Alternative-Fuel-Vehicle Policy Interactions Increase U.S. GHG - - PowerPoint PPT Presentation

Alternative-Fuel-Vehicle Policy Interactions Increase U.S. GHG Emissions

Jeremy Michalek Professor Engineering and Public Policy • Mechanical Engineering Carnegie Mellon University

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Fleet Standards Constrain Fleet Emissions

Alternative fuel vehicle (AFV) policies act under the umbrella of fleet standards In the U.S. NHTSA caps light duty fleet-averaged fuel consumption rates EPA caps light duty fleet-averaged GHG emission rates

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Policies to Encourage Transition to AFVs

• 1. AFV incentives in the federal fleet standards

Weighting factors: Treat emissions from non-tailpipe locations as zero Multipliers: Treat 1 AFV sale as though >1 AFVs were sold Permit higher fleet emissions when AFVs are sold

• 2. State zero-emission vehicle (ZEV) mandate

Require automakers to sell vehicles with zero tailpipe emissions

Q: What are the effects of these AFV policies in the context of federal fleet standards?

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Comparing Policy Scenarios

Relative to a pure national fleet standard, we assess what happens when we add AFV-Incentives in the federal fleet standard State ZEV mandates Both policies Two approaches Simulate using several EIA and CARB sales projections Identify mathematical conditions under which policies increase or reduce emissions

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Policy Interactions Increase Emissions

State ZEV policy and AFV-Incentives in fleet standards both encourage AFV adoption But together they do so in a way that increases permitted fleet emissions Given AFV-Incentives in federal standards, any other effort to increase AFV sales triggers higher permitted fleet emissions

Implications

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Where Are We Now?

Trump administration proposed to freeze fleet standards at 2020 levels through 2026 and revoke CA’s waiver CARB, Ford, Honda, BMW, VW agreed to maintain higher standards (July 2019)

• Agreement includes expansion
• f AFV-Incentives in the fleet

standards

Is this a bad deal?

• That depends what other
• ptions were feasible in the

negotiation process

• But there are implications to

consider:

• California Air Resources Board

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Worthwhile Despite These Implications?

EPA and CARB believe that near- term emissions increases are acceptable in the pursuit of a needed long term transition But there are many ways to encourage such a transition

• Some are more effective / costly

than others

It’s not yet clear whether long term benefits specifically enabled by AFV-Incentives in federal fleet standards outweigh near term costs specifically caused by AFV- Incentives

• Near-term emissions increases are

known

• Long-term effect on transition

dynamics are uncertain (we’re working on this now)

“ ” – Federal Register

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TE3 Conference | 18 Oct 2019

Jeremy J. Michalek

Recommendation

Phase out AFV incentives in federal fleet standards

• (If we can do so without substantially increasing fleet emissions

targets in the political/negotiation process)

Focus on other mechanisms to encourage an AFV transition

• Calibrate magnitude of policy push based on magnitude of

externalities

• negative (e.g.: emissions)
• positive (e.g.: inappropriable benefits of EV R&D)

Thank you