Question

Describe three economic factors that were involved in the choices made by Brazilians to abandon ethanol powered automobiles after the mid-1980s. Why have many Brazilians recently returned to ethanol powered cars?

Answer 1

Explanation:

During the 1970s, Brazil was importing over 80 percent of the oil it consumed. Large oil imports and high oil prices were damaging Brazil’s economy. In 1975 Brazil implemented the National Alcohol Program. It contained four policies to stimulate ethanol production.

1) It required Petrobras, its major oil company, to purchase a required amount of ethanol.

2) It provided $4.9 billion of low-interest loans to stimulate ethanol production.

3) It provided subsides so that ethanol’s pump price was 41 percent lower than the price of gasoline.

4) It required that all fuels be blended with a minimum of 22 percent ethanol (E22).

Although crude oil prices were low in the 1980s and 90s, Brazil kept its ethanol program alive and moving forward. In 2000, Brazil deregulated the ethanol market and removed its subsidies. The ethanol mandate was maintained. Depending on market conditions, all fuels were required to be blended with 20 to 25 percent ethanol. The current mandate is 25 percent ethanol in gasoline set June 1, 2007.

Brazil aggressively developed cars that operated only on 100 percent ethanol. In 1979 the Fiat 147 was the first modern car to run on pure ethanol. By 1988 almost 90 percent of all new cars manufactured in Brazil were E100 (alcohol only) cars. However, an ethanol shortage in early 1990 caused a major downturn in the demand for E100 cars. In 1990, only 10 percent of the new cars were E100.

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Answer 2

Three economic factors that were involved in the choices made by Brazilians to abandon ethanol powered automobiles after the mid-1980s why have many Brazilians recently returned to ethanol powered cars.

• Brazil's initiative to generate sugarcane-based ethanol fuel dates back to the 1970s and is related to the country's development as the second-largest producer and exporter of ethanol globally. Brazil became the global leader in the sustainable use of bioethanol and a policy model for other developing nations in the tropical regions of Latin America, the Caribbean, and Africa as a result of several significant political and technological developments. Regulations and technological developments
• also made it possible for the nation to reach a significant milestone in ethanol consumption in early 2008, when retail ethanol sales exceeded 50% of the market share for the fleet of gasoline-powered vehicles.
• At the height of the Pró-lcool Program, near the end of the 1980s, Brazil had only once before reached this level of ethanol fuel usage.
• Brazil has an 18–25% ethanol blend requirement for gasoline, which is imposed by the government. Additionally, there is a lot of use of fuels with greater ethanol blends, and flex-fuel cars are widely used (as well as a legacy fleet of ethanol-only vehicles).
• Higher compression ratios are being used in Brazilian flex engines to maximise the advantages of increased ethanol blends and maximise the benefits of ethanol's higher oxygen content, which reduces emissions and increases fuel efficiency.

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