Conference Agenda

Electrification offers enormous potential for reductions of emissions of greenhouse gases and air pollutants from road transport and for focusing climate change mitigation efforts on stationary sources. Sales of electric vehicles (EVs) have been exponentially growing in the past years, with EVs reaching a 14% global market share in 2022.1 This growth has been spurred by public policy support, including increasingly stricter CO2 emissions standards, zero-emission vehicle mandates, and direct subsidies and incentives for EVs and charging infrastructure. While governments worldwide keep spending tens of billions EUR per year on subsidies and incentives for the adoption of new EVs, a number of questions emerge on the effects of this support:

1. To what extent have EV adoption subsidies been reaped by free-riders, who would have chosen electric vehicles even in the absence of such support?

2. What are the distributional effects of EV adoption subsidies? Given the high acquisition costs of electric vehicles, it is becoming increasingly clear that these subsidies are mostly received by high-income households. This limits the resources available to promote cost- effective investments in energy efficiency by lower-income households.

3. To what extent do EV adoption subsidies stimulate an increase in household car ownership and use, and thus a further transition away from active travel and public transport?

4. To what extent can spatially targeted EV charging station subsidies improve the efficiency of the EV charging market? The presence of entry complementarities across charging location, depending on how much firms internalize positive spillovers from entry, may warrant subsidy policies with location targeting or spatial restrictions as opposed to widely used uniform subsidies.

This Policy Session aims to provide answers to these questions, drawing on findings from the empirical and theoretical literature and from experiences with EV subsidies in several countries. The session will also discuss the dependence of the effects of EV subsidies on contextual factors – such as geomorphology, land use and public transport availability – as well as on other instruments of the policy mix implemented to reduce vehicle emissions, including excise duties on motor fuels and car taxes. Finally, the session will explore possible pathways for the phase out of subsidies for the adoption of new EVs and present alternative policy instruments facilitating the penetration of EVs in the used car market. It will also identify important knowledge gaps in the literature, and thus present opportunities for environmental and resource economists to do original and socially relevant research on policy support for the electrification of road transport.

Speakers:

Matteo Craglia, International Transport Forum, OECD, France

Alexandros Dimitropoulos, Netherlands Environmental Assessment Agency, The Netherlands

Elisabeth Isaksen, Ragnar Frisch Centre for Economic Research, Norway

Mathias Reynaert, Toulouse School of Economics, France

Katalin Springel, HEC Montréal, Canada

Kurt van Dender,Centre for Tax Policy and Administration, OECD, France