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Reducing Petroleum Consumption from Transportation

  • Christopher R. Knittel

The United States consumed more petroleum-based liquid fuel per capita than any other OECD-high-income country - 30 percent more than the second-highest country (Canada) and 40 percent more than the third-highest (Luxemburg). This paper examines the main channels through which reductions in U.S. oil consumption might take place: (a) increased fuel economy of existing vehicles, (b) increased use of non-petroleum-based low-carbon fuels, (c) alternatives to the internal combustion engine, and (d) reduced vehicles miles travelled. I then discuss how the policies for reducing petroleum consumption used in the US compare with the standard economics prescription for using a Pigouvian tax to deal with externalities. Taking into account that energy taxes are a political hot button in the United States, and also considering some evidence that consumers may not correctly value fuel economy, I offer some thoughts about the margins on which policy aimed at reducing petroleum consumption would have the largest impact on economic efficiency.

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File URL: http://www.nber.org/papers/w17724.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17724.

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Date of creation: Jan 2012
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Publication status: published as Christopher R. Knittel, 2012. "Reducing Petroleum Consumption from Transportation," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 93-118, Winter.
Handle: RePEc:nbr:nberwo:17724
Note: EEE IO PE
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  1. Kenneth A. Small & Kurt Van Dender, 2006. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect," Working Papers 050603, University of California-Irvine, Department of Economics.
  2. Michael Greenstone & Elizabeth Kopits & Ann Wolverton, 2011. "Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation," NBER Working Papers 16913, National Bureau of Economic Research, Inc.
  3. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers 12881, Iowa State University, Department of Economics.
  4. Shanjun Li & Christopher Timmins & Roger H. von Haefen, 2009. "How Do Gasoline Prices Affect Fleet Fuel Economy?," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 113-37, August.
  5. Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
  6. Delucchi, Mark, 2005. "A Multi-Country Analysis of Lifecycle Emissions From Transportation Fuels and Motor Vehicles," Institute of Transportation Studies, Working Paper Series qt8nf3606c, Institute of Transportation Studies, UC Davis.
  7. Weinert, Jonathan X. & Lipman, Timothy, 2006. "An Assessment of the Near-Term Costs of Hydrogen Refueling Stations and Station Components," Institute of Transportation Studies, Working Paper Series qt65f0n732, Institute of Transportation Studies, UC Davis.
  8. Christopher R. Knittel & Douglas L. Miller & Nicholas J. Sanders, 2011. "Caution, Drivers! Children Present: Traffic, Pollution, and Infant Health," NBER Working Papers 17222, National Bureau of Economic Research, Inc.
  9. Lipman, T E & Weinert, Jonathan X., 2006. "An Assessment of the Near-Term Costs of Hydrogen Refueling Stations and Station Components," Institute of Transportation Studies, Working Paper Series qt51c0937x, Institute of Transportation Studies, UC Davis.
  10. Janet Currie & Reed Walker, 2011. "Traffic Congestion and Infant Health: Evidence from E-ZPass," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 65-90, January.
  11. Christopher R. Knittel, 2011. "Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector," American Economic Review, American Economic Association, vol. 101(7), pages 3368-99, December.
  12. Christopher Knittel & Daniel Sperling, 2006. "Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand," Working Papers 625, University of California, Davis, Department of Economics.
  13. Christopher R. Knittel & Ryan Sandle, 2011. "Cleaning the Bathwater with the Baby: The Health Co-Benefits of Carbon Pricing in Transportation," Working Papers 1115, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  14. Ian W. H. Parry & Kenneth A. Small, 2009. "Should Urban Transit Subsidies Be Reduced?," American Economic Review, American Economic Association, vol. 99(3), pages 700-724, June.
  15. Stephen P. Holland & Jonathan E. Hughes & Christopher R. Knittel & Nathan C. Parker, 2011. "Some Inconvenient Truths About Climate Change Policy: The Distributional Impacts of Transportation Policies," Working Papers 1116, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  16. Delucchi, Mark, 2005. "A Multi-Country Analysis Of Lifecycle Emissions From Transportation Fuels And Motor Vehicles," Institute of Transportation Studies, Working Paper Series qt5x20v080, Institute of Transportation Studies, UC Davis.
  17. Meghan R. Busse & Christopher R. Knittel & Florian Zettelmeyer, 2009. "Pain at the Pump: The Differential Effect of Gasoline Prices on New and Used Automobile Markets," NBER Working Papers 15590, National Bureau of Economic Research, Inc.
  18. Christopher R. Knittel & Ryan Sandler, 2011. "Carbon Prices and Automobile Greenhouse Gas Emissions: The Extensive and Intensive Margins," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 287-299 National Bureau of Economic Research, Inc.
  19. Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 36(1), pages 1-25, January.
  20. Delucchi, Mark, 2005. "A Multi-Country Analysis of Lifecycle Emissions From Transportation Fuels and Motor Vehicles," Institute of Transportation Studies, Working Paper Series qt1z392071, Institute of Transportation Studies, UC Davis.
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