People willing to pay premium for ethanol: study

February 20, 2012 |

In Michigan, an economist at Michigan State University found that when ethanol prices rose 10 cents per gallon, demand for ethanol fell only 12 percent to 16 percent on average, meaning that a mandate might not be the best way to reduce greenhouse gas emissions. Instead he suggested incentives for driving less or for buying more efficient cars.

His study showed that people are willing to pay a premium to help protect the environment, otherwise ethanol use would have fallen off sharply when it got more expensive than gas, as is often the case in Brazil.

Category: Research

Thank you for visting the Digest.