This content is not included in
your SAE MOBILUS subscription, or you are not logged in.
Cost Effectiveness of the California Low Emission Vehicle Standards
Annotation ability available
Sector:
Language:
English
Abstract
The “Low Emission Vehicle” (LEV) standards adopted by the California Air Resources Board (CARB) require that large-volume manufacturers begin selling electric vehicles in 1998 and that over 99% control of hydrocarbon exhaust emissions be achieved on most other vehicles. When the LEV standards were adopted, the CARB staff estimated that prices for gasoline-fueled cars would increase by $70-170 per vehicle. The price premium for electric cars was estimated to be $1,350. However, a review of detailed information supplied by automobile manufacturers and vendors of emissions control equipment indicates that the actual cost of meeting the LEV standards will be much higher.
Based on the least expensive systems currently under development by vehicle manufacturers, and assuming costs decline by 5% per year, the average price associated with meeting the LEV standards will be about $1,000 higher than vehicles certified to the 1993 federal standards, not including the effect of the 10% electric vehicle mandate. If the public will not pay the estimated $21,000 premium for electric vehicles, the price of the average California vehicle could increase by an additional $2,100 to subsidize the sales of electric vehicles. The increase in average vehicle prices necessary to offset the price premium for electric vehicles is projected to suppress new vehicle sales, causing hydrocarbon emissions to be higher than without the electric vehicle mandate. If other states require California-certified cars, price increases would be somewhat lower due to economies of scale. Assuming nationwide adoption of the LEV standards, the price increase over 1993 models for gasoline-fueled vehicles is projected to be $775 and the price premium for electric vehicles is estimated at $12,600. With a 10% electric vehicle sales mandate, the price of the average new vehicle would be expected to increase by approximately $2,000.
Except for the electric vehicle mandate, the LEV standards might be economically justified in California because of that state's more serious air pollution problems. Outside of California, the LEV standards are projected to result in a cost to society that exceeds the economic benefits by more than a factor of ten.
Recommended Content
Topic
Citation
Austin, T. and Lyons, J., "Cost Effectiveness of the California Low Emission Vehicle Standards," SAE Technical Paper 940471, 1994, https://doi.org/10.4271/940471.Also In
References
- Austin T.C. et al “The Cost-Effectiveness of Further Regulating Mobile Source Emissions,” Sierra Research, Inc. Report No. SR94-02-03 February 1994
- Webster's Third New International Dictionary G. & C. Merriam Company 1981
- “California Clean Air Act Cost-Effectiveness Guidance,” Office of Air Quality Planning and Liaison, California Air Resources Board September 1990
- “The Clean Air Act Section 183(d) Guidance on Cost-Effectiveness,” Office of Air and Radiation, U.S. Environmental Protection Agency November 1991
- Lindgren L.H. “Cost Estimates for Emission Control Related Component/System and Cost Methodology Description,” Rath & Strong, Inc. EPA report no. EPA-460/3-3-78-002 March 1978
- “Emissions Inventory 1991,” Technical Support Division, California Air Resources Board January 1994
- “1992 Air Quality Data Continue to Show Improvement,” CVS News Sierra Research, Inc. October 1993
- “1993 Incremental Cost Estimate of Low Emission Vehicles Compared to Tier 1 Vehicles,” California Air Resources Board 1993
- Kubsh J. Grace W.R. North American Motor Vehicle Emissions Control Conference December 6 1993
- “Summary of United States Motor Vehicle Inspection and Maintenance (I/M) Programs,” Sierra Research, Inc. June 1993
- “Evaluation of the California Smog Check Program and Recommendations for Program Improvements -Fourth Report to the Legislature,” California I/M Review Committee February 16 1993
- “Evaluation of the California Smog Check Program and Recommendations for Program Improvements -Fourth Report to the Legislature,” California I/M Review Committee February 16 1993
- “Draft Regulatory Impact Analysis: Proposed Refueling Emission Regulations for Gasoline-Fueled Motor Vehicles - Volume 1, Analysis of Gasoline Marketing Regulatory Strategies,” U.S. Environmental Protection Agency July 1987
- “Reducing Energy Consumption by Retiring Older Vehicles: An Alternative to CAFE,” DRI/McGraw-Hill August 1991
- “Reformulated Gasoline: Proposed Phase 1 Specifications, Technical Support Document,” California Air Resources Board August 13 1990
- Unpublished cost estimates for the production of Phase 2 gasoline Turner, Mason & Company for the Western States Petroleum Association 1991
- “U.S. Petroleum Refining: Meeting Requirements for Cleaner Fuels and Refineries,” National Petroleum Council August 1993
- Cunningham R.E. et al. “Alternate Gasoline Formulation Costs Results of U.S. Refining Study,” Turner, Mason and Company April 1992
- “Control of Air Pollution from New Motor Vehicles and New Motor Vehicle Engines; Regulations Requiring On-Board Diagnostic Systems on 1994 and Later Model Year Light-Duty Vehicles and Light-Duty Trucks,” U.S. Environmental Protection Agency, Federal Register 58 32 February 19 1993
- Lyons J.M. et al. “Comparative Study of the Effectiveness of Stage II Refueling Controls and Onboard Refueling Vapor Recovery,” Sierra Research, Inc. Report No. SR93-10-01 October 1993
- Lyons J.M. et al. “Comparative Study of the Effectiveness of Stage II Refueling Controls and Onboard Refueling Vapor Recovery,” DRI/McGraw Hill August 1991
- “Comparative Study of the Effectiveness of Stage II Refueling Controls and Onboard Refueling Vapor Recovery,” Austin T.C. et al. February 1994
- Austin T. C. et al. “Cost/Benefit Analysis of Onboard Refueling Vapor Recovery and Other Control Measures Related to Evaporative and Refueling Emissions,” Sierra Research, Inc. March 1994
- Irvine, F.O. Jr. “Demand Equations for Individual New Car Models Estimated Using Transaction Prices with Implications for Regulatory Issues,” Southern Economic Journal 1983
- Gallash, H.F. Jr. “Price Elasticities of Demand at Retail and Wholesale Levels: An Automotive Example,” Business Economics 19 1 1984
- Trandel G.A. “The Bias Due to Omitting Quality When Estimating Automobile Demand,” The Review of Economics and Statistics 1991
- Berkovec J. “Automobile Market Equilibrium,” Massachusetts Institute of Technology 1983
- “Automobile Market Equilibrium,” Massachusetts Institute of Technology Austin T. C. February 1994