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RAND Paper Finds Diesel and Hybrid-Powered Vehicles Can Provide More Societal Benefits than Gas-Powered Autos
By: RAND Corporation
Published: Nov 9, 2007 at 08:12
Cars and light trucks powered by advanced diesel technology or hybrid technology can provide larger societal benefits than traditional gasoline-powered automobiles, according to a RAND Corporation working paper presented today.
The research by RAND, a non-profit research organization, also found that light trucks and cars continuously fueled by a mixture of 85 percent ethanol and 15 percent gasoline - known as E85 - compare unfavorably with the other two alternatives.
"Rising oil prices coupled with concerns about global climate change are driving debate about which fuels and engines should be used to power the 17 million new cars and trucks sold each year," said John Graham, dean of the Pardee RAND Graduate School and senior author of the research paper.
"Advanced diesel and hybrid technologies show very well in this study, in terms of benefits to the individual and society overall," Graham said. "E85 simply doesn't provide the same benefits."
Graham presented the results of the research today at the annual meeting of the Association for Public Policy Analysis and Management in Washington, D.C. The peer-reviewed paper is available online as part of RAND's working paper series in which initial research results are shared publicly to solicit additional technical feedback.
The research examines the benefits and costs of three alternatives to the gasoline-powered internal combustion engine for the 2010-2020 period: gasoline-electric hybrid technology (as found in the Toyota Prius or the Ford Escape SUV Hybrid), advanced diesel technology (such as the Mercedes-Benz E320 sedan), and dual-fuel vehicles that are powered continuously by E85.
Each alternative has the technological potential for significant market penetration in the near term, the research finds.
Additionally, each technology was compared to a gasoline-powered vehicle. Comparisons were made for three vehicle types: a mid-sized car, a mid-sized SUV and a large pick-up truck. The cost-benefit comparisons were made from the perspective of individual consumers and society in general, on a per-vehicle basis over the life of the vehicle.
The paper ranks the four technologies using benefit-cost analysis. Using most reasonable assumptions, the results placed advanced diesel technology first, followed by hybrid technology, the gasoline engine and E85 technology.
The consumer perspective accounted for technology cost, fuel savings, mobility and performance. The societal perspective also included tailpipe pollutants, greenhouse gas emissions and "energy security costs" for the fuels – the costs to society as a whole from greater dependence on expensive and unstable foreign oil supplies.
Fuel taxes are excluded in the societal case, which is typical of benefit-cost analysis. And the costs are estimations that illustrate relative performance.
The results assume fuel prices of $2.50 per gallon for gasoline, $2.59 per gallon for diesel fuel, and $2.04 per gallon for E85 (including tax credit). The report also examines scenarios where fuel costs are much higher and much lower.
Among the key findings from the consumer perspective:
- For all three vehicle types, the advanced diesel offers the highest savings over the life of the vehicle among the options considered. These savings increase with the size and fuel use of the vehicle: $460 for the car, $1,249 for the SUV and $2,289 for the large pick-up truck;
- The hybrid option has smaller but still considerable savings for SUV applications ($1,066), moderate savings for pick-up applications ($505) but minimal savings over the life of the vehicle for car owners ($198);
- The vehicles operating on E85 cost all three owners more over the vehicle life, with a greater net cost burden for larger vehicles and increased fuel consumption: (-$1,034 for cars, -$1,332 for SUVs, -$1,632 for pick-ups).
Both the hybrid and diesel vehicles are more fuel efficient than their gasoline-powered counterparts: 25 to 40 percent better for hybrid and 20 to 30 percent for diesel, depending on the vehicle.