improvements while
maintaining or improving other vehicle attributes is shown in
Figure 23.1b. The fuel economy index (FEI), the product of vehicle
mass and fuel economy in miles per gallon, controls for the fact
that vehicle mass increased throughout the interval shown on the
left-hand side of Figure 23.1b. This parameter, used to judge
passenger cars for many decades, is a better indicator of
powertrain efficiency than fuel economy alone. In the last decade
the trend in the FEI, having the same units but measured at a
differently specified test condition, is shown increasing at a
similar rate. The recent trend was maintained, however, in a period
of decreasing car mass and changing market demands for increased
performance.
Research on the knocking properties of fuel in 1913 by Ricardo
and later by Kettering provided the basis for many of the gains
through 1970 (Amann, 1989). In recent times, applications of new
computer technology to engine control, and applications of refined
design techniques and new materials for weight reduction, have led
to improved fuel economy (see Table E.2).
As the hedonic models of Atkinson and Halvorsen (1984, 1990)
show,
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Representative terms from entire chapter:
marginal tons
Page 728
TABLE E.1 Transportation Energy Use by Mode, 1987
Energy Use (trillion Btu)
Thousand Barrels per Day Crude Oil Equivalenta
Percentage of Total
Highwayb
16,213.5
7,658.1
73.6
Automobiles
8,862.9
4,186.2
40.3
Motorcycles
24.6
11.6
0.1
Buses
156.8
74.1
0.7
Transit
74.3
35.1
0.3
Intercity
21.6
10.22
—c
School
60.9
8.8
0.3
Trucks
7,169.2
3,386.2
32.6
Light trucksd
4,031.9
1,904.4
18.3
Other trucks
3,137.3
1,481.8
14.2
Off-Highwayb (heavy duty)e
665.2
314.2
3.0
Construction
209.9
99.1
1.0
Farming
455.3
215.1
2.1
Nonhighwayb
4,490.6
2,121.0
20.4
Air
1,893.9
894.5
8.6
General aviationƒ
139.1
65.7
0.6
Domestic air carriers
1,564.2
738.8
7.1
International air carriers
190.6g
90.0
0.9
Water
1,326.0
626.3
6.0
Freight
1,095.7
517.5
5.0
Domestic trade
370.7
175.1
1.7
Foreign trade
725.0
342.4
3.3
Recreational boats
230.3
108.8
1.0
Pipeline
775.0
366.1
3.5
Natural gas
562.9
265.9
2.6
Crude petroleum
91.0
43.0
0.4
Petroleum product
67.4
31.8
0.3
Coal slurry
3.7
1.7
—c
Water
50.0
23.6
0.2
(continued on page 729)
Page 729
(Table E.1 continued from page
728)
Energy Use (trillion Btu)
Thousand Barrels per Day Crude Oil Equivalenta
Percentage of Total
Nonhighway—continued
Rail
495.7
234.1
2.2
Freighth
471.9
197.4
1.9
Passenger
77.8
36.7
0.3
Transit
41.0
19.4
0.2
Commuter rail
21.4
10.1
—c
Intercity
15.4
7.3
—c
Military Operations
647.3
305.7
2.9
TOTALi
22,016.6
10,399.0
100.0
aBased on
British thermal unit (Btu) content of a barrel of crude oil.
bCivilian
consumption only; military consumption shown separately.
cNegligible.
dTwo-axle,
four-tire trucks.
e1985
data.
fAll
aircraft in the U.S. civil air fleet except those operated under
CFR parts 121 and 127 (i.e., air carriers larger than 30 seats or
having a payload capacity of more than 7500 pounds). General
aviation includes air taxis, commuter air carriers, and air travel
clubs.
gThis
figure represents an estimate of the energy purchase in the United
States for international air carrier consumption.
hIncludes
Class 1, 2, and 3 railroads.
iTotals
may not include all possible uses of fuels for transportation
(e.g., snowmobiles).
SOURCE: Davis et al. (1989).
consumers choose vehicles as a bundle of attributes that include
style, comfort, performance, safety, fuel economy, and price. By
definition, externalities associated with pollution and some safety
issues are not a component of this bundle. Atkinson and Halvorsen
calculate the demand elasticities for the attribute of personal
safety, however, and their estimate of the revealed preference for
this attribute provides a value of life ranging between $2.4
million and $6 million. Similarly, their results indicate that a
significant number of consumers place a great value on
performance.
Safety and performance are directly related to the mass and
power of a vehicle, and fuel economy is inversely related to these
variables. Although the literature on fuel economy (Bleviss, 1988)
identifies vehicles having good performance (11 seconds, 0 to 60
mph) and exceptional fuel economy (81 highway miles or 63 city
miles per gallon (mpg)), these prototypes are not subject to price
or production constraints. Given a price constraint and the laws of
physics, the consumer is forced to trade off desired attributes
against one another.
Page 730
TABLE E.2 Comparison of Vehicle Fuel Economy Technology
Estimates
Technology
Office of Technology Assessment Fuel Economy Gain
(percent)a
Domestic Industry Fuel Economy Gain (percent)a
Shackson and Leach Fuel Economy Gain
(percent)b
Front wheel drive
12.0
5.0
Drivetrain efficiency
Nil
Package weight (1 TWC)
2.0
3.5
Four-cylinder/four-valve
7.5
3.7
Not considered
Four- or five-speed automatic CVT
7.5
3.4
15.0
Electronic transmission control
1.5
0.2
Not considered
Aerodynamics
3.4
3.0
6.0
Tires
0.5
0.5
2.0
Accessories
1.0
1.0
6.0
Engine improvements
Overhead camshaft
6.0
1.1
Roller cams
1.5
2.2
Low-friction rings/pistons
1.5
1.5
7.0
Throttle body fuel injection (over carburetor)
3.0
2.4
Multiport fuel injection (over TBI)
7.0
1.3
Technologies proposed in Shackson and Leach study
now implemented
Lubricants
2.0
Design parameters
NA
NA
5.0
Manual transmission improvements
5.0
Material substitutions
13.0
NOTE: TWC = test weight class; NA = not
applicable; CVT = continuously variable transmission; TBI =
throttle body injection.
a Berger
et al. (1990).
b Shackson
and Leach (1980).
Page 731
When forecasting cost-effective greenhouse gas reductions for
future years, several uncertainties should be recognized. Figure
E.1 makes clear that, given consumer preferences, the relative
sizes of the automobile and lightduty truck markets are highly
interactive and there has been a tendency to shift toward less
efficient light-duty trucks. In addition, the number of
person-miles traveled by each sector depends strongly on fuel price
and other product attributes. On-road fuel economies are typically
lower than those predicted by the EPA (Environmental Protection
Agency) fuel economy test procedure as they depend on differences
in highway speed, congestion, urban-rural travel mix, and average
trip length. To provide a generous estimate of greenhouse gas
reductions, a relatively low composite fuel economy baseline of
19.7 mpg will be used for the combined fleet of automobiles and
light-duty trucks. Travel projections from the MOBILE3 Emission
Model for the year 2000 were used (the MOBILE3 model is an
emissions planning document that has been used by EPA to project
vehicle miles traveled, emission levels, and grams per mile).
The CO2 emitted from the tailpipe
of a vehicle must be adjusted for three additional global impacts.
The first is the fact that other greenhouse gases such as CH4 and N2O
often accompany CO2 emissions from
the transportation sector. In addition, the processing and
transportation of these fuels introduce greenhouse gases into the
atmosphere.
In the case of gasoline, for every 311 g of CO2 emitted, approximately 78 g of CO2 equivalent is emitted as CH4 and 38 g as N2O. In addition,
FIGURE E.1 Components of change in light-duty
vehicles.
Page 732
CO2 emissions and venting during
the processing and distribution of gasoline bring the total
greenhouse gas emissions to between 455 and 507 g CO2 equivalent (see Tables 3 and 6 of
Unnasch et al., 1989). The CO2
emission values in each table provided in this appendix are
therefore multiplied by 1.55 to obtain CO2 equivalence for both the
cost-effectiveness and the emission reduction axis in each
figure.
Ten years ago, a fuel economy technology plan for automobiles
and light-duty trucks was designed by the Energy Productivity
Center of the Mellon Institute. The data from this study have been
used in the calculations summarized in Table E.3 (Shackson and
Leach, 1980) and plotted in Figure E.2 using the least-cost supply
curve framework proposed by the Lawrence Berkeley Laboratory
(Wright et al., 1981).
For each technology, an estimate of consumer purchase cost in
1990 dollars was used as the numerator in the cost-effectiveness
ratio. Reductions in fuel consumption produced by each technology
were used to estimate the corresponding 10-year benefit stream for
the denominator (i.e., reduced greenhouse gas emissions in tons of
CO2 equivalent).1 Because the benefit stream is
directly proportional to vehicle usage, which falls rapidly with
age, it is appropriate to discount the benefit terms for each
interval between the time of purchase and the time benefits are
realized. The effect of discounting is to depreciate future
benefits and thereby raise the calculated cost-effectiveness
values. For the cost-effectiveness calculations in this study, the
CO2-equivalent emissions avoided
were discounted at 3, 6, 10, and 30 percent, and were used in
plotting the four curves in Figure E.2. The discount rates of 3, 6,
and 10 percent represent a societal perspective, while 30 percent
is closer to the discount rate chosen by a consumer when selecting
a vehicle.
Because the technologies save fuel, the cost-effectiveness
values were credited with $1.00/gal for discount rates of 3, 6, and
10 percent and $1.25/gal for the 30 percent rate—hence the
negative values on the conservation supply curves.
The horizontal axis in Figure E.2 represents an estimate of the
cumulative annual reductions in greenhouse gas emissions as though
each device were employed in the 1989 fleet. These quantities were
not discounted (see Table E.3). The 24 technologies analyzed by
Shackson and Leach are ordered by their cost-effectiveness in Table
E.3—hence the monotonic increase in the curve in Figure
E.2.
As mentioned above, many of these most cost-efficient
technologies were introduced, in part, during the 1975 to 1982
vehicle production era. The most expensive were not offered on the
market by the industry. As the industry moved along the learning
curve throughout the decade, old technologies became available at
lower cost, and as the cost of fuel increased, new technologies
became attractive to the consumer. Furthermore, these
Page 733
TABLE E.3 Automobile and Light Truck Data (Shackson and
Leach, 1980)
Technologya
Efficiency Gain (%)
Cost to Consumer (1979 $)
Cost to Consumer (1990 $)
Cost Effectiveness ($/%)
Penetration (%)
Cumulative Improvement (%)
Cumulative Cost (1990 $)
Fleet Fuel Economy (mpg)
1. Weight Reduction
3.50
0.00
0.000
0.000
100.00
3.50
0.00
20.39
2. Aerodynamic Design
4.00
0.00
0.000
0.000
100.00
7.50
0.00
21.18
3. Lubrication
2.00
10.00
17.906
8.953
100.00
9.50
17.91
21.57
4. Access. Ld.
6.00
50.00
89.532
14.922
100.00
15.50
107.44
22.75
5. Red. Roll.
2.00
20.00
35.813
17.906
100.00
17.50
143.25
23.15
6. Impr. Man.
5.00
50.00
89.532
17.906
10.00
18.00
152.20
23.25
7. Front Wheel Drive
5.00
50.00
89.532
17.906
80.00
22.00
223.83
24.03
8. Des. Param.
5.00
50.00
89.532
17.906
70.00
25.50
286.50
24.72
9. TorqLoc.
5.00
60.00
107.438
21.488
40.00
27.50
329.48
25.12
10. Aero. Adds.
2.00
30.00
53.719
26.860
60.00
28.70
361.71
25.35
11. Eng. Des.
5.00
75.00
134.298
26.860
20.00
29.70
388.57
25.55
12. Material Substitution
1.50
25.00
44.766
29.844
100.00
31.20
433.33
25.85
13. 4Sp. Auto.
10.00
190.00
340.220
34.022
90.00
40.20
739.53
27.62
14. Material Substitution
8.00
200.00
358.127
44.766
100.00
48.20
1,097.66
29.20
15. Material Substitution
3.50
100.00
179.063
51.161
100.00
51.70
1,276.72
29.88
16. DISC
20.00
600.00
1,074.380
53.719
15.00
54.70
1,437.88
30.48
17. Engine Design
5.00
160.00
286.501
57.300
100.00
59.70
1,724.38
31.46
18. Vehicle Downsizing
12.00
400.00
716.253
59.688
100.00
71.70
2,440.63
33.82
19. Oper. Par.
5.00
175.00
313.361
62.672
100.00
76.70
2,753.99
34.81
20. Vehicle Downsizing
4.00
400.00
716.253
179.063
100.00
80.70
3,470.25
35.60
21. Turbocharging
5.00
650.00
1,163.912
232.782
32.00
82.30
3,842.70
35.91
(continued on page 734)
Page 734
(Table E.3 continued from 733)
Technologya
Annual Fuel Savings (million gallons)
Annual Savings (Million Tons CO2 Equivalent)
3% (Marginal Tons CO2 Equivalent)
3% ($/ton CO2
Equivalent) $1.00 credit
6% (Marginal Tons CO2 Equivalent)
6% ($/ton CO2
Equivalent) $1.00 credit
10% (Marginal Tons CO2 Equivalent)
1. Weight Reduction
3,243.08
44.99
2.20
-72.08
1.94
-72.08
1.67
2. Aerodynamic Design
6,690.87
92.82
2.34
-72.08
2.06
-72.08
1.77
3. Lubrication
8,320.31
115.42
1.11
-55.88
0.98
-53.73
0.84
4. Access. Ld.
12,870.04
178.54
3.09
-43.07
2.72
-39.21
2.34
5. Red. Roll.
14,283.36
198.15
0.96
-34.73
0.85
-29.76
0.73
6. Impr. Man.
14,629.20
202.94
0.23
-33.92
0.21
-28.84
0.18
7. Front Wheel Drive
17,293.90
239.91
1.81
-32.46
1.60
-27.18
1.37
8. Des. Param.
19,486.17
270.32
1.49
-29.94
1.31
-24.33
1.13
9. TorqLoc.
20,684.86
286.95
0.81
-19.23
0.72
-12.20
0.62
10. Aero. Adds.
21,386.19
296.68
0.48
-4.33
0.42
4.68
0.36
11. Eng. Des.
21,960.72
304.65
0.39
-3.17
0.34
6.01
0.30
12. Material Substitution
22,806.09
316.38
0.57
5.98
0.51
16.37
0.43
13. 4Sp. Auto.
27,498.45
381.47
3.18
24.11
2.81
36.92
2.41
14. Material Substitution
31,190.97
432.70
2.50
70.89
2.21
89.92
1.90
15. Material Substitution
32,683.99
453.41
1.01
104.72
0.89
128.26
0.77
16. DISC
33,909.95
470.42
0.83
121.70
0.73
147.50
0.63
17. Engine Design
35,850.85
497.34
1.32
145.52
1.16
174.49
1.00
18. Vehicle Downsizing
40,047.83
555.56
2.85
179.50
2.51
212.99
2.16
19. Oper. Par.
41,628.32
577.49
1.07
220.20
0.95
259.10
0.81
20. Vehicle Downsizing
42,829.74
594.16
0.81
806.78
0.72
923.77
0.62
21. Turbocharging
43,295.55
600.62
0.32
1,106.65
0.28
1,263.55
0.24
(continued on page 735)
Page 735
(Table E.3 continued from page
734)
Technologya
10% ($/ton CO2
Equivalent) $1.00 credit
30% (Marginal Tons CO2 Equivalent)
30% ($/ton CO2
Equivalent) $1.25 credit
6% Equivalent Fuel Cost ($/gallon)
30% Equivalent Fuel Cost ($/gallon)
1. Weight Reduction
-72.08
0.49
-90.10
0.00
0.00
2. Aerodynamic Design
-72.08
0.52
-90.10
0.00
0.00
3. Lubrication
-50.70
0.25
-17.31
0.16
0.65
4. Access. Ld.
-33.79
0.69
40.24
0.29
1.17
5. Red. Roll.
-22.77
0.21
77.74
0.38
1.50
6. Impr. Man.
-21.70
0.05
81.38
0.39
1.53
7. Front Wheel Drive
-19.77
0.40
87.94
0.40
1.59
8. Des. Param.
-16.45
0.33
99.26
0.43
1.69
9. TorqLoc.
-2.31
0.18
147.38
0.54
2.13
10. Aero. Adds.
17.35
0.11
214.32
0.69
2.72
11. Eng. Des.
18.90
0.09
219.57
0.70
2.77
12. Material Substitution
30.97
0.13
260.66
0.79
3.14
13. 4Sp. Auto.
54.91
0.71
342.14
0.98
3.87
14. Material Substitution
116.66
0.56
552.33
1.45
5.75
15. Material Substitution
161.32
0.23
704.33
1.79
7.11
16. DISC
183.74
0.19
780.64
1.97
7.79
17. Engine Design
215.19
0.29
887.67
2.21
8.75
18. Vehicle Downsizing
260.04
0.63
1,040.34
2.55
10.12
19. Oper. Par.
313.77
0.24
1,223.21
2.96
11.75
20. Vehicle Downsizing
1,088.13
0.18
3,853.92
8.91
35.34
21. Turbocharging
1,484.00
0.07
5,206.33
11.95
47.40
(continued on page 736)
Page 736
(Table E.3 continued from page
735)
NOTES: Cost in 1990 = Cost in 1979 ×
Consumer Price Index (1990)/CPI (1979) = 130/72.6 ×
D (cost to consumer in
1979).
Cumulative improvement = the sum of (penetrations
× efficiency gains).
Cumulative cost = previous cost + new component
cost × %penetration.
Fuel economy = (1 + %improvement) ×
19.7.
Annual fuel savings = (1,889.28 billion miles
traveled in 2000) × [(1/19.7) - (1/mpg)].
Tons of CO2
equivalent avoided = 0.00895 × 1.55 × annual fuel
savings.
At 3%, marginal tons of CO2 equivalent for change in mpg = .00895
× 1.55 × ten years of vehicle miles traveled
(discounted at 3%) × delta reciprocal mpg = .00895 ×
1.55 × 92383 × ((1/mpg(i) - 1/mpg (i - 1)).
At 6%, marginal tons of CO2 equivalent for change in mpg = .00895
× 1.55 × ten years of vehicle miles traveled
(discounted at 6%) × delta reciprocal mpg = .00895 ×
1.55 × 81530 × ((1/mpg(i) - 1/mpg(i - 1)).
At 10%, marginal tons of CO2 equivalent for change in mpg = .00895
× 1.55 × ten years of vehicle miles traveled
(discounted at 10%) × delta reciprocal mpg = .00895 ×
1.55 × 69980 × ((1/mpg(i) - 1/mpg(i - 1)).
At 30%, marginal tons of CO2 equivalent for change in mpg = .00895
× 1.55 × ten years of vehicle miles traveled
(discounted at 30%) × delta reciprocal mpg = .00895 ×
1.55 × 20560 × ((1/mpg(i) - 1/mpg(i - 1)).
Corresponding $/ton of CO2 = marginal cost/marginal tons of CO2 equivalent - fuel credit @ $1.00 per
gallon = (change in cumulative cost/marginal tons of CO2 equivalent) - 111.73/1.55.
aAccess.
Ld. = accessory load reduction; Red. Roll. = reduced rolling
resistance; Impr. Man. = improved manual transmission; Des. Param.
= engine design parameters; TorqLoc=torque converter lock-up; Aero.
Adds = aerodynamic add-on equipment; Eng. Des. = engine design
parameters; 4Sp. Auto. = four-speed automatic with torque converter
lock-up; DISC = diesel and direct injected stratified charge
engines; and Oper. Par. = engine operating parameters.
Page 737
FIGURE E.2 Annual CO2 reduction (Shackson and Leach (1980)
analysis).
technologies became attractive to larger segments of the market
and their penetration was increased.
Such a portfolio of technologies, similar to that proposed by
Shackson and Leach, has been proposed by DOE (Difiglio et al.,
1990). The bulk of the fuel economy gains proposed by DOE are
achieved by introducing known technologies to most models in the
fleet.
While cautioning the reader on the firmness of the benefits and
costs of the DOE portfolio of technologies, Ledbetter and Ross
(1989) have also used a supply curve framework for the analysis of
these data. The conservation supply curve data (utilizing the cost
and fuel economy values for 17 technologies in Table 5 of Ledbetter
and Ross) have been used to generate the curve in Figure E.3 for
the four different perspectives of this study (see Table E.4).
Comparison of the cost-effectiveness values in Figures E.2 and
E.3 shows significant differences. The differences do not result as
much from differences in the technology portfolios as from
differences in the estimates of the costs and benefits of
individual technologies. The disagreement between those who design
and build cars and those who have generated the DOE data lies in
the estimation, measurement, and aggregation of the fuel economy
gain made possible by the technologies themselves when their
Page 748
TABLE E.7 Heavy-Heavy Truck Data (Energy and
Environmental Analysis, Inc., 1984)
Technology
Efficiency Gain
Cost to Consumer (1979 $)
Cost to Consumer (1990 $)
Cost Effectiveness ($/%)
Penetration (%)
Cumulative Improvement (%)
Cumulative Cost (1990 $)
Fleet Fuel Economy (mpg)
1 BodyAero
9.00
540.00
675.65
75.07
100.00
9.00
675.65
7.29
2 FanDrives
4.00
252.00
315.30
78.83
100.00
13.00
990.95
7.56
3 Drivetrn
3.00
190.00
237.73
79.24
100.00
16.00
1,228.68
7.76
4 Access.
2.00
128.00
160.15
80.08
100.00
18.00
1,388.84
7.89
5 Lubric.
1.50
97.00
121.37
80.91
100.00
19.50
1,510.20
7.99
6 AeroDev.
6.00
400.00
500.48
83.41
58.00
22.98
1,800.48
8.23
7 Radials
6.00
1,080.00
1,351.30
225.22
70.00
27.18
2,746.39
8.51
8 Spd. Cont.
5.00
1,335.00
1,670.36
334.07
50.00
29.68
3,581.57
8.68
9 Adv. Rad.
6.00
2,070.00
2,589.99
431.67
70.00
33.88
5,394.56
8.96
Technology
Annual Fuel Savings (million gallons)
Annual Savings (million tons CO2 Equivalent)
3% (Marginal tons CO2 Equivalent)
3% ($/ton CO2
Equivalent) $1.00 credit
6% (Marginal tons CO2 Equivalent)
6% ($/ton CO2
Equivalent) $1.00 credit
10% (Marginal tons CO2 Equivalent)
10% ($/ton CO2
Equivalent) $1.00 credit
1 BodyAero
1,181.39
16.39
98.33
-65.21
83.76
-64.02
71.89
-62.69
2 FanDrives
1,646.04
22.83
38.68
-63.93
32.94
-62.51
28.28
-60.93
3 Drivetrn
1,973.51
27.38
27.26
-63.36
23.22
-61.84
19.93
-60.15
4 Access.
2,182.56
30.28
17.40
-62.88
14.82
-61.28
12.72
-59.49
5 Lubric.
2,334.77
32.39
12.67
-62.50
10.79
-60.84
9.26
-58.98
6 AeroDev.
2,673.57
37.09
28.20
-61.79
24.02
-60.00
20.62
-58.00
7 Radials
3,057.79
42.42
31.98
-42.51
27.24
-37.36
23.38
-31.63
8 Spd. Cont.
3,274.67
45.43
18.05
-25.82
15.38
-17.77
13.20
-8.80
9 Adv. Rad.
3,620.80
50.23
28.81
-9.15
24.54
1.80
21.06
13.99
(continued on page 749)
Page 749
(Table E.7 continued from page
748)
Technology
30% (Marginal tons CO2 Equivalent)
30% ($/ton CO2
Equivalent) $1.25 credit
1 BodyAero
21.12
-59.12
2 FanDrives
8.31
-52.15
3 Drivetrn
5.85
-49.50
4 Access.
3.74
-47.26
5 Lubric.
2.72
-45.50
6 AeroDev.
6.06
-42.18
7 Radials
6.87
47.60
8 Spd. Cont.
3.88
125.29
9 Adv. Rad.
6.19
202.87
NOTES: Average fuel economy = 6.69 mpg. All
equations and notes the same as Table D.3 except for the
following:
Cost in 1990 = Cost in 1984 × CPI
(1990)/CPI(1984)-130/103.9
Fleet fuel economy = 6.69(1 + cumulative
improvement/100)
Fuel saved = (95720 million miles traveled in
2000) × (1/6.69-1/mpg), estimate for heavy trucks in Mobile
3
Marginal Tons of CO2 @ 3% = 6 × 92383 miles ×
.00895 × 1.55 × (1/mpg(i)-1/mpg(i-1))
Marginal Tons of CO2 @ 6% = 6 × 81530 miles ×
.00895 × 1.55 × (1/mpg(i)-1/mpg(i-1))
Marginal Tons of CO2 @ 10% = 6 × 69800 miles ×
.00895 × 1.55 × (1/mpg(i)-1/mpg(i-1))
Marginal Tons of CO2 @ 30% = 6 × 20560 miles ×
.00895 × 1.55 × (1/mpg(i)-1/mpg(i-1))
Truck data taken from Table 3-1 of Environmental
and Energy Analysis (EEA) (1984). When cost-effectiveness data were
not in the EEA report, the mileage at either 50% or 90% of vehicles
providing "cost-effectiveness" was used from the equation on page
3-1 of the EEA report. This "SAVINGS" was then considered at least
as great as the cost of technology.
Page 750
FIGURE E.4 Annual CO2 reduction (light-heavy trucks).
FIGURE E.5 Annual CO2 reduction (medium-heavy trucks).
Page 751
FIGURE E.6 Annual CO2 reduction (heavy-heavy trucks).
Leone and Parkinson (1990), which differ on the relative
importance of market and regulatory mechanisms.
Cross-sectional data sets for several nations are now emerging
to provide additional insight into consumer preferences (see
Schipper, 1991). Similarly, the wide range of values in the
conservation supply curves based on the Shackson and Leach and the
Ledbetter and Ross studies may well be reconciled with these
emerging data. In light of these remaining uncertainties, it is
interesting to examine the automobile and light truck conservation
supply curves in the context of fuel prices and consumer preference
for new car fuel economy.
To examine the interactions of consumer choice and technology,
the panel has plotted conservation supply information in a format
that allows a comparison with consumer decision making. Results
from Tables E.3, E.4, and E.8 derived from Shackson and Leach
(1980), Ledbetter and Ross (1989), and Difiglio et al. (1990),
respectively, are plotted in Figure E.7. Values
Page 752
TABLE E.8 A Supply Curve for Light-Duty Vehicles Fuel Economy
Technologies (Difiglio et al., 1990)
Technology Optionsa
Cumulative Cost (1990 $)
Fleet Fuel Economy (mpg)
Annual Fuel Savings (million gallons)
Annual Savings (Million tons CO2 Equivalent)
3% (Marginal tons CO2 Equivalent)
3% ($/ton CO2
Equivalent) $1.00 credit
6% (Marginal tons CO2 Equivalent)
6% ($/ton CO2
Equivalent) $1.00 credit
1
0.00
20.77
0.00
0.00
-72.08
0.00
-72.08
2
274.56
24.31
13,241.79
183.70
8.98
-41.52
7.93
-37.45
3
425.57
26.38
19,359.97
268.57
4.15
-35.70
3.66
-30.85
4
562.85
28.00
23,491.05
325.88
2.80
-23.10
2.47
-16.57
5
864.86
30.31
28,628.68
397.15
3.49
14.58
3.08
26.11
6
915.20
31.00
30,020.82
416.46
0.94
-18.78
0.83
-11.69
7
1,121.12
31.77
31,496.47
436.93
1.00
133.63
0.88
161.01
8
1,430.00
32.46
32,764.76
454.53
0.86
286.94
0.76
334.73
9
1,830.40
33.31
34,243.30
475.04
1.00
327.14
0.89
380.28
10
2,516.80
34.00
35,398.27
491.06
0.78
804.02
0.69
920.64
11
3,374.80
34.77
36,627.63
508.12
0.83
956.78
0.74
1,093.74
12
4,919.20
35.62
37,918.59
526.03
0.88
1,691.50
0.77
1,926.26
(continued on page 753)
Page 753
(Table E.8 continued from page
752)
Technology Optionsa
10% ($/ton CO2
Equivalent) $1.00 credit
30% (Marginal tons CO2 Equivalent)
30% ($/ton CO2
Equivalent) $1.25 credit
6% Equivalent Fuel Cost ($/gallon)
30% Equivalent Fuel Cost ($/gallon)
1
-72.08
0.00
2
-31.73
2.00
65.26
1.23
0.31
3
-29.30
0.92
388.67
1.46
0.37
4
-25.45
0.62
830.41
1.97
0.50
5
-13.29
0.78
1,042.99
3.49
0.88
6
-12.76
0.21
4,282.57
2.14
0.54
7
-2.81
0.22
4,960.44
8.27
2.09
8
12.85
0.19
7,396.44
14.44
3.64
9
31.94
0.22
8,128.27
16.05
4.05
10
66.28
0.17
14,362.20
35.23
8.68
11
107.23
0.19
18,111.84
41.30
10.43
12
777.68
0.19
20,730.88
70.92
17.89
NOTE: Average vehicle fuel economy = 27/1.3
mpg.
aNumbers
represent combinations of fuel economy technologies phased in as
shown in Table 1 and Figure 3 of Difiglio et al. (1990).
Page 754
FIGURE E.7 Cost of gasoline and efficiency for a
30 percent discount rate.
for the average new-car fleet efficiencies, along with the
average fuel prices for Japan, Sweden, the United Kingdom, the
United States, and West Germany, are also plotted as squares on the
same figure. The automobile fleet fuel economy values were reduced
by a factor of 1.3 since increased urban congestion, higher highway
speeds, and a larger fraction of total miles being driven in urban
areas are projected to increase the difference between the EPA fuel
economy test and actual on-road fuel economy from 15 percent in
1987 to 30 percent in 2010 (Ledbetter and Ross, 1990). Although
Difiglio et al. (1990) estimated a 17 percent difference in the
year 2000, their fuel economy values were also reduced by the
factor 1.3 to be consistent with the other adjustments in Figure
E.7. Since the Shackson and Leach (1980) supply curve was for a
fleet that included light trucks, no adjustment was made to their
base fuel economy of 19.7 mpg.
The perspective in Figure E.7 is that of a consumer expecting a
10-year benefit stream using a 30 percent discount rate on future
benefits. If the consumers in these five nations had no preference
between purchasing fuel economy technology and avoiding the cost of
gasoline, they would choose a set of technologies on one of the
three curves. If, on the other hand, consumers valued other
attributes in their vehicles sacrificed by fuel economy
Page 755
technologies, they would choose a level of fuel economy lower
(i.e., to the left) of the curve in Figure E.7.
If a 30 percent discount rate and a 10-year lifetime are valid
assumptions, consumers in the United States and West Germany choose
a level of fuel economy appropriate for their fuel prices, provided
the Shackson and Leach curve is an accurate indication of the cost
of technology. The fact that three other nations lie a significant
distance from the steepest supply curve indicates either that their
vehicle use patterns are dramatically different or that the
technology cost-effectiveness information is inappropriate.
To summarize the relative magnitude of the values along with
their uncertainties, a sample of average values from two different
regions of two different analyses is presented below.
The discontinuity in the slope of the Difiglio curve at
approximately 31 mpg (on-road fuel economy) is the point at which
sales shifts in the vehicle mix are required to gain higher average
fuel economy levels. Difiglio has labeled this point the ''maximum
technology" point for the year 2000.2 The panel has chosen the region
beyond this point as the region in which life-style adjustments are
incurred. Up to this point, the costs of attributes lost or
compromised by fuel efficiency technologies are ignored even though
consumers consider them substantial.
The average cost-effectiveness values, as distinct from marginal
cost-effectiveness values, which increase significantly as one
moves past 25 mpg, are summarized in Table E.9 as a function of the
discount rate for the three cost curves (see calculations in Tables
E.3 through E.8). The costs are constrained, however, by the fact
that the panel has not considered cumulative costs exceeding $3850
(1990 dollars) from the Shackson and Leach study, and Ledbetter and
Ross did not go beyond cumulative costs of $609 (1990 dollars).
To provide a visual impression of the relative magnitudes and
their uncertainties, Figure E.8 illustrates values derived for the
discount rate of 6 percent for light duty vehicles. One should keep
in mind that data for the automobile and light truck calculations
were from three sources, thereby providing the indication of
uncertainty.
Notes
1. Throughout this report, tons (t) are metric; 1 Mt = 1 megaton
= 1 million tons; 1 Gt = 1 gigaton = 1 billion tons.
2. Subsequent to the preparation of these results, K. G. Duleep
(co-author with Difiglio and Green) has refined the estimate of the
"maximum technology" point. Duleep estimates that in 1996 all
available technologies could produce a CAFE mpg of 29.3 (22.5
on-road) and in 2001 all available technologies could produce a
CAFE mpg of 36.0 (27.7 on-road) (Plotkin, 1991).
Page 756
TABLE E.9 Implementation Cost of Vehicle Efficiency
Improvements
Net Implementation Cost ($/t CO2 equivalent)
Emission Reduction (Mt CO2 equivalent/yr)
d=3%
d=6%
d=10%
d=30%
NO CHANGE IN FLEET MIX
Full-Cycle Emission Accounting
Light vehicle, Ledbetter and Ross
-52
-50
-46
-2
379
Light vehicle, Shackson and Leach
-10
-1
+10
+191
389
Light vehicle, Difiglio
-26
-22
-13
+128
397
Heavy truck
-42
-38
-32
+45
61
Aircraft retrofit
+230
13
Consumption Emission Accounting
Light vehicle, Ledbetter and Ross
-81
-78
-71
-3
245
Light vehicle, Shackson and Leach
-16
-2
+16
+296
251
Light vehicle, Difiglio
-40
-34
-20
+198
256
Heavy truck
-65
-59
-50
+70
39
Aircraft retrofit
+357
8
CHANGE IN FLEET MIX
Full-Cycle Emission Accounting
Light vehicle, Ledbetter and Ross
+13
+25
+41
+293
35
Light vehicle, Shackson and Leach
+306
+356
+427
+1,609
108
Light vehicle, Difiglio
+527
+657
+777
+2,820
129
Consumption Emission Accounting
Light vehicle, Ledbetter and Ross
+20
+39
+64
+454
23
Light vehicle, Shackson and Leach
+474
+552
+663
+2,494
70
Light vehicle, Difiglio
+887
+1,018
+1,204
+4,370
83
Page 757
FIGURE E.8 Potential emission reduction from
light-duty vehicles.
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