Countries need to get the policy mix right to encourage the switch to electric vehicles
Transport is missing the emissions reduction bus.
Indeed, greenhouse gas emissions from transport are growing, having increased nearly 56 percent since 1990 at an average annual rate of 1.7 percent. This represents the highest emissions growth of any sector of the economy.
Around 74.5 percent of all transport emissions are generated from road vehicles including cars, vans, buses and trucks.
With the planet needing to rapidly decarbonise to reach net zero targets, electric vehicles are seen as a key part of the transport solution.
But the problem is how to accelerate EV uptake and implement complementary strategies to encourage people to shift to greener travel options.
Although the global EV market has had a rapid growth in sales over the past few years, exceeding 10 million vehicles in 2022 or around 14 percent of all new cars sold, adoption rates are not consistent across the world.
But much can be learnt from government policies that have played a major role in removing barriers to adoption in the world’s top three EV markets — China, Europe and the US — which collectively accounted for around 90 percent of all EV sales in 2022.
Governments that provided people with financial incentives to buy EVs have been able to achieve a substantial shift in consumer sentiment towards greener car purchases.
These incentives were designed to reduce the purchase price gap between electric and conventional vehicles and have mainly taken the form of vehicle purchase subsidies or rebates or registration tax discounts.
The purchase cost of an EV varies widely in different parts of the world.
EV drivers in Norway pay lower road tolls, gain access to bus lanes and benefit from cheaper and, in the past, free ferry crossings and public parking. People living in apartments have ‘charging rights‘ safeguarded by government legislation.
This all helped to increase EV sales to 50 percent market share in 2020, and 79 percent by 2022. No other nation comes close.
France provides targeted incentives for people on lower incomes to purchase EVs.
Individuals with annual income up to €14,089 are eligible to receive a bonus of up to €7,000 on the purchase of a new EV, while those above this threshold receive a maximum subsidy of €5,000.
The subsidy is also capped at a maximum rate not exceeding 27 percent of the vehicle’s gross purchase price.
For incentive programmes to be effective, they should be accompanied by higher taxes on polluting vehicles to encourage more drivers to make the switch to electric.
Ireland first introduced an emissions-based car taxation policy in 2008. An analysis of its impacts found it produced a cumulative carbon dioxide savings of 1.6 million tonnes from 2008 to 2018.
A similar study that evaluated Norway’s vehicle emissions-based taxes found them to be powerful policies that also delivered large reductions in air pollution.
Other supporting policies include the so-called feebate system.
Feebates involve placing a levy on purchases of vehicles with high emissions and using the revenues to provide rebates for purchases of vehicles with zero or low emissions to offset their higher prices. Examples include France’s Bonus-Malus and New Zealand’s Clean Car Discount.
If developed carefully, these systems can be a cost-neutral method of discouraging purchases of high-emission vehicles and encouraging purchases of EVs.
Any credible EV strategy also could consider EV mandates and the phase out of internal combustion engine vehicles.
More than 35 countries have already announced plans for either full electrified sales, full electrified stocks or full phase-out of internal combustion engine vehicles over the next 10 to 30 years.
The EU had planned to ban the sale of internal combustion engine cars from 2035.
In February 2023, the European Parliament approved the ban, which was later revised to allow some combustion engines running on e-fuels to be sold beyond 2035.
Still, this remains one of the world’s strongest measures to phase out fossil fuel vehicles.
There have also been measures to phase out subsidies for fossil fuel vehicles.
Examples include the fuel tax credit scheme in Australia. This scheme has been criticised for subsidising the consumption of fossil fuels, particularly in the mining industry, and for providing direct benefits for high-polluting heavy diesel vehicles over 4.5 tonnes.
Countries with high EV adoption rates have also backed up their transport decarbonisation strategies with robust fuel efficiency standards.
These standards aim to limit vehicle emissions by mandating a maximum annual average level of carbon emissions across a car company’s overall new car sales.
Penalties are imposed on car manufacturers if these maximum levels are exceeded, which encourages them to offer low and zero emissions vehicles in markets that enforce these standards.
Properly devised standards also reduce the cap over time until all new vehicles sold become zero emissions.
Strong fuel efficiency standards already cover more than 85 percent of the international market.
In recent times, some countries have proposed to tighten these standards further. Examples include plans by the US to introduce strict new emissions limits that would require two-thirds of vehicles sold in the US to be electric by 2032.
The proposal, if ratified, will represent the most aggressive vehicle emissions reduction plan in the US and will deliver an average 13 percent annual pollution cut.
Given the current low EV uptake rates in Australia (around 8.4 percent of new car sales compared to around 20 percent globally), the standards need to be ambitious with clear targets for EV sales and timelines for phasing out internal combustion engine vehicles.
The International Council on Clean Transportation is recommending policies to accelerate the deployment of EV charging infrastructure, including binding installation targets aligned with the expected growth in EVs and incentives to address charging gaps.
It estimates more than 100 million chargers will be needed across its members’ jurisdictions by 2030. But as of mid-2022, only 13 percent of these public chargers were in place.
Having readily accessible chargers helps reduce concerns about range anxiety, which in turn can help improve EV uptake rates. It also reduces the requirement for EVs to have larger batteries which makes them more affordable.
The planet cannot survive humanity’s current transport habits.
Putting in place strategies to accelerate the transition to cleaner transport would be a giant step towards meeting global commitments to achieve net zero emissions by 2050.
Ambitious EV policies would reduce emissions and improve air quality.
Although EVs are a crucial piece of decarbonisation efforts, they are not the complete solution to cutting transport emissions.
Strategies to change travel behaviour such as reducing the number of cars on the roads, increasing the use of ‘tiny vehicles‘ such as e-bikes and e-scooters, and improving walkability and access to public transport, could all help.
If well planned and implemented, these policies and strategies will collectively achieve transport emission reduction targets in the world’s cities.
Without a comprehensive set of consistent policies, particularly in nations embarking on their decarbonisation efforts, dependence on fossil fuels will deepen and reaching emissions reduction goals will become harder.
Professor Hussein Dia is professor of future urban mobility at Swinburne University of Technology. His current work focuses on decarbonising urban transport and harnessing digital innovations to unlock opportunities for sustainable mobility futures. He is ranked in the top 2 percent of most cited scientists in the field of logistics and transportation by Stanford University Global Scientist Citation Rankings. He is a Fellow of Engineers Australia, a Fellow of the Institute of Transportation Engineers, and a Fellow of American Society of Civil Engineers.
Professor Dia receives research funding in areas related to the topic of this article from the Australian Research Council, the iMOVE Cooperative Research Centre, Transport for New South Wales, Queensland Department of Transport and Main Roads, Victorian Department of Transport and Planning, Department of Infrastructure, Transport, Regional Development, Communications and the Arts, and Beam Mobility Holdings.
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