Personal Tradable Carbon Permits For Road Transport: Heterogeneity of Demand Responses and Distributional Analysis.

Imperial Users onl

Modelling energy demand from higher education institutions: A case study of the UK

Among the various sustainability goals of higher education institutions (HEIs), reducing energy use and carbon emissions are particularly important. However, not much is known about energy demand from the higher education sector – especially since there is a lack of robust models of energy demand in this sector. This paper, the first to utilize a panel dataset and advanced panel econometric techniques in order to model energy use in higher education, investigates variations in energy use between HEIs (cross-sectional analysis), and also changes in energy use over time (temporal analysis), using the UK as a case study. We argue that panel dataset and methods are more useful for understanding growth (and reduction) in energy use within the HE sector than the methods used within previous cross-sectional studies. Results show that, over time and also across the sector, energy consumption in the HEIs increases with increases in income and floor space, but at a slower rate. As HEIs grow overall (in terms of income, floor space, student and staff number) over time, they become more 'energy efficient' (using less energy per unit of area, population or income), indicating economies of scale in the temporal dimension. Results also show that after controlling for income and size, research intensive HEIs consume more energy. We also find a small but statistically significant effect of energy prices on energy consumption, as might be expected. Simulation using the model parameters for an example scenario suggests that energy consumption will continue to increase unless there is a significant change in the policies driving income growth and spatial expansion in the HE sector in the UK

(Unintended) Transport impacts of an energy-environment policy: the case of CNG conversion of vehicles in Dhaka

Motor vehicles are one of the major sources of air pollution in Dhaka, the capital of Bangladesh. The government took various policies to convert the petroleum vehicles on road to run on compressed natural gas (CNG), which allows both air quality improvements and energy security benefits. One of the market friendly policies to encourage the fuel switch was to increase the price differential between CNG and petrol and diesel. This has allowed a wide-scale adoption of CNG as the fuel of choice. However, several years into the policy, there is now a widespread belief among the policymakers that the CNG conversion may have increased car ownership and car travel due to their lower running costs, resulting in more congestion and a reversal of the strategy is on the cards. It is therefore important to test the hypothesis whether CNG conversion had genuinely increased car ownership and car travel in Dhaka city. This paper presents the results of a questionnaire survey and an econometric intervention analysis to understand the impact of CNG conversion on car ownership and car travel in Dhaka. Attention is also given to disentangle the self-selection and price-induced travel effects of CNG conversion. Results show that ownership did not increase, but travel of on-road vehicles increased due to the CNG policy. However, additional congestion costs are still around one half of the health benefits brought about by the policy

A disaggregate analysis of ‘excess’ car travel and its role in decarbonisation

This paper measures ‘excess’ car travel for its role in decarbonisation. On average, each English adult travels around 5,680 miles a year and emits 1,006 kg of CO2. However, the top 5% ‘excess’ car users travel 4.8 times and emit 5.7 times the national average. Four binary logistic regression analyses were used to model the probability that people with specified characteristics belong to the ‘excess’ mileage and emitter groups. Results indicated that gender, employment and socio-economic status, household income (higher quintiles), company car availability, residential location and local population density were highly significant correlates of this ‘excess’ travel mileage. Multiple car ownership, business travel by car, multiple international flight frequencies and ownership of larger and diesel cars were positively associated with excess travel and emissions. A mileage rationing scheme targeting the top 20% users can cut emissions substantially (by 26%) compared to targeting ‘excess’ (top 5%) users only

Imperfect reversibility of air transport demand: effects of air fare, fuel prices and price transmission

There are recent evidence that air transport demand may not have a perfectly reversible relationship with income and jet fuel prices, as is assumed in most demand models. However, it is not known if the imperfectly reversible effects of jet fuel price are a result of asymmetries in the supply side, i.e., asymmetries in cost pass through from fuel prices to air fare, or of demand side behavioral asymmetries whereby people value gains and losses differently. This paper uses US time series data and decomposes air fare and fuel price into three component series to develop an econometric model of air transport demand that is capable of capturing the potential imperfectly reversible relationships and test for the presence or absence of reversibility. We find that air transport demand shows asymmetry with respect to air fare, indicating potential imperfect reversibility in consumer behavior. We also find evidence of asymmetry and hysteresis in cost pass-through from jet fuel prices to air fare, showing rapid increases in airfare when fuel prices increases but a slower response in the opposite direction

New vehicle fuel economy in the UK: impact of the recession and recent policies

Interests in vehicle fuel economy have increased in the past few years with the implementations of more stringent CAFE standard in USA and mandatory carbon emission standard in the EU. We seek to understand the effects of recent policies such as restructuring of Vehicle Excise Duties and EU standard on new vehicle fuel economy in the UK. In the past few years there have been substantial fluctuations in income and fuel prices, offering an interesting testing ground to understand their impact on the demand for fuel economy in vehicles. We use a monthly dataset to find that the emission standard is the largest driver for fuel economy improvements in recent years. Also, contrary to some recent findings in Europe and in UK, we find that income has an effect and that the recession had some role in improving the fuel economy. The effects of fuel prices were relatively small. Restructuring of the VED also improved new vehicle fuel economy in the UK, but the scrappage scheme had no significant effect. Results indicate that both supply and demand side policies are effective in improving fuel economy, although quantitatively the emission standard appears more effective due to its stringency. It is also important to consider the effects of income while devising demand side policies

Personal Carbon Trading: Trade-off and Complementarity Between In-home and Transport Related Emissions Reduction

Personal carbon trading is a downstream version of the cap and trade approaches to mitigating carbon emissions from individual energy use. Although there are studies that investigate the theoretical and implementation issues, there is little evidence over the potential ways people could reduce their emissions when subject to a PCT policy. Especially little is understood about how people make tradeoff between or complement reducing emissions from transport and in-home energy use. This paper addresses this gap by reporting the findings of a questionnaire survey of stated intentions under the policy. Results show that, more people (53.6%) preferred to reduce their emissions from both transport and in-home energy use compared to from only one of these. This shows the flexibility offered by a cap including transport and in-home energy use is more efficient compared to a PCT covering either of these separately. Nearly three-fourths (76.2%) opted to reduce their emissions following a PCT policy. However, among those with above-budget initial emissions, a large share (79.6%) still could not reduce their emissions to below the budget and opted to purchase at least some permits to cover their emissions, indicating the difficulty in reducing emissions at the personal and household level

Aircraft Cost Index and the Future of Carbon Emissions from Air Travel

Air travel accounts for 2% of global CO2 emissions and this proportion is set to grow in the future. There are currently no large scale solutions to drastically reduce the industry’s dependence on oil. Therefore, airlines are looking to use a basket of measures to reduce fuel consumption. Optimisation of the use of cost index (CI) could be a valuable addition to this. By balancing time-dependent costs with the cost of fuel, it controls the speed of the aircraft to achieve the most economic flight time. This has a direct impact on the CO2 emissions from the aircraft, with higher speeds resulting in higher fuel consumption. The aim of this study is to assess the impact that CI has on CO2 emissions for six different aircraft models on a flight-by-flight basis and to evaluate how the CI could be affected by future impacts on the industry for a representative aircraft. Results show that a range of representative CI values for different aircraft models exist and suggest that the maximum benefit for optimising CI values occurs for long range flights. The average saving in CO2 emissions is 1%. Results show that time-related costs have the greatest effect on the optimum CI values, particularly delay costs. On the fuel side of the equation it is notable that a carbon price resulting from the implementation of a market based mechanism has little impact on the optimum CI and only reduces CO2 emissions by 0.01% in this case. The largest savings in CO2 emissions result from the use of biofuels, with reductions of between 9% and 44% for 10% and 50% blends respectively. This study also highlights the need for further research into crew and maintenance costs, cumulative costs and delay induced by congestion and climate change events, as well as policy considerations to ensure that there is a reduction in CO2 emissions. The study concludes that CI should be seen as a valuable tool in both helping to reduce CO2 emissions, as well to assess the impact of future events on the industry

Vulnerability to fuel price increases in the UK: A household level analysis

In highly motorised countries, some sectors of the population own and use cars despite struggling to afford their running costs, and so may be particularly vulnerable to motor fuel prices increases, whether market-led or policy-driven. This paper proposes a novel, disaggregated approach to investigating vulnerability to such increases at the household level. We propose a set of indicators of ‘car-related economic stress’ (CRES), based on individual household level expenditure data for the UK, to identify which low-income households spend disproportionately on running motor vehicles, and to assess the depth of their economic stress. By subsequently linking the dataset to local fuel price data, we are able to model the disaggregated price elasticities of car fuel demand. This provides us with an indicator of each households’ adaptive capacity to fuel price increases. The findings show that ‘Low-Income, High Cost’ households (LIHC) account for 9% of UK households and have distinct socio-demographic characteristics. Interestingly, they are characterised by very low responses to fuel price increases, which may cause them to compromise on other important areas of their household expenditures. Simulations suggest that a 20% increase in fuel prices would substantially increase the depth, but not the incidence of CRES. Overall, the study sheds light on a sector of the population with high levels of vulnerability to fuel price increases, owing to high exposure, high sensitivity and low adaptive capacity. This raises challenges for social, environmental and resilience policy in the transport sector