Most people don’t look to economics to solve issues in sustainability. However, Jia Zhong, a member of the Critical Infrastructure and Transportation project and a third-year Ph.D. student in the Department of Agricultural and Consumer Economics, does just that.

By building economic models from complex data sets, Zhong and her teammates can answer the “what-ifs” surrounding renewable energy and national transportation systems, allowing policy-makers to enact changes for a healthier society and environment.

Her specific “what-if” is about cars — in particular flexible-fuel vehicles (FFVs) that can run on multiple types of fuels (such as gasoline mixed with a higher content of ethanol) in a single tank. By studying these vehicles, she can see if increased usage could help improve a current government policy requiring a certain volume of renewable fuel to be mixed into petroleum-sourced fuel.

Diagram of a Flexible Fuel Vehicle, courtesy of Jia Zhong

From an environmental standpoint, these cars are a great alternative to standard vehicles due to their lower emissions. In a perfect world, all people would adopt active transportation or use zero-emissions vehicles simply because it’s the right thing to do. Zhong’s work, however, is in finding more probable — and practical — solutions in an imperfect world. For sustainability economists, the best options for creating a better environment are the ones that have the best chance of widespread adoption.  

She poses a series of economic questions to begin teasing out the optimal conditions for FFVs to comply with government standards: Under what conditions would flex-fuel cars be both economically attractive to consumers and compliant with government standards? How can blended fuel be priced to appeal to consumers? How can these cars be incentivized while being economically feasible?

While it may sound tedious, challenges like these are where economists like Zhong shine.

“Some of the main factors we are dealing with are fuel pricing and the potential welfare cost,” she said, and the goal is to predict the conditions that would benefit the largest amount of people for the lowest amount of money.

To discover such conditions, Zhong jumps into economic simulation — a computer-generated alternate “world” where she can manipulate the circumstances that could make the “what ifs” of FFVs possible. To an untrained eye, the simulation looks like an indecipherable web of graphs, spreadsheets, and variables. But to an economist, it’s a thrilling opportunity to construct a better future.

An example of Zhong’s economic modeling.

With a goal of making FFVs economically feasible to supplement government standards, Zhong combines variations on real-world consumer behaviors with models and data to construct hypothetical outcomes. Like a musician meticulously fine-tuning an instrument, Zhong dials up and down the possibilities of pricing, taxes, and subsidization to create the sweet spot in which thousands of people in this virtual world would go buy a flex-fuel vehicle. What would happen if you taxed E10 fuel while subsidizing E100?  Would the result change if the market price for FFVs decreased? What are the pricing strategies of E100 and E10 for the consumers?  By virtually tweaking different variables, Zhong can find right ingredients for model-world change, then share those as policy suggestions she believes will be productive and feasible to enact in the real world.

Yet at the end of the day, these simulations are just suggestions — not reality. Despite multitudes of tests and simulations, researchers will never be able to accurately predict some aspects of economics.

“Usually the No. 1 question we get is, ‘What percentage can you be sure that this will run the way you predict?’  We always try to supplement real-life data to make it as accurate as possible,” Zhong said. “But what we suggest are just implications, not a direct output.

“That’s just the nature of all research: There’s always a difference between the laboratory and the real world. By being involved with policy, we’re able to contribute our knowledge and make reasonable suggestions for a positive impact,” she said.

Zhong working on her research in her office.

Zhong’s path toward creating a positive impact began half a world away, with an initial interest in engineering. After receiving her bachelor’s degree in Environmental Engineering from Nanjing Normal University in China, she also pursued a master’s in Environmental Science and Engineering at the Chinese Academy of Sciences. From understanding complex engineering structures, Zhong’s curiosity was piqued toward a new subject: economics.

“I think my knowledge of environmental engineering and environmental systems allowed me to have an increased appreciation and curiosity toward economics,” she said. “It made me really think about the effects that science could have on policy.”

This interest took Zhong across the world to Knoxville, Tenn., as she completed another master’s — this one in Agricultural Economics — at the University of Tennessee. She is now pursuing her Ph.D. in Agricultural and Consumer Economics at Illinois, with big plans to make a difference back at home.

“I’d love to take what I’ve learned and return to China and work on environmental policy there,” she said. “I have a responsibility to learn as much as I can with my education so that I can help make the world a better place.”

— Katie Watson, iSEE Communications Intern

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