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Fuel Economy or Fool Economy?
 

Fuel Economy or Fool Economy?

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By Lee Schipper, Project Scientist, Global Metropolitan Studies, University of California, Berkeley, and Senior Research Engineer, Precourt Energy Efficiency Center, Stanford University. Presented at ...

By Lee Schipper, Project Scientist, Global Metropolitan Studies, University of California, Berkeley, and Senior Research Engineer, Precourt Energy Efficiency Center, Stanford University. Presented at the World Resources Institute. January 22, 2010.

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Fuel Economy or Fool Economy? Fuel Economy or Fool Economy? Presentation Transcript

  • Fuel Economy or Fools Economy: Lessons and Lemons in the Race to Decarb Work Funded by EMBARQ and WRI at Global Metropolitan Studies 2008-2009 Lee Schipper, Ph.D. Global Metropolitan Studies, Univ. of California, Berkeley CA 94707 USA Also Senior Project Engineer Precourt Institute for Energy Efficiency Stanford University
  • Precourt Energy Efficiency Center (PEEC) Stanford University
    • A research and analysis institute at Stanford
    • Established in October 2006
    • Initial funding: $30 million pledge by Jay Precourt
    • Now PEEC Part of the Larger Precourt institute
    • Mission – Keep our PEECers Up
      • To improve opportunities for and implementation of energy efficient technologies, systems, and practices, with an emphasis on economically attractive deployment
      • Focus on the demand side of energy markets
      • Energy efficiency: economically efficient reductions in energy use (or energy intensity)
    • New vehicle test fuel economy and on-road fuel economy improved in the US from 2002 through 2008 after nearly a decade of stagnation, improvements driven both by tighter fuel economy standards for light trucks and higher fuel prices;
    • Slower but longer-term improvements in new and on-road were observed in Europe and Japan starting in the late 1990s, driven by voluntary agreements on fuel economy of new cars as well as a trend towards mini-cars in Japan.
    • New US standards, while a great step, will only give us Europe’s 2008 on road fuel economy by 2035. We have to do better, now (and not wait to 2035)
    • Further analysis of new diesel cars bought and diesel utilization and on-road fuel economy shows only marginal energy and CO2 savings have resulted from a large shift of new vehicle purchases in Europe from gasoline to diesel.
    • Alternative fuels and propulsion are exciting; will they be subsidized to death before they are even alive?
    • Cash-For Clunkers program yielded tiny fuel savings compared to trends in new car purchases from before the C4C program sprung to life. New cars bought under C4C were only 7% more fuel economic than those bought earlier in the year, and they replaced older cars that had only a few years left to live. Clear stagnation or even slight declines in per capita travel of all modes (passenger-km) in Japan, Australia, N. America and Europe. The drop in car use per capita is striking, and partly compensated by greater transit use.
    Fuel Economy or Fools Economy – Key Messages
  • Transport- CO2 Wedges: Avoid and Shift, but also Improve/Mitigate A void CO2-Intensive Development: Singapore Land Use Planning, Congestion Pricing S hift and Strengthen: Mexico City Metrobus I mprove and Mitigate: True Low Carbon Fuels I mprove and Mitigate: Efficient Vehicles
  • . Real Automobile Fuel Economy – All Fuels When the Rubber Hits The Road in MPG Schipper 201? (TRB 2008; submitted to Trans. Policy) Diesel and LPG converted to equivalent gasoline on an energy content basis . Source, L Schipper, based on official national data The Proposed US Standards from 2016 are shown in green
  • New Vehicle Fuel Economy Standards and Targets: Converted to Estimated “On Road” Values Mexico has A Long Way to GO
    • Source, L Schipper, based on official national data
  • Per Capita Travel and GDP 1970-2007 Are We At a Plateau? Millard-Ball and Schipper TRB 2010
  • Car Fuel Use and Per Capita GDP 1970 -2006/7: Is Growth Reversing after 50 years? Millard Ball and Schipper 2010
    • SCHIPPER ADB June 2008
    • Source, L Schipper,based on official national data
    • US – EU Difference
    • 1/3 Fuel Economy
    • 2/3 Distance/per cap.
    • US Japan Difference:
    • 1/10 Fuel Economy
    • 9/10 Distance/capita
    ½ Million BPD Misallocated
  • Diesels Close to 50% of New Car Market in Europe: Yet Savings of CO2 from Diesel Small or Absent
    • Nine Countries Show Little Savings (Counting emissions, not gallons!)
      • On road diesel fleet emissions (gm/km) slightly (<5%) lower than gasoline
      • New vehicle test diesel emissions slightly (<5%)lower than gasoline
      • Diesel cars driven 50-100% more per year than gasoline cars
    • Huh?
      • Cheaper diesel in Europe raises use, backfires on diesel policies
      • Diesels more powerful than gasoline equivalent, buyers choose bigger cars
      • Liter of diesel has 12% more energy, 18% more CO2 than gasoline
    • But Diesel Drivers Are Different -- That’s the Point
      • Long distance drivers buy more expensive diesels with lower fuel costs
      • Increased switching to diesel stimulated by price – switchers drive more
      • Diesel SUVs increase attractiveness of SUVs (“Gelaendewagen”)
    Avoid Subsidizing “Winners” or Creating Loopholes like Flexfuel Vehicles, HOV Exemptions for Hybrids
  • Dieselization in Europe: Where are the Savings? Relative to Gasoline, Diesel Shows Little Energy or CO2 Savings Moreover, Driving Distances Larger Where to put the Prius? PHEV? BEV? (Schipper and Fulton TRR 2009) Source:` official national data
  • Outcome of Voluntary and Regulatory Programs Exact Impacts Hard to Interpret
    • Note: A; Achieved the objectives (with some variation for US F; Failed to clear the set values
    • Source. IEA
      Regulatory standards Voluntary targets   Set year Target Outcome Set year Target Outcome     year   year year   Japan 1999 2010 A 1978 1985 F   2007 2015   1993 2002 F EU       1995 2012           1999 2008 80% US 1975 each MY A*         2007   start 2012?   ?       Canada       1976 Each MY A           2010           2005     China 2004 2005 A??         2004 2008         Australia       1978 1987 F         1987 2000 F         2005 2009  
  • “ Feebates” or “Green Owner Fee” “Bonus/Malus” for France; Yearly Reg. Fee on Danish Cars
    • Amount of Feebate
    • could equal manufacture or consumer cost
    • to achieve the given fuel economy improvement
  • Car Use, Fuel Intensity vs. Fuel Price, 1998 Source IEA- See also Johansson and Schipper 1997 JTEP (JS) JS (1997)- Overall Price elasticity of car fuel close to -1: Mostly Fuel Economy, 0.3 VKT, -0.1 ownership
  • Fuel Consumption - Curb Weight For MY2005 Vehicles Source Prof. John Heywood, MIT 10 1/13/10 Fuel economy (mpg) 50 40 30 25 20 15 10 12 0 5 10 15 20 25 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Curb weight (kg) Fuel consumption (L/100km) Fuel economy (mpg) 50 40 30 25 20 15 10 12 50 40 30 25 20 15 10 12 0 5 10 15 20 25 0 500 1,000 1,500 2,000 2,500 3,000 3,500 Curb weight (kg) Fuel consumption (L/100km)
    • Fuel Economy Standards Help A Lot
      • Mandatory (US CAFÉ) worked, voluntary (Japan, EU) working now
      • Feebate/Bonus-Malus adds to impact
      • Avoid loopholes for “clean fuels” or “green cars”
    • Prices and Incomes Matter – in the Long Run
      • Fuel economy and car characteristics related to fuel prices
      • Car use, power and size related to incomes and fuel prices
      • Fuel choice related to fuel prices
    • Transport Policy Matters Even More
      • Strong urban transport policies/congestion pricing reduce car use
      • Urban transport policies with teeth matter
      • Better traffic management/congestion pricing reduces idling fuel losses
    Fuel Economy and Emissions from Cars – The Hard Policy Lessons As Much as High Fuel Prices Hurt Some They Caused Unimagined Changes
  • Electric Cars: EEV’s*? Plug In Hybrid: When to gas, when to charge? *”Elsewhere Emissions Vehicles” The CO2 and Oil Impact of EEV‘s Not a Simple Matter of Calculation
  • Fuel Economy or Fool’s Economy? Key Issues for Replacing Oil, Reducing CO2 Emissions
    • Costs and Economic Impacts of EEVs
      • Cost of bio-fuels, electric drive compared to future fuel prices?
      • Role of subsidies and other hidden incentives (C-40 wants grid upgrade)
      • Do biofuels costs fall or rise at very large scale (>millions of bpd )?
    • Environmental Impacts: Who Knows?
      • CO2 balance – direct, indirect from fossil inputs, land use, water etc
      • Need smart meters, peak load charging, way of paying road use taxes
      • Without a GHG tax, how are manufacturers, users supposed to act?
    • Real Issue: Picking Winners or Declaring Losers?
      • Can a low-carbon fuels standard succeed without low-carbon fuels?
      • Most EV will be small: why not shrink oil fueled cars first?
      • How can objectives be defined without a pricing system in place?
    Biofuels are expensive, but vehicles cost almost the same E-Vehicles (batteries) have very high costs, but running costs low
  • Vehicle size/power Vehicle technology and fuels Improving Car Fuel Economy/CO 2 Getting The Right Balance (original S Winkleman/CCAP) Vehicle Use, Traffic Can be covered by F.E. Standards Not Covered by Standards
  • WRITET, A NEW GMS TOOL TO DEPICT US TRANSPORT CO2 STRATEGIES, FUNDED BY WRI
    • WRITET
      • Depicts (not “models”) transport/CO2 strategies against baseline
      • Calibrated to US EIA’s NEMS model
      • Allows user-friendly entry of policy assumptions
    • Some Cases Run (including Moving Cooler)
      • Obama campaign suggestion for PHEV
      • Boone Pickens’ CNG/Wind suggestion
      • Cash For Clunkers
    • Lessons Learned
      • Most policy proposals lack key details
      • User can fill in details, but is that fair?
      • Many good proposals portrayed still small compared to CAFÉ, pricing
    There is no Free Lunch for Analyzing Policy Proposals Cash For Clunkers Shows We Should Look Before We Leap
  • Efficiency of CARS How to Frame the Problem
    • The Counterfactual- What would have happened
      • New cars bought under C4C vs all cars bought
      • With no C4C, fuel economy standards rising
      • Clunkers would have died anyway
    • Measuring Fuel Economy and Fuel Use Differences
      • What cars were sold anyway; what were bought anyway?
      • How does the new car supplant/replace existing and clunked cars?
      • How many miles over which to credit savings?
    • Other Effects
      • Rebound Effects – More driving from greater efficiency
      • Extra Co2 from early retirement/manufacture of new cars
      • Impact on vehicle sales and car industry
  • Policies on Fuel Efficiency of CARS Wide Variation
    • Fuel “Economy” As Such
      • US has had CAFÉ standards, which dragged Canada along
      • Japan had 1970s arm-twisting, then 1998 top runners
      • European countries 1970s arm twisting, 1998 EU Voluntary Agreement
    • Other Policies Affecting Fuel Economy Directly
      • France’s new feebates, Danish feebates on yearly reg fees
      • Sweden, now UK tax concessions on efficient cars
      • Different approaches to labeling and requiring MPG in ads, etc
    • Other Policies Shaping Fuel Economy
      • Europeans, Japanese have high fuel taxes, (CDN, OZ in between)
      • Each country has some consideration for “green cars”
      • US has various hybrid, CNG, ethanol schemes
  • . Trends in New Vehicle Fuel Economy Test and “On Road”: Where is C4C? MPG data from ORNL Data book; C4C from US DOT. Test reduced 20% to “on road”
  • Car Use and Car Age in 2001 – Older Means Less Driving (Relationships Have Held for 30 Years) Source:` official national data
  • Efficiency of Cash for Clunkers (CARS) Answering Some of the Questions
    • The Counterfactual- What would have happened
      • C4C cars 7.3% less fuel intensive than others sold first half of MY 09
      • Old cars MPG typical for clunkers - <15
      • Clunkers had 5-8 years left to live at 5000-8000 mi/year
    • Measuring Fuel Economy and Fuel Use Differences
      • Generous credit: New vs old mpg over remaining miles of old
      • Realistic credit: New C4C vs rest of model years MPG x remaining miles
      • More complex: Model “bumping of older cars by new”
    • Other Effects
      • Rebound effects – Small anyway
      • “ Extra CO2”? % Reduction in usage CO2 > (9%) (x reduction in lifetime)
      • Impact on vehicle sales and car industry (tiny)
      • What did people not buy in order to buy cars?
    Ironically, Clunking a Car with 100 000 miles left Saves More Fuel Than Clunking a Clunker of same MPG with Few Miles Left
  • What We Know about Household Vehicles in 2001
    • Source, L Schipper, based on DOT data
  • Household Vehicles in 2001, C4C and Recent Trends in New Vehicle Fuel Economy
    • Source, L Schipper, based on DOT data
  • The Bottom Line Compared With Emissions from LDVs Using Old-New Fuel Economy Difference x Remaining Clunker Mileage (Using marginal impact, reduce by more than 90%)
  • Cash for Clunkers: A Lemon? Washington Post August 9 2009 Op Ed
    • The Policy
      • Variable rebate for old cars of low MPG
      • Trade in for new cars
      • Overall Program less than a month, totally subscribed ($3bn)
    • The Results- More Car Sales Or Just Accelerated Sales?
      • Average car junked < 15 MPG
      • Average new car bought 25.9 MPG
      • Light trucks 3 of ten top sellers; others mostly small cars
    • Interpretation for US: Very Small Results
      • Fuel savings small: clunkers would have died soon anyway
      • Marginal improvements relative to all other cars sold 2009
      • Energy/CO2 embodied in clunked cars only small
    Very Difficult to Show Any Positive Effects Why Do We Have Policies We Cannot Monitor? Free Money Rarely Affects Energy Use the Right Way
  • Cash for Clunkers: A Better Way?
    • Better Formulation
      • Rebate proportional to age and gallons-per-mile (GPM)
      • Rebate starts at new value of 32 test (29 on road)
      • Unsure how to treat clunked vehicles
    • Interpretation for US: Tiny Results
      • Fuel savings small per transaction and small share of cars sold
      • Waiting a few years for stronger CAFÉ may have saved more
      • Embodied energy small but can’t be ignored
    • Serious Thoughts
      • Equity – the poor don’t buy new cars, and scrapped cars had value
      • Efficacy – high price for small oil/CO2 savings and questionable stimulous
      • Energy and CO2 – Why not a carbon and oil tax instead
    Should We Pay People Not to do Dumb Things (Drive Clunkers) What If They Don’t Drive Clunkers Much in the First Place
  • US Transport , Energy and Resources Policy: An Environmental Ponzi Scheme?
    • Policies of Zero or Negative Marginal cost
      • Create incentive to “move forward”
      • Expand capacity but don’t charge
      • Let future generations pay with potholes
    • Sad Examples
      • Fuels Policies (ethanol, cries for electric vehicles)
      • HOV lane access and free tolls (“Prius Envy”)
      • Lack of charging for road use, congestion, parking
    • Sadder Examples from US Economy
      • Mortgage interest tax deduction
      • Water and land pricing
      • Inability to charge for internet bandwidth
    As Much as High Resource Prices Hurt Some Cheap Fuel and Vehicle Use is Hurting More in the Long Run
    • Tighter fuel economy standards should be promulgated now, both in developed and developing countries.
    • The culture of the car must shift to lower power, weight, and size
    • Slower but longer-term improvements in new and on-road were observed in Europe and Japan starting in the late 1990s, driven by voluntary agreements on fuel economy of new cars as well as a trend towards mini-cars in Japan.
    • The diesel work shows that “incentivizing”, combined with low fuel prices, can lead to rebounds or even backfire
    • Will a similar fate make alternative fuels fools? The “Free Lunch” route to lower fuel and CO2 is lined with lemons
    • C4C accomplished little that would have happened anyway. C4c was a very expensive way to save oil or CO2.
    • Shifting some fuel taxation to vehicle use taxation, bolstered by realistic vehicle use fees to pay for transport, would reinforce strongly the current stagnation in personal travel and help fill up mostly empty transit and proposed high-speed rail
    • More broadly, fuel and CO2 policies not backed by fuel, carbon, and vehicle use taxes, however difficult will have a limited impact.
    Fuel Economy or Fools Economy – Conclusions Many Difficult Decisions about Pricing, Fuel Economy, and Fuels: Can they Survive Partisan FUS Politics?
    • Avoid the oil-carbon trap now with strong pricing, land use, urban development, transit non-motorized transport and fuel-economy measures
    • Avoid cheap wheels, the no-no Nano temptation
    • Return the streets to the majority
    • Explore alternatives that mate two-wheelers (electric or fuel) and mini-cars to transit
    • Keep focused on transport and development, with CO2 restraint as a co-benefit – not the other way around
    Conclusions for Developing Countries All of the Above Plus.
  • Many Ways Forward: Research Agenda Is Mobility Plateau or Fuel Economy Rise Permanent?
    • Conventional Fuel Economy Issues
      • Evaluation of feebates (France), green car incentives (US, States, Sweden, etc)
      • Understand C4C to design better, with 2008/9 car data, transaction data
      • Revisit rebound effect, elasticities of driving and car choice wrt fuel prices
      • Alternative Fuels and Drives
      • Compare on a systems basis – what do they to, at what costs and impacts?
      • Fold real costs into present oil-based system to see implied cost of saved oil, CO2
      • Understand EV: high first cost, short variable cost, short range <-> new transport
      • Developing Countries
      • Is the Nano a no-no? Can other forms of mini-cars or two-wheelers be sustainable
      • Why has no country been able to survive the onslaught of personal vehicles?
      • Where can the auto and fuels industries be brought in to this work for real?
  • [email_address] ; mrmeter@stanford.edu The Ultimate Clunker? – Absorbs its own CO2 but Does not Fix Transport Policy Thank You
  • “ Efficiency” Improving Everywhere
  • Efficiency Only Feeding Pep Zip (power/weight) and Weight Look the Same
  • Advanced Technologies: Do Any Make Sense if Cars Weigh 2 tonnes?
    • Advanced Gasoline Internal
    • Combustion Engines (ICE)
    • (Including Biofuels)
    • Modern Clean Diesels
    • (Including Biodiesel
    • Hybrid Powertrains
    • (Including Plug-Ins)
    • Fuel Cells
    • Gasoline Engine Efficiency: Core for 30+ yrs
    • Low cost, reliable, familiar
    • Existing capital & refueling infrastructure
    • Modern Clean Diesel: Core for next 40+ yrs
    • Challenges
    • fuel quality, Tailpipe Emissions
    • standards
    • Hybrid Powertrain: 10
    • -
    • Market driven niche solution
    • Benefits realized in urban driving conditions
    • Hydrogen Internal Combustion Engines:
    • Bridging technology
    • Bridging action / enabler for H
    • 2
    • Economy
    • H
    • 2
    • emissions benefits realized in near term
    • Fuel Cell: Impact in 20
    • -
    • 30 yrs
    • Endgame for the hydrogen economy
    • Environmentally neutral powertrain
    • Gasoline Engine Efficiency: Core for 30+ yrs
    • Low cost, reliable, familiar
    • Existing capital & refueling infrastructure
    • Modern Clean Diesel: Core for next 40+ yrs
    • Challenges
    • fuel quality, Tailpipe Emissions
    • standards
    • Hybrid Powertrain: 10
    • -
    • 15% Market
    • Market driven niche solution
    • Benefits realized in urban driving conditions
    • Hydrogen Internal Combustion Engines:
    • Bridging technology
    • Bridging action / enabler for H
    • 2
    • Economy
    • H
    • 2
    • emissions benefits realized in near term
    • Fuel Cell: Impact in 20
    • -
    • 30 yrs
    • Endgame for the hydrogen economy
    • Environmentally neutral powertrain
    • Hydrogen Powered
    • Internal Combustion
    • Engines
    • Mid Term
    • Long Term
  • New Fuels and Pathways: Many Options, None Cheap