Picking winners: assessing the costs of technology-specific climate policy for U.S. passenger vehicles

Date created
2013-05-27
Authors/Contributors
Abstract
Policymakers implementing climate policies that aim to direct technological change must decide the extent to which such policies will be technology-neutral or technology-specific. There is a debate over the effect that such alternative designs will have on a policy’s expected cost-effectiveness. Researchers have investigated this question in top-down models that focus on the early phases of technological change (R&D), but no one has yet compared technology-neutral and technology-specific policy designs for the later stages of technological change (commercialization and diffusion), in a model that includes explicit energy technologies. I model these policy designs using a case study of the US passenger vehicle sector in a hybrid simulation model that is not only technology explicit, but behaviourally-realistic and that possesses some degree of macroeconomic feedbacks. I find that technology-specific vehicle mandates results in lower policy cost-effectiveness than a carbon tax on vehicle fuel because the vehicle mandate has a higher risk of policymakers “picking the wrong winner.” However, I find as well that a technology-specific electric vehicle mandate is able to meet a key adoption threshold for getting low-cost emission reductions from PHEVs. Key limitations of my model include: consumers have zero foresight, exogenous assumptions for fuel supply and cost, and assumptions that seem to implicitly favour the adoption of plug-in hybrid electric vehicles over biofuels. The implications of my results are that further research should investigate ways in which technology-neutral and technology-specific policies can be combined to increase expected policy cost-effectiveness and minimize the risk of “picking the wrong winner.”
Document
Identifier
etd7969
Copyright statement
Copyright is held by the author.
Permissions
The author granted permission for the file to be printed and for the text to be copied and pasted.
Scholarly level
Language
Attachment Size
ETD7969_JF.pdf 2.86 MB