Transforming the global transportation system to consist of zero-emission vehicles is critical to reducing the impacts of climate change and improving local air quality. Federal and state policymakers in the U.S. have adopted various policy incentives to induce drivers to purchase advanced clean vehicles, aimed at reducing air pollution and greenhouse gas emissions. These federal and state incentives take many forms including: rebates, income tax credits, sales tax exemptions, fee exemptions, and non-monetary incentives such as access to carpool lanes.
Research from the Luskin Center for Innovation (LCI) has influenced the design and implementation of clean vehicle policies and programs. For example, the California Air Resources Board recently updated several of its policies, including the clean vehicle rebate, to increase the sales of electric vehicles and make them more accessible to low- and moderate-income Californians. These policy changes were supported by research from LCI and collaborators.
Already experiencing hotter temperatures and other climate change effects, California has an ambitious goal: achieve carbon neutrality by 2045. How to comprehensively reduce emissions from the state’s largest source of carbon emissions — the transportation sector comprised of a wide variety of vehicles — has always been a vexing question. To address this, the California Environmental Protection Agency has partnered with the University of California Institute of Transportation Studies on a landmark study. LCI is part of the team from UCLA, along with UC Davis, UC Berkeley and UC Irvine, that will identify strategies to achieve carbon neutrality in the transportation sector by 2045. This will include analyzing which strategies most effectively and equitably motivate drivers and businesses to transition to zero-emission vehicles.
Designing Light-Duty Vehicle Incentives for Low- and Moderate-Income Households (2019 report)
Authors: Gregory Pierce, Britta McOmber, and J.R. DeShazo
California will require a transformation of its light-duty vehicle fleet in order to meet statewide air quality and climate change goals. As a percentage of household earnings, lower-income populations face disproportionate costs to maintain and operate a vehicle. Optimally priced incentives and financing options can therefore promote household economic well-being while generating broader environmental benefits. To do so, financial incentives should be designed to accelerate the retirement and replacement of older, high-polluting vehicles and increase the adoption of clean vehicles. Yet several challenges persist in enabling low- and moderate-income households to adopt near-zero and zero-emission vehicles in California. This report, based on an LCI survey of 1,604 low- and moderate-income households, assesses current policies and informs future strategies intended to improve clean vehicle access and use by low- and moderate-income households in California. The results help identify effective policy approaches to improve access to, and adoption of, clean vehicles.
Evaluating a Smog Repair Program (2018 report)
Authors: Gregory Pierce and Rachel Connolly
This report examines the performance of the Tune In & Tune Up (TI&TU) smog repair program. TI&TU has operated in the San Joaquin Valley since 2005 and is one of the first transportation programs to include both environmental and equity considerations. The program has taken a community organizing approach to improving regional air quality by targeting for repair high-emitting light-duty vehicles in state-designated disadvantaged communities. The assessment is informing a new grassroots outreach program bringing clean vehicle, clean energy, and financial assistance programs to low-income households in Los Angeles County.
Assessing the Design and Implementation of a Clean Vehicle Incentive Program for Low-Income Californians (2017 report)
Authors: Gregory Pierce and J.R. DeShazo
The Enhanced Fleet Modernization Program (EFMP) Plus-Up pilot program is helping hundreds of low-income drivers get out of old, inefficient vehicles and into cleaner and more efficient cars. This LCI report describes how the EFMP Plus-Up pilot was implemented in the two air districts chosen for the pilot phase, the San Joaquin Valley Air Pollution Control District and South Coast Air Quality Management District, during the first year of program operation.
Improving Financial Incentives for Cleaner Vehicle Purchases: Strategically Linking with Vehicle Retirement Incentives (2016 article)
Author: J.R. DeShazo
This article evaluates the effectiveness of current clean vehicle incentive policies in the U.S. and makes recommendations for improvement. The associated study found that policymakers could facilitate more emission reductions by strategically linking vehicle purchase incentives with vehicle retirement incentives (e.g., cash for clunkers). This is because purchase incentives alone do not influence the type, timing, and pollution intensity of the retirement vehicle, a decision that is a critical determinant of emissions. Aligned with our recommendations, in 2015, the California Air Resources Board introduced the Enhanced Fleet Modernization Program (EFMP) Plus-Up pilot program (as approved by Assembly Bill 118) to better integrate vehicle retirement and replacement incentive programs in support of low- to moderate- income households. See the previous report “Assessing the Design and Implementation of a Clean Vehicle Program for Low-income Californians.”
Factors Affecting Plug-in Electric Vehicle Sales in California (2016 report containing results of several studies)
Authors: Tamara L. Sheldon, J.R. DeShazo, Richard T. Carson, and Samuel Krumholz
This LCI report, funded in part by the California Air Resources Board, provides an overview of the growth of California’s plug-in electric vehicle (PEV) market and describes key trends in the adoption of PEVs. It identifies the consumer, public policy and market factors, such as gasoline prices, correlated with the sales of new PEVs. The analysis is based on a statistical evaluation of monthly neighborhood PEV sales as a well as a survey of California’s new car buyers’ attitudes.
Increasing Clean Vehicle Rebates for Low- and Moderate-Income Drivers (2016 paper)
Authors: Tamara L. Sheldon, J.R. DeShazo, Richard T. Carson
More Californians can now afford clean vehicles, thanks in part to research involving the LCI. The researchers assessed the performance of alternative rebate designs for PEVs and compared these alternatives in terms of cost-effectiveness and equity. They found that providing progressive rebate levels based on consumer income levels would provide benefits within those performance criteria. These findings helped inform the adoption of California’s progressive rebate system in which low- and moderate-income drivers receive an additional $3,000 to $6,500 in financial incentives to purchase a clean vehicle. Additionally, income rules for most rebates limit eligibility to households with less than $500,000 in annual income.
Informing Nonmonetary Policy Incentives for Clean Vehicles (2016 paper)
Authors: Tamara L. Sheldon and J.R. DeShazo
Policymakers have sought to spur consumer adoption of clean vehicles by granting them single-occupancy access to carpool lanes (also called high-occupancy vehicle or HOV lanes). An LCI study offers the first causal evaluation of this policy that accommodates geographic variability in the magnitude of its treatment effect. The study finds that roughly one quarter of California PEV purchases during 2010-2013 resulted from HOV lane access policy. The research is shaping the current legislative conversation about how to best extend HOV access in the future.