Estimation of energy consumption due to the elimination of an environmental tax in Ecuador

Abstract

The National Assembly of Ecuador repealed the Environmental Tax on Vehicle Pollution, which taxed the engine displacement of vehicles. This article aims to make an estimate of the energy savings that would have been achieved if this tax had been maintained and executed as originally planned. A methodology was applied to forecast energy consumption, using the Long-range Energy Alternative Planning software, with which two scenarios were analyzed. In the first one, it was considered that new vehicles would be acquired, with the same behavior a buyer would have had from 2012 to 2019, when this tax was a current law. The second scenario, without this imposition, considered that new vehicles would be acquired according to the demand pattern between 2008 and 2011, the period prior to this demand. From the analysis of each scenario, it was concluded that by 2025, there would have been an approximate reduction of 29,200,000 gal of gasoline eq. that represents a saving of 5% in the respective energy consumption, as well as a lower emission of carbon dioxide. A tax on the engine displacement of the vehicle discourages the purchase of unnecessarily large vehicles, which implies a lower consumption of petroleum derivatives and a lower emission of greenhouse gases.