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Can liquefied petroleum gas vehicles join the fleet of alternative fuel vehicles? Implications of transportation policy based on market forecast and environmental impact

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  • Kim, Kyungah
  • Lee, Jongsu
  • Kim, Junghun

Abstract

Given the growing severity of particulate matter (PM) and greenhouse gas pollution, the Korean government recently began supporting the use of eco-friendly vehicles, such as electric vehicles and hydrogen fuel cell vehicles. However, the uptake of these vehicles has been slower than anticipated because of the high purchase price and lack of infrastructure. Therefore, the Korean government has eased restrictions on liquefied petroleum gas (LPG) vehicles to encourage the vast majority of consumers to purchase LPG vehicles, expecting that they will serve as a stepping stone to switch from internal combustion engine vehicles to their eco-friendly counterparts. However, there have been only a few studies on consumer preferences for LPG vehicles in consideration of this amendment. To analyze consumer preferences for all fuel types, including LPG, this study used a discrete choice experiment combined with a reference-dependent model. The results showed a loss aversion tendency and asymmetric preferences among consumers with regard to vehicle choice. Based on these results, a simulation analysis was conducted to predict the future market share and PM pollution level. The findings indicated that the government's LPG vehicle deregulation policy could achieve positive PM reduction effects in the short term but none in the long term.

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  • Kim, Kyungah & Lee, Jongsu & Kim, Junghun, 2021. "Can liquefied petroleum gas vehicles join the fleet of alternative fuel vehicles? Implications of transportation policy based on market forecast and environmental impact," Energy Policy, Elsevier, vol. 154(C).
    • Handle: RePEc:eee:enepol:v:154:y:2021:i:c:s0301421521001804
    DOI: 10.1016/j.enpol.2021.112311
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