ERIC Number: EJ969571
Record Type: Journal
Publication Date: 2012-Jun
Pages: 32
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-0276-8739
EISSN: N/A
Are Green Vehicles Worth the Extra Cost? The Case of Diesel-Electric Hybrid Technology for Urban Delivery Vehicles
Krutilla, Kerry; Graham, John D.
Journal of Policy Analysis and Management, v31 n3 p501-532 Sum 2012
A central question for environmental policy is whether the long-term benefits of energy-saving technologies are sufficient to justify their short-term costs, and if so, whether financial incentives are needed to stimulate adoption. The fiscal effects of incentivizing new technologies, and the revenue effects of using the technology, are also policy relevant, given current fiscal constraints. This study evaluates the economic and fiscal effects of promoting diesel-electric hybrid technology in urban delivery vehicles, an application supported by U.S. policymakers. An economic model is used to simulate the conditional probability density functions of the net present values (NPVs) of diesel electric hybrids annually from 2012 to 2030. The NPV time paths, which reflect fuel price, environmental, and technology trends, show the expected dates that hybrids become economically viable, and allow an evaluation of the net benefits of hybrid technology as an investment over the entire simulation horizon. The NPV distributions are computed for five stakeholder classes, including transportation firms, parties benefiting from reduced externality damages, state and local governments, and the larger society. The analysis shows that hybrid technology investment does not appear to be justified from a societal perspective at a 7 percent discount rate, but the probability for positive net returns increases substantially at a 3 percent rate. (Contains 26 footnotes, 8 tables, and 2 figures.)
Descriptors: Motor Vehicles, Incentives, Cost Effectiveness, Economics, Probability, Simulation, Stakeholders
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Publication Type: Journal Articles; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Grant or Contract Numbers: N/A