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Carbon Policy and the Emissions Implications of Electric Vehicles

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  • Kenneth Gillingham
  • Marten Ovaere
  • Stephanie Weber

Abstract

Will a carbon tax improve the welfare consequences of policies to promote electric vehicles? This paper examines when a complementarity could exist between carbon pricing and high electric vehicle adoption. We analyze electricity generation in recent years to show that in several regions, carbon pricing interacts with electric vehicle adoption. Under moderate carbon prices like those in effect today, additional electric vehicles will be more likely to be charged with coal-fired generation than without carbon pricing. We confirm this finding using a detailed dynamic model that includes the transportation and power sectors. At much higher carbon prices, the effect reverses.

Suggested Citation

  • Kenneth Gillingham & Marten Ovaere & Stephanie Weber, 2021. "Carbon Policy and the Emissions Implications of Electric Vehicles," CESifo Working Paper Series 8974, CESifo.
    • Handle: RePEc:ces:ceswps:_8974
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp8974.pdf
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    References listed on IDEAS

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    Cited by:

    1. Hoarau, Quentin & Meunier, Guy, 2023. "Coordination of sectoral climate policies and life cycle emissions," Resource and Energy Economics, Elsevier, vol. 72(C).
    2. Johannes Mauritzen, 2023. "With great power (prices) comes great tail pipe emissions? \\ A natural experiment of electricity prices and electric car adoption," Papers 2304.01709, arXiv.org.
    3. Ovaere, Marten & Proost, Stef, 2022. "Cost-effective reduction of fossil energy use in the European transport sector: An assessment of the Fit for 55 Package," Energy Policy, Elsevier, vol. 168(C).

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    More about this item

    Keywords

    electric vehicles; carbon pricing; interacting regulations; air pollution;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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