• Environmental and Resource Economics Review
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• v.29 no.4
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• pp.443-468
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• 2020

Broad effects of fuel-transition in all type of ground transportation have occurred with the help of the advances in electric vehicle (EV) technologies and the increases in EV supply. This research estimates the economic benefit of air environmental improvements, which results from the fuel-transition of high-mileage business cars(taxies) in metropolis. If we consider power production sector for EV operation, some air pollutants will be produced. In this respect, this research takes both the mixture of power sources in power production level and the driving pattern of business cars into account when investigating the economic benefit in air environment resulted from the fuel-transition of business cars(taxies). According to our results, the business cars' fuel transition from LPG to electricity brings about 21.5￦/km (8.6million won/year) of economic benefit in air environment. These results emphasize the necessity and appropriateness of public polices for expanding power production with renewable energies and facilitating EV distribution.