In study based on a dynamic technology adoption model, a pair of researchers at Simon Fraser University (British Columbia) have concluded that even if a zero-emission vehicle (ZEV) manadate drives significant ZEV adoption in the area in which the mandate is implemented, there is no “free-riding” ZEV adoption in neighboring areas. Regions seeking low-carbon transportation likely will need to implement their own stringent policies, the researchers suggest. The study by Maxwell Sykes and Jonn Axsen is published in the journal Energy Policy.
Sykes and Axsen investigated the regional spillover effects and GHG impacts of the ZEV mandate in place in ten US states. They focused on their own small region (British Columbia, covering 0.7% of the market) as potentially free-riding off of ZEV States’ policy (covering 23% of the market).
They found that even with the ZEV mandate driving very high sales in ZEV States in the US, British Columbia cannot achieve significant ZEV adoption without also implementing its own ZEV mandate.
Even when the ten US ZEV States impose a mandate that requires ZEVs to make up 100% of new vehicle sales by 2050, the resulting spillovers are not enough to stimulate high levels of ZEV adoption (and associated GHG reductions) in British Columbia.
Further, for British Columbia to meet its 2050 GHG targets, the province may need a ZEV mandate in addition to complementary climate policies such as fuel economy standards and low carbon fuel standards to push ZEVs to account for 40–93% of new vehicle sales in 2050. In short, regions seeking low-carbon transportation likely need to implement their own stringent policies.
Our focus on a ZEV mandate does not mean to imply that this is the only policy tool that is available to support a transition to ZEVs, nor that it is necessarily the most effective ZEV-supportive policy. Melton et al. (2017) provide a PEV policy evaluation framework that suggests that a variety of combinations of stringent, long-duration policies can potentially lead to substantial long-term ZEV adoption. For example, while California’s ZEV mandate appears to play an important role in its leadership in North America’s ZEV sales, Norway leads the world in ZEV new market share due to its combination of very high gasoline taxes, very high conventional vehicle purchase taxes that do not apply to PEVs, and very generous non-financial incentives. Furthermore, California’s ZEV mandate is supported by multiple demand-focused policies and programs as part of California’s ZEV Program.—Sykes and Axsen (2017)
… Based on our results, we suspect that regions will need their own ZEV-focused policies to achieve a deep 2050 GHG reduction target. This is not conclusive, however. It is possible that sufficient ZEV adoption in a large enough proportion of other regions (nearby or globally—or say, every single other region in North America or globally) may generate spillovers sufficient for a region like British Columbia to achieve the ZEV adoption necessary to achieve its 2050 GHG target through free-riding. However, given that even strong CAFE and LCFS policies are unlikely to sufficiently reduce GHG emissions, as well as the limited impact regional spillovers have on ZEV adoption in our most aggressive policy scenarios, we suspect that regions committed to achieving a deep GHG reduction target will need their own strong ZEV-focused policy.
Regions may thus want to follow California's approach of implementing a combination of policies that alleviate both local barriers (e.g. pur- chase incentives and increasing refueling infrastructure) and global barriers (e.g. stimulating automaker innovation to increase the availability and variety of ZEVs, and to achieve cost breakthroughs in their components).—Sykes and Axsen (2017)
Maxwell Sykes, Jonn Axsen (2017) “No free ride to zero-emissions: Simulating a region’s need to implement its own zero-emissions vehicle (ZEV) mandate to achieve 2050 GHG targets,” Energy Policy, Volume 110, Pages 447-460 doi: 10.1016/j.enpol.2017.08.031