Recently I interviewed Jeffrey Rissman of the NGO Energy Innovation about an interesting couple of articles recently published on Forbes online and the NGO’s Energy Policy Simulator. What caught my eye was the headline, “Four Policies Can Reduce U.S. Transport Emissions 45%, Cut Oil Use 23%, Save 5,300 Lives Per Year,” which was produced based on analysis conducted using the Simulator. I also wrote about it recently for my regular Top 5 feature. A prior set of articles dealt with an outlook on electric vehicles. Following are a couple of highlights from our discussion. You can listen or download the podcast below or listen to it in ITunes.
“I guess I’m somewhat surprised. I mean, one of the benefits of having an objective tool with all of this transparent data is you can run it and see what comes out. If it leads to an insight, a good policy I was overlooking because it hasn’t been in the news very much or whatever reason, then the Simulator’s doing its job. A feebate [one of the four policies] is sort of like that where it’s just not a policy we tend to hear a lot about, but I understand why it’s strong after the Simulator reads out to me. It’s both a tax and a subsidy rolled into one and it helps overcome this psychological barrier where people are so cost sensitive to the upfront cost of a vehicle and much less so to the lifetime fuel savings of the vehicle. It sort of make sense in retrospect.
As far as the low carbon fuel standard dimension, that’s also a policy we can model and it is a strong policy in our simulation, at least out through 2030 or so. We saw a drop off in effectiveness after that point because we were seeing current levels of electric vehicle penetration high enough to satisfy the low carbon fuel standard settings we were choosing in our policy package. To continue to be effective beyond 2030, assuming that the world does in fact follow a strong EV deployment trajectory, it may be necessary to implement sort of an accelerating low carbon fuel standard to ration it up significantly in those out years.”
“So, EVs are a very important factor in how the transportation sector, at least in the United States, evolves in the next 10 to 15 years and even more so, I think out to 2050. That’s because they gain a lot in market share. Our simulation had a fairly aggressive prediction for EV deployment, showing it could be up to 65% of new vehicle sales by 2050. That would require strong deployment of charging infrastructure. As I said, it’s a bit of a bullish prediction, but actually less so than Bloomberg New Energy Finance’s prediction. This is something that drives decarbonization into the transportation sector, even in a business as usual (BAU) case. In our modeling, the transport sector is the only sector in the U.S. economy that achieves emissions reductions through 2050 in a BAU case. The other sectors do require additional policy to get there.”