Evaluating Revenue Neutral Incentive Systems for Zero-emission Light-Duty Vehicles in the United States, with Attention to Equity Impacts

This white paper will evaluate revenue-neutral mechanisms to encourage zero emission vehicle (ZEV) sales in the U.S., with no net cost to taxpayers. The researchers will undertake this analysis for light-duty vehicles (LDVs) across the U.S. market. It will also be among the first to consider ZEV-only future scenarios and equity aspects of different feebate structures. The researchers will also review various feebate designs globally, their effectiveness and potential applications to passenger cars and light-duty trucks, and lessons for the US to roll out an effective transportation transition, focusing on battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and fuel cell electric vehicles (FCEVs) (together comprising ZEVs). It will explore different incentive structures and answer key questions including how they may impact different income and demographic groups, and to what extent the different structures appear likely to promote sales of ZEVs.  How a feebate policy interacts with ZEV sales requirements for LDVs will be explored, as well as their interaction with other policies like the Low Carbon Fuel Standard (LCFS) in California. The research team will analyze whether feebates can add significant additional incentives beyond those policies without creating burdensome new costs on society or particular groups. In addition to implications at a federal level, the paper will also have a sub-national policy focus with outreach to stakeholders in California and engage with other “177” states as well, to understand the implications for such a policy at a state level.

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