Tommaso Luzzati

Natural gas, cars and the environment. A (relatively) 'clean' and cheap fuel looking for users

Abstract This paper deals with the spread of natural gas as a fuel for motor vehicles. Working on the basis of an input-oriented (and life cycle) approach to environmental issues, it is easy to show that natural gas is often relatively clean in comparison to all the other alternatives. Although natural gas is both cheap and very well suited to motoring uses, natural gas vehicles (NGVs) have not achieved widespread diffusion. This is particularly puzzling in Italy, as the relative price after taxes (in caloric equivalents) of natural gas is about 0.3 against gasoline and 0.4 against diesel fuel. The sample survey conducted confirms not only the practical drawbacks of NGVs — mainly the lack of an adequate refueling network — but also a profound lack of information and knowledge about NGVs characteristics. The overall indication for future policy is that economic incentives alone may not be sufficient. An environmental policy aimed at promoting ‘more sustainable’ individual choices (NGVs, in this case) must both consider the institutional framework, and promote the initial spread of appropriate understanding and awareness able to prime the endogenous adoption of ‘greener’ behaviors.