[STBI-10-03-2016] Comparing the social costs of biofuels and fossil fuels: A case study of Vietnam

Dr. Le Thanh Loan

Hall H.001, UEH School of Economics
11:00 am, Thursday, 10-03-2016

Abstract

Biofuel substitution for fossil fuels has been recommended in the literature and promoted in many countries; however, there are concerns about its economic viability. In this paper we focus on the cost-effectiveness of fuels, i.e., we compare the social costs of biofuels and fossil fuels for a functional unit defined as 1 km of vehicle transportation. We base our empirical results on a case study in Vietnam and compare two biofuels and their alter- native fossil fuels: ethanol and gasoline, and biodiesel and diesel with a focus on the blends of E5 and E10 for ethanol, and B5 and B10 for biodiesel. At the discount rate of 4%, ethanol substitution for gasoline in form of E5 or E10 saves 33% of the social cost of gasoline if the fuel consumption of E5 and E10 is the same as gasoline. The ethanol substitution will be cost-effective if the fuel consumption of E5 and E10, in terms of L km 1, is not exceeding the consumption of gasoline by more than 1.7% and 3.5% for E5 and E10 respectively. The biodiesel substitution would be cost-effective if the fuel consumption of B5 and B10, in terms of L km 1 compared to diesel, would decrease by more than 1.4% and 2.8% for B5 and B10 respectively at the discount rate of 4%.

Download the full paper (English, original version): HERE

Download the full paper (Vietnamese, translated version): HERE

Presenter

Dr. Le Thanh Loan is working for Nong Lam University as a lecturer. Dr. Loan completed her Ph.D in Environmental Economics at Wageningen University, the Netherlands in 2016. Her fields of research cover economics of biofuel production, agricultural economics and environmental economics. Dr. Loan has published her research studies on academic journals such as Biomass and Bioenergy.