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Electric Vehicle Subsidies in the Era of Attribute-Based Regulations

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  • Ian Irvine

Abstract

Electric vehicle (EV) subsidies are costly and ineffective policy mechanisms in the battle against greenhouse gases. Furthermore, their operation is not well understood given the new regulatory environment governing emissions standards and fuel efficiency that is common to the United States and Canada. Given these standards, the sale of more EVs permits manufacturers to sell fossil fuel vehicles with higher carbon dioxide (CO 2 ) emissions. Paradoxically, more EV sales result in more CO 2 emissions. I explore possible rationales for subsidies, but none is easily validated. Consequently, the case for traditional externality-correcting policies such as carbon taxation that approximate "first-best" solutions is compelling.

Suggested Citation

  • Ian Irvine, 2017. "Electric Vehicle Subsidies in the Era of Attribute-Based Regulations," Canadian Public Policy, University of Toronto Press, vol. 43(1), pages 50-60, March.
    • Handle: RePEc:cpp:issued:v:43:y:2017:i:1:p:50-60
    DOI: 10.3138/cpp.2016-010
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    Cited by:

    1. Randall Wigle, Istvan Kery, 2021. "Rationalizing Policy Support for Zero Emission Vehicles in Canada," LCERPA Working Papers bm0128, Laurier Centre for Economic Research and Policy Analysis.
    2. Hayashida, Sherilyn & La Croix, Sumner & Coffman, Makena, 2021. "Understanding changes in electric vehicle policies in the U.S. states, 2010–2018," Transport Policy, Elsevier, vol. 103(C), pages 211-223.
    3. Randall Wigle, 2019. "The Economic Case for EV Supports? Or: Network Effects, EV Pessimism and EV Supports," LCERPA Working Papers ec0123, Laurier Centre for Economic Research and Policy Analysis, revised 23 Oct 2019.

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