Working Paper: NBER ID: w28620
Authors: Kenneth Gillingham; Marten Ovaere; Stephanie M. Weber
Abstract: Will a carbon tax improve the welfare consequences of policies to promote electric vehicles? This paper examines when a complementarity could exist between carbon pricing and high electric vehicle adoption. We analyze electricity generation in recent years to show that in several regions, carbon pricing interacts with electric vehicle adoption. Under moderate carbon prices like those in effect today, additional electric vehicles will be more likely to be charged with coal-fired generation than without carbon pricing. We confirm this finding using a detailed dynamic model that includes the transportation and power sectors. At much higher carbon prices, the effect reverses.
Keywords: No keywords provided
JEL Codes: H23; Q48; Q53; Q54; Q58; R48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Carbon pricing (Q58) | Increased coal usage for charging EVs (L94) |
| Increased coal usage for charging EVs (L94) | Reduced emissions benefits of EV policies (H23) |
| Carbon pricing and EV adoption (Q52) | Increased coal usage for charging EVs (L94) |
| Carbon pricing (Q58) | Reordering electricity generation dispatch (L94) |
| Reordering electricity generation dispatch (L94) | Increased coal usage for charging EVs (L94) |
| Carbon pricing (Q58) | Reduced overall emissions reductions from EV policies (H23) |