Choice at the pump: measuring preferences for lower-carbon combustion fuels

Abstract

A decarbonized future will require a transition to lower carbon fuels for personal transportation. We study consumer preferences for combustion fuels including gasoline, diesel, natural gas, and E85 (85% ethanol and 15% gasoline) using consumer choice survey data from two settings: online ( n = 331) and in-person at refueling stations ( n = 127). Light-duty vehicle owners were asked in a series of choice tasks to choose among fuels that varied in type, price, CO _2 emissions, and location of origin for a hypothetical vehicle that could accept all fuels. We find that the majority of gasoline and E85 users are willing to substitute towards other fuels at today’s prices and attributes, while diesel users have a strong preference for diesel fuel. We also find that respondents are willing to pay on average $150/ton CO _2 avoided from fuel consumption—more than most estimates of the social cost of carbon. Thus, communicating the climate benefits from alternative fuels may be an important strategy for decarbonizing the transportation sector.

Keywords

• alternative vehicle fuels
• consumer preferences
• conjoint analysis
• discrete choice models
• sustainability