Title: How to design a zero-emissions vehicle mandate? Simulating impacts on sales, GHG emissions and cost-effectiveness using the AUtomaker-Consumer Model (AUM)

Abstract

We report although numerous studies investigate the impacts of policy on zero-emissions vehicle (ZEV) sales, few address the impacts of a ZEV sales mandate and its particular design features. We use the AUtomaker-consumer Model (AUM) to simulate varying designs of a ZEV mandate in Canada's light-duty vehicle sector, requiring 30% ZEV sales by 2030. Design features include: different penalties for non-compliance, different allocations of credits per ZEV type, and the allowance of banking credits across years. For each policy design, we consider impacts on ZEV adoption, GHG emissions, consumer surplus, automaker profits, and overall policy cost-effectiveness. Results demonstrate trade-offs among the policy designs. Generally, ZEV mandate designs that are more effective at increasing ZEV adoption and decreasing GHG emissions also induce larger reductions in consumer surplus and automaker profits. To achieve the ZEV sales goal, simulations show that a higher non-compliance penalty (CDN$ 10k per credit) is needed. ZEV adoption and GHG reductions are also improved by a “One credit per ZEV” scheme, rather than a “California-style” scheme that gives multiple credits per battery-electric vehicle. Further, allowing automakers to bank credits softens the policy impact on profit and increases automaker compliance in initial years. Across these different design combinations, wemore » find that the most cost-effective design ($CDN/tonne mitigated, including consumer surplus and automaker profits impacts) utilizes a $10k non-compliance penalty and “One credit per ZEV” system that allows banking. Our analysis demonstrates the importance of various ZEV mandate design features, and the complex trade-offs involved among various policy goals.« less

Authors:

Bhardwaj, Chandan ^[1]; Axsen, Jonn ^[1]; McCollum, David  ^[2]

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+ Show Author Affiliations

1. Simon Fraser University, Burnaby, BC (Canada)
2. Electric Power Research Institute (EPRI), Palo Alto, CA (United States)

Publication Date:

Tue Dec 28 00:00:00 EST 2021

Research Org.:

Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)

Sponsoring Org.:

USDOE; Simon Fraser University's Community Trust Endowment Fund; Pacific Institute for Climate Solutions (PICS); Navius Research and Mitacs

OSTI Identifier:

1887671

Grant/Contract Number:  

AC05-00OR22725

Resource Type:

Accepted Manuscript

Journal Name:

Transport Policy

Additional Journal Information:

Journal Volume: 117; Journal Issue: 1; Journal ID: ISSN 0967-070X

Publisher:

Elsevier

Country of Publication:

United States

Language:

English

Subject:

54 ENVIRONMENTAL SCIENCES; climate policy; zero-emission vehicle; ZEV; ZEV mandate; automaker model; technology adoption model; ZEV credit