2. TRANSPORTATION
Policies for electric vehicles must target not only adoption but also (sustainable) use WOLFGANG HABLA
Current policies aimed at the electrification of passenger transport mainly target the adoption of electric vehicles (EVs). It is equally important that these policies address the actual use of EVs. In many countries, the transport sector is the largest contributor to CO2 emissions. Therefore, decarbonizing this sector represents a critical component to strategies to achieve national climate objectives. One way of accomplishing this is electrification. However, as electrification is associated with several challenges and controversies, additional policies are warranted. First, rates of adoption of EVs are still low in most countries, despite generous subsidies and ‘eco bonuses’. This hints at the possibility that EVs are not (yet) perceived to be viable or attractive substitutes for their gasoline-guzzling counterparts. Second, controversy surrounds the issue of the CO2 impact of EVs as compared to vehicles with internal combustion engines (ICEVs). The relative advantage of EVs in this regard largely depends upon the emissions intensity of electricity generation, as well as the ways in which EVs are actually being used. Research conducted within the Mistra Carbon Exit project shows that battery electric vehicles (BEVs) are, on average, driven fewer kilometers per year than ICEVs. Low mileage of EVs implies an inefficient policy One might be tempted to think that the lower mileage of EVs is good news, since fewer kilometers mean lower CO2 emissions. However, the low mileage of EVs also implies that the subsidies paid on their purchase have very high
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abatement costs per tonne of avoided CO2, indicating an inefficient policy. Furthermore, more plug-in hybrid electric vehicles (PHEVs) were sold in Sweden in Year 2020 than BEVs. This is probably linked to the ability of PHEVs to cover longer distances without recharging, which alleviates what is generally referred to as “range anxiety” among EV users. However, the share of the distance traveled in electric mode is typically very low for PHEVs (and much lower than official statistics by car manufacturers suggest). Even if we consider PHEVs a transition technology to a largely electrified transport sector, these vehicles will be on the roads for 10 years or more. Thus, their unsustainable use can have consequences over a long period. Higher carbon price is desirable Which policies can remedy the issues raised above? From the economic point-of-view, it would be desirable to have a high carbon price, to make EVs more attractive than ICEVs. This would induce consumers to buy EVs, although it would also cause PHEV owners to recharge their vehicles more frequently rather than refuel them. If carbon prices are not sufficiently high, policies that are complementary to purchase subsidies and charging infrastructure expansion are needed to drive electrification of the transport sector in the right direction. Such policies must target not only the adoption of EVs, but also their use.
