Economic Analysis of Pollution Costs From Vehicles In The National CNG Plan Using Optimal Control Theory



This paper seeks to understand the role of the cost of pollution from vehicles fuel in feasibility of CNG national plan. Optimal control theory is used with two target functions, one with and another without the cost of pollution. Model results indicate the high importance of pollution cost in the project feasibility, in such a way that without consideration of that the project will be infeasible. In order to understand the model sensitivity to the cost of pollution, the sensitivity to reduce the cost of pollution had beeb analysed. The result shows that if we can improve the quality of gasoline and increase engine efficiency up to 60% of the amount of pollution reduced, the need to implement the national CNG plan will vanish.
Classification JEL: Q38 ,P28