Transportation's Role in Reducing U.S. Greenhouse Gas Emissions ...

Transportation’s Role in Reducing U.S. Greenhouse Gas Emissions: Volume 2
Heating Value
g CO2e per VMT for LDVs,
(Btu/gal unless
noted)
Lower Higher
Carbon
Content
(% by wt)
by Life-Cycle Stage
(GREET 1.8b)
Feedstock Fuel Operation Total
(U.S. avg grid) Btu/kWh Btu/kWh
b Results are for steam reforming of natural gas.
Price Elasticities and Vehicle Operating Costs
An “elasticity” is a percent change in one value with respect to a percent change
in another. For measures that affect the cost of travel, one important elasticity is
the percent change in fuel use with respect to a percent change in the cost of
that travel (e.g., cents per mile). The value of the elasticity will be different
depending upon whether the change in travel cost is measured relative to just
one component of travel (e.g., fuel price) or all relative to the full cost of travel
(including vehicle operating costs, user-borne crash costs, and time savings).
Elasticities were used in this report to estimate response to some travel pricing
measures, using a methodology consistent to that applied in the Moving Cooler
study.
There is an extensive body of literature on elasticities for travel costs. Much
recent work has focused on responses to changes in motor fuel prices, since
motor fuel prices have been highly volatile, and since overall prices for travel
are less volatile. While there is an extensive body of literature on transportation
price elasticities, Small and Van Dender (2007) provide a review of previous
studies as well as recent estimates using data through 2004. The authors
estimate elasticities of VMT, fuel intensity (gallons/mile), and total fuel
consumption (VMT multiplied by fuel intensity) with respect to fuel price
changes. Elasticities are estimated both over a historical time period (1966 to
2004) and within the past few years (2000 to 2004) to examine how elasticities
might be changing. These findings are shown in Table A.2.
Table A.2 Historical and Recent Long-Run Elasticities With
Respect to Fuel Price
Calculated Long-Run Price Elasticities With
Respect to Fuel Price of: Elasticity 1966 to 2004 Elasticity 2000 to 2004
Vehicle Miles Traveled -0.210 -0.057
Fuel Intensity -0.193 -0.191
Fuel Consumption -0.363 -0.237
Rebound Effect (Percentage) 21.0% 5.7%
A-9