- Moch, Stephen [Browse]
- Senior thesis
- 115 pages
- Schwartz, Michael [Browse]
- Woodrow Wilson School of Public and International Affairs [Browse]
- Class year
- Summary note
- In meeting ambitious goals for Greenhouse Gas (GHG) reductions in the
Untied States, electrification of the vehicle fleet is widely lauded for its “gamechanging”
potential to substantially reduce emissions. However, there is an
insufficient understanding of the environmental impacts of Electric Vehicles
(EVs) in both the short and long term and how the federal policy efforts to
support EV deployment interact with the emissions profile of these vehicles.
This thesis evaluates the efficacy of present federal transportation policy
aimed at accelerating the deployment of EVs as a policy instrument for
substantively reducing the carbon intensity of the US light duty vehicle fleet.
The federal income tax credit for EVs, which provides a subsidy of up to $7,500,
is evaluated as the primary federal policy tool to propel deployment efforts.
As with other environmental policies, abatement costs per unit of emissions
reduced is the key metric for assessing the efficacy of the policy construct.
Specifically, the environmental efficacy of federal deployment policy is evaluated
under this framework for both cost effectiveness in driving deployment and
associated environmental impact This evaluation brings to light three important
policy conclusions that run counter to the widely held beliefs that have
underpinned current EV policy.
First, the structure of the federal income tax credit is not cost effective in
deploying EVs because it does not account for the income demographics of
potential customers and the behavioral dynamics of vehicle purchasing behavior.
Second, the environmental profile of EVs depends upon the upstream
emissions from the electric power used for vehicle charging. With either an
average emissions or marginal emissions accounting, there is significant regional
variation in the environmental profile of EVs, such that EVs offer net
environmental benefits only in select regions based upon regional carbon
intensity. Looking to the long-term, absent significant decarbonization of the
electricity grid, EVs are not a game-changing technology and will lag beyond
conventional vehicles in terms of environmental performance.
Third, EPA’s structuring of EV credits for CAFE compliance
unnecessarily trades off the near to mid-term GHG emissions reductions potential of EVs. Over-crediting for select deployment of EVs is levered by automakers to
effectively reduce the level of fuel economy improvement across the balance of the
non-EV fleet. This will more than double the lifetime emissions from the average
EV deployed through 2025, resulting in an additional 101 million metric tons of
CO2 emissions across the entire vehicle fleet through 2025, an emissions deficit
that EVs are unlikely to climb out of.
Taken together, the conclusions described above lie counter to the general
policy consensus that the tax credit supports short -term deployment of EVs and
that such deployment will propel decarbonization of the US energy economy.
This raises the further question of whether EVs should still be promoted
as a tool in achieving climate goals or otherwise how existing EV policies should
be revised in order to retain the sought after environmental benefits. With
significant revision to the federal tax credit in order to maximize cost effectiveness
and environmental benefit, as well as the elimination of overcrediting for CAFE
compliance, EVs can maintain their place at the table as an important long-term
measure for GHG abatement. Absent such revisions, along with a parallel
decarbonization of the electricity sector, it is questionable whether EVs should
continue to receive policy support based on perceived environmental benefits.