Are There Environmental Benefits from Driving Electric Vehicles? The Importance of Local Factors

We combine a theoretical discrete-choice model of vehicle purchases, an econometric analysis of electricity emissions, and the AP2 air pollution model to estimate the geographic variation in the environmental benefits from driving electric vehicles. The second-best electric vehicle purchase subsidy...

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Bibliographic Details
Published in:The American economic review Vol. 106; no. 12; pp. 3700 - 3729
Main Authors: Holland, Stephen P., Mansur, Erin T., Muller, Nicholas Z., Yates, Andrew J.
Format: Journal Article
Language:English
Published: Nashville American Economic Association 01.12.2016
American Economic Assoc
Subjects:
Air pollution
Alternative fuel vehicles
Automobiles
Benefits
Decision making models
Driving
Econometrics
Economics
Electric vehicles
Electricity
Electricity distribution
Emissions
Environmental aspects
Exports
Externality
Gasoline
Industrial plant emissions
Pollutants
Power plants
Studies
Subsidies
ISSN:0002-8282, 1944-7981
Online Access:Get full text
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Summary:We combine a theoretical discrete-choice model of vehicle purchases, an econometric analysis of electricity emissions, and the AP2 air pollution model to estimate the geographic variation in the environmental benefits from driving electric vehicles. The second-best electric vehicle purchase subsidy ranges from $2,785 in California to —$4,964 in North Dakota, with a mean of —$1,095. Ninety percent of local environmental externalities from driving electric vehicles in one state are exported to others, implying they may be subsidized locally, even when the environmental benefits are negative overall. Geographically differentiated subsidies can reduce deadweight loss, but only modestly.
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ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20150897