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Policy considerations for renewable fuels

Research Achievements

Policy considerations for renewable fuels

In the area of economics and public policy considerations for renewable and sustainable transportation fuels, Trainee Gabriel Lade and faculty advisor Hilary Sigman have studied factors contributing to availability of E-85 (ethanol/gasoline blend) in the USA. They developed a theoretical model of diffusion and estimated the effect of grant programs, state tax credit programs, and federal tax credit on gasoline station owners’ investment decisions, 1992-2009. Findings show that grant programs and the federal tax credit have a strong, positive effect while state tax credits have no significant effect. The study also estimates the network benefit of additional E85 stations, and finds evidence of strong network effects, suggesting the importance of factors such as number and proximity of participating E85 stations when promoting renewable fuel alternatives. A manuscript is being prepared for publication, and the work was presented in the all-IGERT on-line poster session in May, 2011.