ERM was commissioned by the Natural Resources Defense Council and the Sierra Club to evaluate the costs and benefits of states adopting the Advanced Clean Cars II (ACC II) regulation. This rule, recently adopted by California, would require vehicle manufacturers to increase sales of light-duty zero-emission vehicles (ZEVs) within adopting states, reaching 100 percent sales by 2035. The ramp up of these vehicles to reach that 2035 goal is affected by manufacturer’s use of compliance flexibilities in the first five years of the program. The analysis examines on-road vehicles less than 8,500 pounds gross vehicle weight, encompassing passenger cars, crossovers, SUVs, and pickup trucks – collectively called light-duty vehicles (LDV).
Internal combustion engine (ICE) vehicles included in the LDV fleet emit criteria pollutant and greenhouse gas (GHG) emissions from their tailpipes that contribute to air pollution and climate change. The ACC II regulation can help significantly reduce these pollutants when consumers purchase ZEVs instead of ICE vehicles.
For each of the reports, ERM modeled three ACC II scenarios to better understand the range of possible outcomes from adoption, looking at how manufacturer’s may or may not use compliance mechanisms:
- ACC II Flex: State adopts California’s ACC II regulation and manufacturers use many of the compliance flexibilities available to them. Due to these flexibilities, manufacturers would be able to sell fewer ZEVs needed for compliance.
- ACC II Flex + Clean Grid: Manufacturers use the same flexibilities in the ACC II Flex scenario discussed above and includes significant reductions in electricity generation emissions.
- ACC II Full + Clean Grid: State adopts California’s ACC II regulation and manufacturers do not use any compliance flexibilities to meet their sales requirements. Like the ACC II Flex + Clean Grid scenario, this scenario assumes significant reductions in electricity generation emissions.
The results of these scenarios are compared with a baseline “business-as-usual” (BAU) scenario in which all new LDVs sold in the state continue to meet existing EPA and NHTSA vehicle standards and ZEV sales increase but never reach more than a third of new vehicle sales each year.
Each report includes a description of the LDV fleet within the state, the projected fleet under each modeled scenario, and a summary of the environmental, public health, and economic impacts of the modeled fleet transitions. Environmental impacts include changes in tailpipe and upstream GHG, NOx, and PM emissions from reduced gasoline and diesel use and increased electricity use from higher ZEV adoption. Economic impacts include:
- the financial investments required for charging infrastructure,
- the costs and savings associated with owning and operating a ZEV,
- the additional revenue or costs to electric utilities to charge the light-duty ZEVs,
- the change to national jobs, wages, and gross domestic product (GDP), and
- the monetized climate benefits from reduced GHG emissions and public health benefits from reduced NOx and PM emissions.