Assessing the GHG emission effects of fuel-switching in the transportation sector

Natural gas has been suggested in the literature as a bridge fuel to reduce near term carbon dioxide emissions. The present study investigates the direct and indirect effects of fuel-switching toward natural gas. An energy supply model named MESSAGEix is used along with transportation demand regression equations. The MESSAGEix energy supply model is based on the reference energy system and can assess the energy life cycle effects of switching between energy carriers. The framework is used to estimate the direct and indirect effects of switching from gasoline to compressed natural gas in the light duty transportation sector of Iran. The relative price of gasoline to natural gas is changed by 20% and 73% in two scenarios. Results show that the greenhouse gas emission effects act through five main channels: direct gasoline and gas substitution effect, income effect, upstream gas and upstream oil and energy supply system costs. The greenhouse gas emission is reduced due to the direct and indirect effects by around 2100 and 5100 gigagram carbon dioxide equivalent in scenarios 1 and 2 of relative price change. The total energy system costs also decrease by 0.3% and 1.3% respectively.