Association Webinars: Policies for electrification of the car fleet in the short and long run



Abatement can be performed by measures that have an impact on present emissions, but no lasting effect, and by long-lived infrastructure investments. In this presentation, I discuss the optimal combination of short and long-lived options for reducing greenhouse gas (GHG) emissions. Electrification of the transport sector is used as an example. A transition from internal combustion engines vehicles (ICEVs) to electric vehicles (EVs) can be incentivized by both subsidies on purchases of EVs and increased density of fast chargers. Subsidizing the purchase of EVs only leads to emissions reductions in the next few years (static option), whereas investment in infrastructure also will reduce abatement costs in several years to come (dynamic option). We find that the present marginal abatement cost of the dynamic alternative exceeds the costs of static abatement in optimum, thus the dynamic option may be profitable even if it is more expensive. A higher expected abatement cost in later periods most likely makes it even more profitable to use the dynamic policy instrument. This framework is used for a numerical study on electrification of the transport sector in Norway. One conclusion from our study is that flexibility in the domestic target over time and the presence of an international permit market affect the combination of static and dynamic abatement. This stresses the importance of early and time consistent plans for international regulations of GHG emissions.

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Snorre Kverndokk (born 1962) has his Ph.D. in environmental economics from the University of Oslo in 1994. He is a senior research fellow at the Frisch Centre, a research foundation at the University of Oslo, and has also work experience from Department of Economics University of Oslo, Statistics Norway and Johns Hopkins University SAIS (Washington DC and Bologna, Italy), in addition to experience from governmental work and consulting. He is working on health-, energy- and environmental economics, and has previously been the director of CREE - Oslo Centre for Research on Environmentally friendly Energy, and HERO - Health Economics Program at the University of Oslo. He has also been involved in IPCC WG III since 1998 as a lead author and a review editor, most lately in the report published in April this year. He has had several research stays in England, Belgium and the USA, and has published numerous articles in international journals and received awards for his research. He is basically doing theoretical analyses and numerical modelling.

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Event Date: May 2, 2022

Event Time: 10:00 - 11:00 AM Eastern Time

Topic: Policies for electrification of the car fleet in the short and long run

Speaker: Snorre Kverndokk

Price: FREE

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