Transitions between technological generations of alternative fuel vehicles in Brazil

Thiago Luis Felipe Brito, Towhidul Islam, Marc Stettler, Dominique Mouette, Nigel Meade and Edmilson Moutinho dos Santos

Energy Policy, 2019, vol. 134, issue C

Abstract: The transportation sector is responsible for nearly a quarter of greenhouse gases emissions (GHG); thus, incisive policies are necessary to mitigate the sector’s effect on climate change. Promoting alternative fuel vehicles (AFV) is an essential strategy to reduce GHG emissions in the short term. Here, we study the effects of governmental incentives on the diffusion of ethanol and flex-fuel vehicle technologies in Brazil. We use a multi-generation diffusion model which assumes that new technologies introduce fresh market potential for adopters as well as upgraders from established technologies. Our analysis indicates that tax rates affected the adoption of both gasoline and ethanol technology, but for flex vehicles, the effect of taxation is not significant. The effect of fuel price shocks during the 1990s meant that the introduction of ethanol technology made no significant impact on market potential and a negative word-of-mouth effect contributed to the technology’s failure. In contrast, the introduction of flex technology led to almost a doubling of total market potential. As policy suggestions, we emphasise the importance of tax reduction in addition to promoting versatile technologies, which insulate consumers against price fluctuations.

Keywords: Alternative fuel vehicles; Ethanol and flex cars; Tax impacts; Diffusion model; Technological generations (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0301421519304938
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:134:y:2019:i:c:s0301421519304938

DOI: 10.1016/j.enpol.2019.110915

Access Statistics for this article

Energy Policy is currently edited by N. France

More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().