Hybrid- and battery-electric vehicles offer low-cost climate benefits in China

Car ownership in China is expected to grow dramatically in the coming decades. If growing personal vehicle demand is met with conventional cars, the increase in greenhouse gas emissions will be substantial. One way to mitigate carbon dioxide (CO2) emissions from passenger travel is to meet growing demand for cars with alternative vehicles such as hybrid- and battery-electric vehicles (HEVs and BEVs). Our study examines the cost-effectiveness of transitioning from conventional cars to HEVs and BEVs, by calculating their marginal abatement cost (MAC) of carbon in the long-run. We find that transitioning from conventional to hybrid and battery electric light-duty, four-wheel vehicles can achieve carbon emissions reductions at a negative cost (i.e. at a net benefit) in China. In 2030, the average MAC is estimated to be about $140/ton CO2 for HEVs and -$515/ton CO2-saved for BEVs, varying by key parameters. The total mitigation potential of each vehicle technology is estimated to be 1.38 million tons for HEVs and 0.75 million tons for BEVs.