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Harnessing motorists’ potential demand for hybrid-electric vehicles in Lebanon: Policy options, CO2 emissions reduction and welfare gains

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  • Irani, Alexandra
  • Chalak, Ali

Abstract

Air quality degradation is closely linked to the transportation sector in the Arab region. In Lebanon’s capital, Beirut, levels of many transport-related pollutants are several times higher than world norms. In this paper, we elicit motorists’ propensity to purchase hybrid-electric vehicles (HEVs) in Beirut by means of a choice experiment, and monetize attendant financial, welfare and environmental benefits. Simulations of aggregate switching behavior revealed that under a transitional scenario which assumes that HEVs are exempt from customs and excise duties (recently proposed, yet unimplemented, by the Ministry of Finance), car buyers would enjoy a 30.5 percent reduction in fuel consumption, 20.5 percent CO2 emission reduction and net benefits of $5684 per brand new car sale per year. Simulations of a more sustainable scenario in which customs and excise duties are reduced by around 38 percent reveal equally significant gains, with aggregate yearly fuel cost savings of $18.66 million and CO2 emissions reductions of 23,100 tons. Accordingly, endorsing the proposed tax amendments could be crucial to establishing a viable HEV market in Lebanon, later to be followed by a more sustainable tax incentive scheme consisting of partial tax discounts that would provide a win-win situation for both government and vehicle buyers.

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  • Irani, Alexandra & Chalak, Ali, 2015. "Harnessing motorists’ potential demand for hybrid-electric vehicles in Lebanon: Policy options, CO2 emissions reduction and welfare gains," Transport Policy, Elsevier, vol. 42(C), pages 144-155.
    • Handle: RePEc:eee:trapol:v:42:y:2015:i:c:p:144-155
    DOI: 10.1016/j.tranpol.2015.06.001
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    Cited by:

    1. Yahong Jiang & Qunqi Wu & Min Li & Yulei Gu & Jun Yang, 2023. "What Is Affecting the Popularity of New Energy Vehicles? A Systematic Review Based on the Public Perspective," Sustainability, MDPI, vol. 15(18), pages 1-29, September.
    2. Yan, Jianghui & Tseng, Fang-Mei & Lu, Louis Y.Y., 2018. "Developmental trajectories of new energy vehicle research in economic management: Main path analysis," Technological Forecasting and Social Change, Elsevier, vol. 137(C), pages 168-181.
    3. Yuqing Lin & Jingjing Wu & Yongqing Xiong, 2021. "Sensitivity of the Nonsubsidized Consumption Promotion Mechanisms of New Energy Vehicles to Potential Consumers’ Purchase Intention," Sustainability, MDPI, vol. 13(8), pages 1-20, April.
    4. Marrouch, Walid & Mourad, Jana, 2019. "Effect of gasoline prices on car fuel efficiency: Evidence from Lebanon," Energy Policy, Elsevier, vol. 135(C).

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