Simulated welfare effects of regulating vehicle emissions by using cocodiesel: the Metro Manila case [Philippines]
2007
Quilloy, A.J.A.
Global issues on the cumulative adverse impacts of air pollution prompted national and international policies to consider use of cleaner fuels. This paper hypothesizes that regulating vehicle emissions by using cocodiesel in accordance with the Biofuel Act and the Clean Air Act (CAA) provides social welfare gains. Presumably, lower vehicle emissions reduce air pollutant concentration leading to decreased health, atmospheric, and structural damages. The study revealed that the use of 1% cocodiesel blend during the first two years and 2% blend in the succeeding years will reduce vehicular PMsub10 emissions in Metro Manila by around 0.30% and 0.58% after 10 and 20 years, respectively. Even with the low projected PMsub10 emission reduction from using cocodiesel at the specified blends, the study indicated that social net welfare gains in the case of Metro Manila accumulate to a present value of US$1.24 million in 10 years, evaluated at 5% discount rate. Sustained use of cocodiesel at the specified blends in the next 20 years can provide a present value of social net welfare gain of about US$3.98 million. However, estimated social net welfare gains would only be realized if cocodiesel feedstock can be ensured and cocodiesel fuel economy would be enhanced.
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