Natural Gas Vehicles: Consequences to Fuel Markets and the Environment

Roberto Amaral-Santos (), Ariaster Chimeli () and João Paulo Pessoa

No 2023_07, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: Policies to adopt cleaner fuels have become increasingly important, but their impacts on incumbent fuel prices and resulting greenhouse gas emissions are unclear. We use a panel dataset on weekly prices at the gas station level in a large Brazilian state to study how the growth of natural gas, a cheaper and less carbon-intensive alternative to traditional fuels, affected retail prices and profit margins of gasoline and ethanol. Applying an IV strategy, we estimate that prices and margins have fallen. The intensified competition in the fuel market boosted fuel demand, leading to higher emissions of GHGs and other pollutants.

Keywords: Gasoline; Ethanol; Price Competition; Emissions; Brazil (search for similar items in EconPapers)
JEL-codes: L11 L13 Q31 Q41 Q42 Q48 Q53 Q55 Q58 (search for similar items in EconPapers)
Date: 2023-07-19
New Economics Papers: this item is included in nep-ene, nep-env and nep-ind
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Working Paper: Natural Gas Vehicles: Consequences to Fuel Markets and the Environment (2023)
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