New research from Energy Innovation and the Environmental Defense Fund calculates that California’s Advanced Clean Trucks rule proposal—the first of its kind in the US—will generate between $7-$12 billion in overall economic savings by 2040 and would also help create a market for up to 500,000 new electric trucks across the state for EV truck makers such as Tesla and Nikola.
The new rule, expected to be approved by the California Air Resources Board on June 25, would require 60% of new medium- and heavy-duty trucks sold in the state to be zero emission vehicles by 2035.
The analysis evaluates the rule using a customized version of the California Energy Policy Simulator (EPS), an open-source, quantitative model for policy analysis.
The authors first checked the conclusions reached in CARB’s regulatory analysis for the upcoming rule, modifying key variables in the California EPS, drawing on the evidence CARB has collected and finding that the effects of the proposed rule are similar to those found in CARB’s analysis.
Local and global air pollution benefits are almost indistinguishable. The California EPS finds the proposed rule saves $7.3 billion through 2040 compared to the $6.0 billion CARB estimates. Variations in how the models treat vehicle cost largely explain this difference.
This research also investigates the effects of a lower battery cost assumption than that underlying CARB’s analysis. Battery costs have plunged 87 percent since 2010, and forecasts point to continuing cost reductions. Battery cost explains most of the cost difference between electric and internal combustion engine vehicles, so it is an important input assumption. CARB’s modeling projects that batteries for medium- and heavy-duty trucks will cost more than batteries for passenger vehicles. We identify research indicating that future truck battery prices are unlikely to be as high as expected in CARB’s analysis. When the proposed rule is evaluated using lower battery cost assumptions, the California EPS finds total savings increase by $5 billion more than $12 billion through 2040.—“Clean Trucks, Big Bucks”
The study also calculated a reduction in CO2e emissions of more than 17 million metric tons, creating nearly $9 billion in public health benefits, including nearly 1,000 avoided premature deaths through 2040. These environmental benefits will be concentrated in urban and disadvantaged communities, ensuring economic growth comes with environmental justice.