The environmental and economic impact of policy instruments on the electric vehicle market (EVPARK).

• Applicant: Professor Cristian Huse, Ph.D.
• Subject Area: Economic Policy, Applied Economics ; Economic Theory
• Term: since 2023
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 516638728

The objectives of the project are as follows: • Evaluate the effectiveness of alternative policy instruments in incentivizing the adoption of EVs (electric vehicles). Understanding the determinants of technology adoption (EVs in particular) is crucial for policy design. Accordingly, we will construct a panel data set at the country-year level to quantify the impact of alternative policy instruments using econometric methods. In addition to comparing the effectiveness of policy instruments, the paper will also contribute by assessing the role of car production facilities in incentivizing the adoption of EVs. We will also aim to construct an indicator of local policies to incentivize the adoption of EVs; • Assess the role of local policies in the adoption of EVs, in particular BEVs (battery electric vehicles), with a focus on parking. Quantifying the effect of local policy instruments, such as parking, is crucial because despite they have been less studied despite their relevance in monetary terms (for reference, lifetime parking costs in Oslo, Norway, are comparable to the price of a new vehicle). Local policies are also important from the perspective of local authorities; on the one hand, municipalities rely on local policies such as parking to obtain tax revenues. On the other hand, making EVs less attractive than ICEVs (internal combustion engine vehicles) creates incentives for the increased use of the latter, which is likely to have adverse environmental effects in what concerns local air pollution levels. With the estimates of the model, we will be able to quantify the effects of EFP (end of free parking) on new vehicle registrations. Here, one interesting dimension to focus on is the comparison between the sales (or shares) of EVs and ICEs before and after EFP. In addition to quantifying the “market effects” (sales, market shares at the brand, model, and energy source level) of the policy, we will compare the effect of local policies to those of more widely studied policy instruments such as fuel taxes. Moreover, we will aim to quantify the (theoretical/potential) “environmental effects” of the policy by quantifying the effects of the policy on the (test-based) CO2 emissions and local pollutants rates of newly-registered vehicles. Finally, we aim to focus the distributional effects of EFP in both its vertical (income) and horizontal (utilization) dimensions. • Assess the effect of a change in parking policy on local air pollution. This amounts to directly quantify the environmental effects of the EFP policy on local pollutants in Norway. To do so, we will construct a panel of air pollution readings for different pollutants based on the monitoring stations distributed over Norway. After controlling for station and locality characteristics, in addition to weather conditions at each monitoring station, we will be able to quantify the treatment effects of the EFP policy on air pollution levels.

• DFG Programme: Research Grants
• International Connection: Denmark
• Cooperation Partner: Shiyu Yan, Ph.D.