The Role of Zero Emission Vehicle Mandates in the Transition to Sustainable Energy for Motor Vehicles

Transcription

1 The Role of Zero Emission Vehicle Mandates in the Transition to Sustainable Energy for Motor Vehicles David L. Greene & Sangsoo Park University of Tennessee Changzheng Liu Oak Ridge National Laboratory Transportation for Sustainability Keck Center, Washington, DC May 6 May 8, 2015

2 Sustainability appears to require an energy transition and that poses a novel challenge for public policy. Without question a radical transformation of the present energy system will be required over the coming decades. (p. xiii) An effective transformation requires immediate action. (p. xv) In all (sustainable, ed.) pathways conventional oil is essentially phased out shortly after (p. 51) (IIASA, Global Energy Assessment, 2012)

3 Energy efficiency is the #1 strategy for reducing GHG emissions from transportation. But even tripling MPG is not enough.

4 The NRC Transitions study (and others) showed that an 80% reduction from 2005 GHG emissions for light-duty vehicles by 2050 will require a transition to zero tailpipe emissions, electric drive vehicles. Wei et al., 2013, Environmental Research Letters, vol. 8; NRC, 2013, Transitions to Alternative Vehicles and Fuels. Includes strong pricing policies, 23 Bgals biofuel + PEVs. Includes 40 billion gallons of cellulosic biofuel

5 How are we going to do that? Vehicles with the potential for nearly zero lifecycle GHG emissions appear to be required to reduce car and light truck emissions by approximately 80% over 2005 levels by For the transition to be cost-effective we must achieve technological advances, learning & economies of scale on the supply side. Barriers such as lack of refueling infrastructure, resistance to novel technology, and lack of diversity of choice must be overcome, as well. Due to the long time constants for change, policies must begin now and must cope with profound uncertainty.

6 The NRC Transitions report s technology assessment found that by reducing vehicles power requirements via reductions in mass, aerodynamic drag and rolling resistance, efficiency improvements help make e-drive vehicles cheaper than ICEs after

7 7 The NRC s Transitions to Alternative Vehicles and Fuels presents a cost/benefit analysis of the transition for light-duty vehicles. Estimated benefits exceeded costs by an order of magnitude. Transition Costs and Benefits (2009 $): U.S. Light-duty Vehicles Planning fallacy?

8 The NRC Transitions model was used to analyze the impacts of the ZEV mandates. Two regions were created to study the interaction between California States and the Rest of the US.

9 The No ZEV case assumed major policy changes. GHG emission/fuel economy standards are continually tightened To about 75 MPG by 2050 (test cycle MPG) Induces feebate like vehicle pricing by manufacturers Motor fuel tax converted to an energy tax Indexed to average MPG of all vehicles in use and inflation Reaches almost $1.50/gallon by 2050 NRC Committee s assumptions about expected technological progress. No ZEV Mandates, federal and state subsidies for alternative fuel vehicles end after billion gallons of low-ghg cellulosic ( drop in ) biofuel by 2050.

10 Without ZEV or incentives for alternative vehicles and fuels after 2015, BEV and PHEV sales die out but BEV sales recover after No fuel cell vehicles are sold.

11 In the ZEV Case, the Rest of US adopts CA policies 5 years later. By leading, California + ZEV states assume a greater initial burden and provide spillover benefits to the rest of the U.S. 11

12 12 There is a lot that we don t understand well at present. Research could reduce uncertainty and save money. 1. Innovators/majority: How many? How much will they pay? For how long? 2. How important is fuel availability? 3. How important is limited range/long recharging time? 4. How valuable are workplace & public recharging? 5. How valuable is the diversity of vehicle choices? 6. How big are scale economies? 7. What will future technology costs be and how will they be affected by learning by doing? 8. How important is coordination with the rest of the world? 9. How sensitive are consumers choices to vehicle and fuel prices? 10. What are viable financing policies & business models for early recharging and refueling infrastructure? 11. Which policies are most cost-effective and acceptable?

13 Even considering both technological and market uncertainties expected excess costs (subsidies) seem likely to be small relative to expected benefits. Getting through the early transition appears to be the challenge. 13

14 14 Accomplishing an energy transition for the public good is a new problem for public policy. It takes decades. The difference between social and private discount rates becomes critical. It requires technological progress which is inherently uncertain. Externalities are involved but not all the social costs are externalities (e.g., monopoly power in world oil market). There are other important market inefficiencies (e.g., energy paradox). The transition creates external benefits which are difficult for private agents to capture. Reduction of risk-aversion of majority via cumulative sales (Direct Network External Benefit) Value of fuel availability to car buyers (Indirect NEB) Learning-by-doing spillover Value of choice diversity (versus scale economies) External benefits and positive feedbacks (scale economies, LBD) are powerful, creating tipping points. What future will we create?

15 THANK YOU. McNutt, B. and D. Rodgers, Lessons Learned from 15 Years of Alternative Fuels Experience , in D. Sperling and J.S. Cannon, eds., The Hydrogen Energy Transition, Academic Press, San Francisco, California. D.L. Greene, et al., Futures (2013) D.L. Greene, S. Park and C.Z. Liu (2014) report.final_.pdf FINAL_.Greene2.pdf

16 Hydrogen fuel cell vehicles are more susceptible to tipping points because of the chicken or egg problem. 16