Alternative fuels a tough sell, MIT forecasters say

An economic analysis of alternative fuels shows that consumer behavior and lack of infrastructure means that gasoline will run cars for decades.

Dethroning the gasoline-powered internal combustion engine is not likely to happen soon and will only occur with decades of policies to promote alternative fuels, according to an economic analysis done by the Massachusetts Institute of Technology.

MIT on Wednesday published a summary of the research that used economic models to study how alternative fuels could come to market.

The "systems dynamic" model, which simulates how markets behave, took into account several factors, including how often people buy new cars, how manufacturers affect the market and vehicle attributes.

The researchers' conclusion is that alternative fuels suffer from a catch-22 situation.

People won't buy cars that run on alternative fuels, even if they're far more fuel-efficient, because of concerns over fuel availability. Similarly, distributors won't build the infrastructure if there is not sufficient demand.

"The challenge is not just introducing an AF (alternative fuel) vehicle," said postdoctoral associate Jeroen Struben of the Sloan School of Management, who participated in the research. "Consumer acceptance, the fueling infrastructure and manufacturing capability all have to evolve at the same time."

MIT said alternative fuels are necessary to address environmental and energy security goals. It did not make a specific policy recommendation, but it said any policies to entice alternative fuels, such as a carbon tax or subsidies to build filling stations, would need to be in place for many decades, even during times of dropping gasoline prices.

 

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