Emissions Standards and Electric Vehicle Targets for Passenger Vehicles
This working paper analyzes welfare and distributional effects of nested US policies affecting plug-in vehicles: state-level zero-emission vehicle standards and national fuel economy and greenhouse gas standards for passenger vehicles.
Abstract
This paper analyzes welfare and distributional effects of nested US policies affecting plug-in vehicles: state-level zero-emission vehicle (ZEV) standards and national fuel economy and greenhouse gas (GHG) standards for passenger vehicles. I use a computational model of the passenger vehicle market that endogenizes manufacturer choices of prices, technology, fuel economy, and horsepower and incorporates the timing of regulatory decisions and pre-existing distortions caused by market power and consumer undervaluation of fuel economy. Ignoring the influence of the 2022 ZEV standards on fuel economy and GHG standards, ZEV standards would appear to impose high costs without reducing emissions. However, accounting for such influence reveals that ZEV standards reduced GHG emissions at modest costs.
