sectoral economic costs and benefits of ghg mitigation - IPCC

Transport
The first category has long been pursued with ups and downs. Several developed countries have
issued regulations or voluntary agreement and some results are presented in Figure 3 for
automobiles and in Figure 4 for high duty vehicles. As noted, with exception of the USA, where
space for technical advances were greater, fuel efficiency improvement was below 20% in the
last 20 years.
One of the reasons for such modest result is the cost of energy intensity improvements. Figure 5
shows some of the available information relating energy intensity reduction with car cost
increase. As noted, even with promising technologies still under development a 50% reduction
on energy intensity will increase car cost by 12%. A much easier to sell idea to decision makers
that is based in current commercial technologies shows that 20% energy intensity reduction is the
maximum which can be performed based in a 12% increase in car cost.
An energy intensity improvement of around 1.5% /yr (which will achieve 20% in 12 years) is
shown in Figure 6. In this scenario, 40% traffic rebound effect due to reduction in the fuel budget
of drivers is assumed.
Institutional and economic measures have modest to medium potential for achieving C emission
reduction. Full budgetary cost pricing has impacts lower than 10% (Figure 1). Adding
externalities can impact as much as 30% in OECD countries (see Figure 2), but this has huge
impact on fuel price as shown in Table 3.
5.1 Fuel Change
Fuel change has a large opportunity in abating C emission. One of the fuels used extensively to
satisfy emission standards in USA is Reformulated Gasoline (RFG). We plan to base the
following discussion using RFG as the baseline.
Ethanol and vegetable oils at this moment are the only commercial renewable fuels being used.
Ethanol production as a fuel is around 20 billion liters per year and the major producers are
Brazil and the United States. Each country uses different routes for the production of ethanol. In
USA, as in all other temperate countries, ethanol used as a fuel is obtained from corn, wheat,
potatoes, while in tropical countries it is derived from sugarcane.
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