Kelly Sims Gallagher

Giving Green to Get Green: Incentives and Consumer Adoption of Hybrid Vehicle Technology

Federal, state, and local governments use a variety of incentives to induce consumer adoption of hybrid-electric vehicles. We study the relative efficacy of state sales tax waivers, income tax credits, and non-tax incentives and find that the type of tax incentive offered is as important as the generosity of the incentive. Conditional on value, sales tax waivers are associated with more than a ten-fold increase in hybrid sales relative to income tax credits. In addition, we examine how adoption varies with fuel prices. Rising gasoline prices are associated with greater hybrid vehicle sales, but this effect operates almost entirely through high fuel-economy vehicles. By comparing consumer response to sales tax waivers and estimated future fuel savings, we estimate an implicit discount rate of 14.6% on future fuel savings.

Policies for the Energy Technology Innovation System (ETIS)

The development and introduction of heat pumps provides an interesting illustration of policy influence and effectiveness in relation to energy technology innovation. Heat pumps have been supported by several countries since the 1970s as a strategy to improve energy efficiency, support energy security, reduce environmental degradation, and combat climate change. Sweden and Switzerland have been essential to the development and commercialization of heat pumps in Europe. In both countries, numerous policy incentives have lined the path of technology and market development. Early policy initiatives were poorly coordinated but supported technology development, entrepreneurial experimentation, knowledge development, and the involvement of important actors in networks and organisations. The market collapse in the mid 1980s could have resulted in a total failure ‐ but did not. The research programmes continued in the 1980s, and a new set of stakeholders formed ‐ both publicly and privately funded researchers, authorities, and institutions ‐ and provided an important platform for further development. In the 1990s and 2000s, Sweden and Switzerland introduced more coordinated and strategic policy incentives for the development of heat pumps. The approaches were flexible and adjusted over time. The policy interventions in both countries supported learning, successful development and diffusion processes, and cost reductions. This assessment of innovation and diffusion policies for heat pump systems can be used to generalise some insights for energy technology innovation policy.

Why & How Governments Support Renewable Energy

Many countries have adopted comprehensive policy frameworks to support renewable energy, but the United States has not adopted any consistent and stable policies at the national level to foster the use of renewable energy. This essay explores why some nations (Germany, China, and Denmark) and certain U.S. states (Colorado, Texas, and Ohio) have developed robust policies for the deployment of renewable energy. My aim is not to evaluate the specific policy mechanisms that countries and states have chosen, but rather to shed light on the underlying societal factors that contributed to each governments decision to enact the policies in the first place. I explore four factors that could influence a governments decision to adopt favorable policies for renewable energy: (1) economic motives; (2) a high endowment of renewable resources and/or a low endowment of nonrenewable sources; (3) the political system; and (4) cultural factors and attitudes.

In-use vehicle emissions in China: Beijing study

Chinas economic boom in the last three decades has spurred increasing demand for transportation services and personal mobility. Consequently, vehicle population has grown rapidly since the early 1990s, especially in megacities such as Beijing, Guangzhou, and Tianjin. As a result, mobile sources have become more conspicuous contributors to urban air pollution in Chinese cities. Tianjin was our first focus city, and the study there took us about two years to complete. Building upon the experience and partnership generated through the Tianjin study, the research team carried out the Beijing study from fall 2007–fall 2008. Beijing was chosen to be our second focus city for several reasons: it has the largest local fleet and the highest percentage of the population owning vehicles among all Chinese cities, and it has suffered from severe air pollution, partially due to the ever-growing population of on-road vehicles.

Tackling U.S. energy challenges and opportunities: preliminary policy recommendations for enhancing energy innovation in the United States

The report offers preliminary recommendations for near-term actions to strengthen the U.S. effort to develop and deploy advanced energy technologies. The report comes as the Obama Administration and the 111th U.S. Congress face enormous challenges and opportunities in tackling the pressing security, economic, and environmental problems posed by the energy sector. Improving the technologies of energy supply and end-use is a prerequisite for surmounting these challenges in a timely and cost-effective way, and this report elaborates on how policy can support develop of these important energy technologies.

Experience with Carbon Taxes and Greenhouse Gas Emissions Trading Systems

Carbon taxes and emissions trading systems (ETSs) to limit emissions of greenhouse gases (GHGs) are becoming increasingly common. At the end of 2015, 17 GHG ETSs were operational in 55 jurisdictions while 18 jurisdictions collected a carbon tax. Empirical evidence on the performance of carbon taxes and GHG ETSs is sparse. This paper assesses the performance of those taxes and ETSs as implemented with respect to: environmental effectiveness (reduction of actual emissions), cost-effectiveness (marginal abatement cost), economic efficiency, public finance and administrative issues. Actual emissions fell for seven of 13 carbon taxes for which data are available and for at least six of ten ETSs. Taxes and ETSs in other jurisdictions may have reduced emissions from what they would have been but not enough to lower actual emissions. In at least 3 tax jurisdictions, the emission reductions appear to be due to complementary policies. Data to determine the contribution of complementary policies to the reduction of emissions covered by ETSs are not available. On average the marginal cost is substantially lower for ETSs than carbon taxes. The emissions reductions achieved by existing carbon taxes are small in most jurisdictions due to the low tax rates, the modest changes in tax rates and inelastic demands for fossil fuels. Existing taxes yield virtually no insight into the relationship between changes to the tax rate and changes to emissions. All of the ETSs have accumulated banks of surplus allowances and most have implemented measures to reduce these banks.

Carbon pricing in practice: a review of existing emissions trading systems

ABSTRACT This article analyses the implementation of emissions trading systems (ETSs) in eight jurisdictions: the EU, Switzerland, the Regional Greenhouse Gas Initiative (RGGI) and California in the US, Québec in Canada, New Zealand, the Republic of Korea and pilot schemes in China. The article clarifies what is working, what isn’t and why, when it comes to the practice of implementing an ETS. The eight ETSs are evaluated against five main criteria: environmental effectiveness, economic efficiency, market management, revenue management and stakeholder engagement. Within each of these categories, ETS attributes − including abatement cost, stringency of the cap, improved allocation practices over time and the trajectory of price stability − are assessed for each system. Institutional learning, administrative prudence, appropriate carbon revenue management and stakeholder engagement are identified as key ingredients for successful ETS regimes. Recent implementation of ETSs in regions including California, Québec and South Korea indicates significant institutional learning from prior systems, especially the EU ETS, with these regions implementing more robust administrative and regulatory structures suitable for handling unique national and sub-national opportunities and constraints. The analysis also shows that there is potential for a ‘double dividend’ in emissions reductions even with a modest carbon price, provided the cap tightens over time and a portion of the auctioned revenues are reinvested in other emissions-reduction activities. Knowledge gaps exist in understanding the interaction of pricing instruments with other climate policy instruments and how governments manage these policies to achieve optimum emissions reductions with lower administrative costs. Key policy insights Countries are learning from each other on ETS implementation. Administrative and regulatory structures of ETS jurisdictions appear to evolve and become more robust in every ETS analysed. A ‘double dividend’ for emissions reductions may also exist in cases where mitigation occurs as a result of the ETS policy and when auction revenues are reinvested in other emissions-reduction activities.

Transportation-Specific Challenges for Climate Policy

This chapter describes how oil security and global climate change are two looming transportation policy challenges. While remarkable advances have been made in reducing emissions of tailpipe pollutants, which are known to cause adverse public health effects, much less progress has been made on reducing overall oil consumption and emissions of greenhouse gases (GHG). The United States (U.S.) highway fuel consumption and almost all petroleum consumption have increased 62 percent between 1973 and 2005. Overall, the U.S. transportation sector accounts for 33 percent of the nation’s carbon dioxide (CO(2)) emissions, with over half of that coming from cars and trucks and this chapter reviews the current and future policy changes required to reduce these pollutants.

Fuel Prices and Consumer Preferences for Vehicles: Energy Technology Innovation Policy

The purpose of this paper is to examine the relationship between fuel prices and consumer preferences for passenger motor vehicles in the U.S. automobile market. The paper examines the stated preferences of new vehicle owners from December 2001 to January 2008 to explore possible indications of changes in consumer preferences. Annual survey data were used. During the observation period, gasoline prices fluctuated significantly and rose to more than twice their lowest level. The importance of acquiring a vehicle with good fuel economy was analyzed, and the results of the statistical analysis are presented. The paper presents additional evidence that more consumers would state that fuel economy becomes a more important factor in their purchasing decisions as gasoline prices rise. The evidence also supports the suggestion that the financial impact of fuel economy will matter first to lower-income buyers as gasoline prices rise.

Collective Action: Adaptation, Mitigation, Innovation: The Case of the Chinese PV Industry

At the very beginning of this year, news that heavy pollution containing black carbon from Asia was drifting all the way to the Pacific coast of the United States made headlines in the news media. The pollution cloud was attributed to Chinese manufacturing. Old-fashioned air pollution, acid rain, and extreme weather events from climate change are just three of the consequences of intensive fossil fuel burning.