MEASURING THE LONG-RUN FUEL DEMAND OF CARS: SEPARATE ESTIMATIONS OF VEHICLE STOCK, MEAN FUEL INTENSITY, AND MEAN ANNUAL DRIVING DISTANCE.

Abstract

1. The Car Energy-Use Problem Since the first so-called crisis in the early 1970s, a large number of energy demand studies have been carried out (see Dahl and Sterner, 1991a,b, or Goodwin, 1992, for surveys of petrol demand studies). In the 1970s oil imports per se were, both in the USA and Europe, perceived as a major externality, and energy prices were designed to restrain oil use; environmental problems, including the greenhouse effect, are perceived as major problems for all energy-using sectors in the 1990s (see, for example, Barker ?i a/., 1995). As is well known, C02 is considered the most important greenhouse gas, and C02 emissions from the transport sector are approximately proportional to fossil fuel use. Since the transport sector accounts for as much as 35 per cent of fossil fuel use, emissions from this sector are obviously important. However, it is not possible to control C02 using catalytic converters or other available techniques. Alternatives for decreasing traffic related C02 emissions are to decrease overall travel (by reducing the number of cars or the average driving distance per car), increase fuel efficiency, or change to a fuel based on renewable energy resources (or to a hydrogen or electricity system with low reliance on fossil fuels). In this study, we examine aspects of car fuel use that bear on the first two alternatives. We consider primarily long-run estimates, because of inertia in the size and characteristics of the vehicle stock.