Abstract for: Accelerating Vehicle Fleet Turnover to Achieve Climate Policy Goals
Reducing carbon emissions from the transportation sector is crucial to achieving climate goals and limiting global warming. Recent efforts by policymakers and car manufacturers have focused on increasing the adoption of low- or zero- emission vehicles in new vehicle sales. However, despite persistent efforts, the sales of these vehicles remain low. Achieving climate goals will likely require policies that incentivize the accelerated retirement of older, less-efficient vehicles to be replaced by new, higher-efficiency vehicles. However, a tension exists between incentivizing the adoption of fuel-efficient gasoline vehicles that are more attractive to consumers in the short-run, but which have limited long-run emission benefits, and incentivizing zero-emissions vehicle technologies, which are less attractive to consumers currently, but which are necessary for deep emissions reduction in the long-run. We use a model of vehicle fleet turnover in the U.S. to show that effective policies should incentivize the purchase of electric vehicles only, alongside a rapid transition to renewable electricity. We demonstrate that such policies can be effective, but that implementation costs remain relatively high. Combining ‘cash-for-clunkers’ with a gas tax or carbon price would help offset the costs incurred while also reducing driving demand, helping to facilitate a timely low-emissions transition.