Econonomics of Energy and Environmental Policy

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The End of Neutrality? Fuel Standards, Technology Neutrality, and Stimulating the EV Market

Abstract:
Widespread electrification of the transportation sector is a key component of most strategies for deep decarbonization of the U.S. economy. While the acceptance of EVs has grown dramatically over the last decade, much of this growth has been spurred by substantial support from public funds and other related policies. Major electrification on the time scales supported in many climate policy plans will require substantial investment spurred by policy. In this paper we discuss the policy options for expanding the EV market. Our particular focus is on the potential role that a Clean Fuel Standard (CFS) can play in supporting electrification. These standards, like California’s LCFS, are typically positioned as “technology neutral,” and the LCFS itself relies upon a dense set of calculations and assumptions to rate a wide variety of fuels based upon their life-cycle carbon intensity (CI). However, it is likely that for a CFS to support the kinds of investments on a magnitude likely necessary to reach electrification goals, it may have to be altered in such fundamental ways as to no longer really function as either technology-neutral or a purely fuels-based standard.
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Keywords: Decarbonization, EV Markets, Electrification, Clean Fuel Standard

DOI: 10.5547/2160-5890.13.1.jbus


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Published in Volume 13, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


 

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