Cost-Effectiveness of Greenhouse Gas Emission Reductions from Plug-in Hybrid.

by Daniel M. Kammen, Samuel M. Arons, Derek Lemoine and Holmes Hummel

- Plug-in hybrid electric vehicles (PHEVs) could significantly reduce automotive greenhouse gas (GHG) emissions and petroleum consumption, while improving energy security and urban air quality. Widespread PHEV adoption will depend upon technological and economic advances in batteries because the initial fuel savings do not rapidly compensate consumers for the capital costs of batteries today. For PHEV purchases to become economical to consumers, battery prices must decline from $1,300 per kilowatt-hour (kWh) to about or below $500/kWh, or U.S. gasoline prices must remain at about $5 per gallon-or the federal government must institute policy innovations with equivalent effects. Any carbon price would have to exceed $100/t-CO2-eq in order to render PHEVs' reductions cost-effective, and hence a carbon price alone represents an impractical short-term means of achieving this goal.

Kammen, D.M., S.M. Arons, D. Lemoine and H. Hummel (2008). "Cost-Effectiveness of Greenhouse Gas Emission Reductions from Plug-in Hybrid Electric Vehicles." Goldman School of Public Policy Working Paper No. GSPP08-014, Nov 2008.