Evaluating Low-Carbon Transportation Technologies When Demand Responds to Price

The carbon intensity (CI) of travel is commonly used to evaluate transportation technologies. However, when travel demand is sensitive to price, CI alone does not fully capture the emissions impact of a technology. Here, we develop a metric to account for both CI and the demand response to price (DR) in technology evaluation, for use by distributed decision-makers in industry and government, who are becoming increasingly involved in climate change mitigation as the costs of lower-carbon technologies fall. We apply this adjusted carbon intensity (ACI) to evaluate ethanol-fueled, hybrid, and battery electric vehicles individually and against policy targets. We find that all of these technologies can be used to help meet a 2030 greenhouse gas emissions reduction target of up to 40% below 2005 levels and that decarbonized battery electric vehicles can meet a 2050 target of 80%, even when evaluated using the ACI instead of CI. Using the CI alone could lead to a substantial overshoot of emissions targets especially in markets with significant DR, including in rapidly growing economies with latent travel demand. The ACI can be used to adjust decarbonization transition plans to mitigate this risk. For example, in examining several transportation technologies, we find that accelerating low-carbon technology transitions by roughly 5-10 years would mitigate the risk associated with DR estimates. One particularly robust strategy is to remove carbon from fuels through faster decarbonization of electricity and vehicle electrification.

Automated summary

The carbon intensity (CI) of travel is commonly used to evaluate transportation technologies, but when travel demand is sensitive to price, using CI alone cannot fully capture the emissions impact of a technology. Therefore, a new metric called adjusted carbon intensity (ACI) is developed to account for both CI and the demand response to price. The study finds that ethanol-fueled, hybrid, and battery electric vehicles can all contribute to meeting greenhouse gas emissions reduction targets, even when evaluated using the ACI instead of CI. Using CI alone could result in significant overshoot of emissions targets, especially in markets with price-sensitive demand.