It’s an exciting time for transportation decarbonization. Consumers, manufacturers, and governments are coalescing around clean vehicles. Rapid transportation electrification’s potential is real. Still, the market will not transform fast enough on its own. Smart policies are needed for the transition to happen at the speed needed to address climate change.
The transportation sector is responsible for about 15 percent of total global greenhouse gas (GHG) emissions or 25 percent of carbon dioxide emissions from energy, growing at a faster rate than any other energy end-use for decades. Vehicles are also a major source of air pollution from fossil fuel-combustion, causing 10 million deaths per year globally disproportionately impacting low-income and marginalized communities.
Energy Innovation’s Transportation Program work mainly targets motor vehicle emissions, accounting for about 75 percent of all transport GHG emissions, an attractive policy target due to battery innovation. Battery prices have fallen 89 percent over the last decade, spurring remarkable market gains, with global electric vehicle (EV) sales doubling in 2021 to nearly 7 million globally. Many EVs are already cheaper to own than fossil-powered vehicles, and research shows transitioning to 100 percent all-electric vehicle sales by 2035 is technically feasible and highly beneficial.
California, the United Kingdom, and the European Union have all established internal-combustion engine phase-out plans, along with several major automakers, and 30 countries signed a historic pledge at COP26 to make zero-emission vehicles (ZEVs) the new normal by 2040. EV sales share in 19 countries, including the U.S., have exceeded 5 percent, the level at which the vehicle market typically begins to transform rapidly to electric.
We help transportation policymakers identify and calibrate policies needed to remain below the 1.5 degree Celsius warming threshold. Our goal is to achieve 100 percent clean vehicle sales as quickly as possible, no later than 2035 and earlier in leading markets, prioritizing policies governing the world’s largest new vehicle markets.
Our 2035 2.0 policy report identifies the suite of policies needed to transform the U.S. transportation sector, such as ZEV sales standards or stringent GHG emissions tailpipe standards, which would steadily increase EV deployment over time. Other policies needed to optimize transportation decarbonization include targeted vehicle incentives, charging infrastructure investment, and equity-focused programs, all of which must adapt as the market matures. Sustainable urban design—expanding quality public transportation, and promoting walkable, bikeable communities —is also fundamental, especially where the share of the urban population is growing, such as China.
We tout the advantages of learning curves, which explain how greater technology deployment leads to greater economies of scale and lower costs for consumers. Understanding learning curves is essential to fully explain the economic opportunities leadership in transportation decarbonization presents. Yet, policy analysis for decision-makers often fails to reflect historical innovation, much less account for predictable future innovation. By illuminating economic upsides, we build support for stronger policies.