Thursday, September 4, 2014

Yukon/Avenger vs Pilot/Prius -- environmental impacts.

Question:  The previous post calculated household fuel efficiency for two households – one that drove a Honda Pilot and a Toyota Prius and one that drove a GMC Yukon and a Dodge Avenger. 

The benchmark scenario results published in the previous blog are presented below.

Household Fuel Efficiency for two SUV/SEDAN Combinations
Pilot &
Yukon &
Overall Fuel Efficiency

Each gallon of gas consumed emits 19.6 gallons of carbon.  

Assume that the household drives the two SUV Sedan combinations for 14 years at 30,000 miles per year.

How much carbon is emitted from driving for each household? 

There are many estimates of the social cost of carbon emissions.  One estimate found in a government report is that the social cost of carbon emissions in 2020 estimated at a 3.0% discount rate is $43 per metric ton.

What is the social cost of additional carbon emissions stemming from the purchase and use of the Yukon/Avenger combination instead of the Pilot/Prius combination?

Answer:   Each household drives 420,000 (14*30,000) miles over the 14 years they own their vehicles. 

Divide by household fuel efficiency to obtain gasoline consumed over the 14-year period.  (we get over 21,000 gallons for the Yukon/Avenger combination compared to over 12000 gallons for the Pilot-Prius combination. 

There are 19.6 pounds of carbon in a gallon of gasoline.  Hence, 19.6 multiplied by the gallons of gasoline divided by 2000 gives tons of carbon emitted.   We get 206.8 for the Prius/Pilot combination compared to 120 for the Yukon/Avenger combination.

The social cost estimate for the emission of carbon used here is $43 per ton.

Tons x Cost per ton = Cost

We get $8,894 for the Yukon/Avenger combination and $5,160 for the Pilot/Prius combination.

Household Fuel Efficiency for two SUV/SEDAN Combinations
Yukon & Avenger
Pilot & Prius
Overall Fuel Efficiency
Miles Driven
Gas Consumed over 14 years
Tons of Carbon
Social Cost of Carbon

The social cost of carbon under these relatively arbitrary assumptions amounts to $0.42 per gallon.   The household that drives the Yukon/Avenger imposes an additional $3,734 of costs on society.  (The oil industry would point out that this household also pays more in gasoline tax.)

Concluding Remarks: The imprecise and controversial part of this type of analysis involves the assumption of the social cost of carbon emissions.     The social cost estimates from the emission of a ton of carbon range in 2020 range from $12 to $128.   This cost range shifts upward to ($26 to $280) in 2050.  

Regardless, there is a wide dispersion in fuel efficiency for both SUVS and sedans.   Household vehicle choice has a large impact on the pocket book, tax revenues and the environment.  

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