Analysis of the Environmental and Socio-economic Benefits of Introducing Cleaner Vehicles in China: Policy Implications

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Along with its impressive economic growth China has experienced not only serious environmental pollution but also a very rapid increase in Green House Gas emissions and is now the largest emitter of CO2. Together with the power and steel sectors the transportation sector is the main contributor to CO2 emissions. In addition the transportation sector is also associated with air pollution and health damage. In order to address these challenges, at the COP15, the Chinese government set the target to decrease its CO2 emission per GDP by 40%-45% by 2020 compared with 2005 levels and increase non-fossil fuels rate at primary energy sector of 15%. The government has also put especial efforts to reduce air pollution through the Five Year Plans by introducing targets to reduce SO2, NOx, PM, among others. In order to determine the feasibility to reduce GHG emissions this research evaluates the potential of environmentally friendly motorized road vehicles (Hybrid Vehicle and Electric Vehicle). The research proposed 4 scenarios and designed social-economic model & environment model & automotive model based on Input-Out analysis. The results show that HV could be the most suitable option for promoting both GHG reduction and GDP increase with 1% GDP per GHG Emission (GpE) increase under 0.23 ton /Yuan carbon tax rate in China in the short term. The results of the study also show that these options should be followed by a transition to introduce EV in the long term.

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Our way of life is on a collision course with geological limitations. Ever since petroleum geologist M. King Hubbard correctly predicted in l956 that U.S. oil production would reach a peak in l973 and then decline (1), scientists and engineers have known that worldwide oil production would follow a similar trend. Today, the only question is when the world peak will occur.The U.S. transportation system depends almost entirely (∼97%) on oil (2), and foreign imports have risen steadily since l973 as the demand increased and domestic supplies decreased. Today, more than 60% of U.S. oil consumption is imported and the dependence on foreign oil is bound to increase. 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But changing the total available reserve from 3×1012bbl to 4×1012bbl increases the predicted time of peak production by merely 11yr, from 2019 to 2030. The present trend of yearly increases in oil consumption, especially in China and India, shortens the window of opportunity for a managed transition to alternative fuels even further. Hence, irrespective of the actual amount of oil remaining in the ground, peak production will occur soon and the need for starting to supplement oil as the primary transportation fuel is urgent because an orderly transition to develop petroleum substitutes will take time and careful planning.Some analysts claim that hydrogen can take the place of petroleum in a future transportation system (56). But in previous publications, the authors have shown that hydrogen is inferior as an energy carrier to electricity (7) and that the energy efficiency of hydrogen vehicles, especially if the hydrogen were produced by the electrolysis of water, is considerably less than the efficiency of hybrid electric vehicles or fully electric battery vehicles (7). The results of these analyses have subsequently been confirmed by other studies, particularly those by Hammererschlag and Mazza (8) and Mazza and Hammerschlag (9).Before hydrogen could become a useful automotive fuel, an entirely new system of energy production and distribution on twice the scale of today’s electric power generating stations and distribution grid would have to be built. It has been estimated that a hydrogen transmission and storage system to fuel only 50% of the automotive fleet by the year 2020 would cost at least $600 billion (10) and that to make the hydrogen by electrolysis would require doubling the electric power generation rate (11). There is no question that a paradigm shift in fuel for worldwide transportation is imperative, and before embarking on such a huge investment, it is prudent to compare the hydrogen option with alternative ways to provide the energy and/or fuel needed by the transportation system.This paper presents and analyzes two generic approaches to meet the future demand of the U.S. ground transportation systems that do not require hydrogen, can use existing transmission infrastructure, and can eventually reduce CO2 emission drastically with a renewable energy system. Both these pathways are examined from an energetic and environmental perspective and are shown to be superior to the hydrogen economy on both these criteria. The first approach is a demand-side strategy based on the use of electric hybrid vehicles, an energy-efficient vehicle configuration, combined with a liquid fuel. This approach could use the existing liquid-fuel distribution system, but would need an expanded and robust electric-transmission system, albeit on a smaller and much more economical scale than a hydrogen fuel-cell infrastructure. The second approach is a supply-side strategy, based on synthetic fuel generation that can use initially coal or natural gas as the energy source, but can eventually transition to renewable biomass sources. The two pathways are not mutually exclusive, but can be combined into a secure and efficient future transportation system as will be shown in this paper.Cradle-to-grave energy efficiency is an important criterion for comparing energy-source utilization pathways because if a pathway is less efficient than another pathway that accomplishes the same final goal from the same amount of primary energy, then the less efficient pathway requires more primary energy to accomplish the same end. Hence, if the primary energy source is nonrenewable, then the less efficient pathway leaves less of the energy source for the future. It also means that more pollution is produced and the cost for the final end use is likely higher. However, if the primary energy source is renewable, then the efficiency does not change the amount of primary energy available in the future and energy efficiency does not have the same significance for renewable energy sources as for nonrenewable sources. Efficiency is, of course, important because the cost of delivering the energy is usually strongly influenced by the system efficiency. But a comparison between renewable and nonrenewable pathways should be based on economic and environmental criteria, such as cost and CO2 generation.In order to demonstrate the urgency for initiating a plan to supplement oil as soon as possible, we have made calculations to predict the potential gasoline savings based on the very optimistic scenario that, at an arbitrary starting time, all new light vehicles sold in the U.S. would be either hybrid or electric vehicles. The term “light vehicles” as used here includes all automobiles, family vans, sports utility vehicles, motorcycles, and pickup trucks. This scenario is an extreme case to show that because of the slow turnover of the light-vehicle fleet, it takes a long time for a significant impact on gasoline consumption to occur. 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Figure 2 shows the ratio of the total number of vehicles in the fleet, the number of all-gasoline vehicles in the fleet, and the number of hybrid or EV vehicles in the fleet to the total number in the fleet as a function of time. The total number of vehicles increases by over 60% in 25 years at the assumed 2%/y net increase while the number of all-gasoline vehicles decreases linearly from 100% initially to 0% after 20y. The number of hybrid or EV vehicles increases from 0% initially to 58% in 10y and 100% in 20y. This graph emphasizes how long it takes for the introduction of a new vehicle type to show a significant impact on the composition of the vehicle fleet, even when only the new vehicle types are sold after a starting point. This slow turnover of the fleet is the fundamental reason that the effects on gasoline consumption show up so slowly.Figure 3 shows the annual reduction in gasoline consumption as a function of time. 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As would be expected, the nongasoline vehicles have a much greater impact on gasoline usage than gasoline-using HEVs, and the impact occurs more rapidly.Figure 4 gives the cumulative gasoline savings for the various scenarios compared to an all-gasoline fleet. HEVs save cumulatively 16% after 10yr and 20% after 20 years. Because of the cumulative savings, HEVs would use in 28yr the same amount of gasoline as an all-gasoline fleet would use in 20yr. PHEV20s save 21% after 10yr and 38% after 20yr. These results emphasize the relatively small effect on gasoline consumption that these highly optimistic scenarios have in the first decade after implementation. DHEVs, DPHEV20s, and EVs, the options without any gasoline use, save cumulatively as much as 32% after 10yr and 59% after 20yr.A 2004 report of the Committee on Alternatives and Strategies for Future Hydrogen Production and Use (14), prepared under the auspices of the National Research Council (NRC), concluded that the vision of a hydrogen economy is based on the expectation that hydrogen can be produced from domestic energy sources in a manner that is “both affordable and environmentally benign.” An analysis of currently available technologies for achieving this goal (7) showed that irrespective of whether fossil fuels, nuclear fuels or renewable technologies are used as the primary energy source, hydrogen is inefficient compared to using the electric power or heat from any of these sources directly. Given these facts, it is important to note that the NRC report also stated that “If battery technology improves dramatically, all-electric vehicles might become the preferred alternative (to fuel cell electric vehicles).” The report also noted that “Hybrid vehicle technology is commercially available today and can therefore be realized immediately.” If synthetic fuels made from coal, natural gas, or biomass were used in place of gasoline in hybrid vehicles, the consumption of oil could be reduced immediately and eventually eliminated. In the light of these observations, it is therefore important to examine what the current state of battery technology is, what can be expected in the near future, and how these developments affect the potential of hybrid vehicle performance and economics.To assess the performance of a battery for electric vehicles, the following characteristics have to be considered: Specific energy, a measure of the battery weight in units of watt hours per kilogramEnergy density, a measure of the space the battery occupies in watt hours per cubic meterCapacity, the total quantity of energy a battery can store and later deliver in watt hoursEfficiency, the ratio of energy that can be extracted from the battery to the initial energy input to change the batterySpecific power, the rate at which the battery can deliver the stored energy per unit weight of battery in watts per kilogramBattery lifecycle, the number of charge and discharge cycles that a battery can sustain during its lifeA significant effort to replace oil as a transportation fuel was undertaken ten years ago in California, when the California Air Resources Board [CARB] mandated that a certain percentage of all vehicles sold in California had to have zero tailpipe emissions (15). At that time the only technology available to meet the mandate was the all battery electric vehicle [BEV], which required no gasoline for its operation. The experiment to mandate the use of BEVs in California failed because the technology was not ready for commercialization. The best battery available in 1995 (fluted-tubular lead acid) had an energy storage density of 35Wh∕kg, a specific power of 100W∕kg, and a life cycle of 600-1000cycles. With these battery characteristics, the maximum range of a BEV was only 50mil, and the battery pack required replacement every 25,000mil at a cost of between $7000 and $8000 for an average BEV (16). Since that time, new batteries have been developed by Panasonic, VARTA, and SAFT, that have twice the energy-storage density, three times the specific power, and two or three times the cycle life of the lead acid batteries sold in California, as shown in Table 1 (13).In addition to the advanced batteries, a new concept has been developed that combines the best qualities of hybrid and battery vehicle technologies. This “plug-in hybrid vehicle” can recharge vehicle batteries during off-peak hours, and since most cars are parked 90% of the time, there are plenty of charging opportunities at both home and the workplace. Furthermore, a large portion of the electric generation infrastructure is only needed for peak demands and lays idle much of the time. Hence, if charging automobile batteries occurred during off-peak hours, they would level out the load of the electric production system and reduce the average cost of electricity (17). 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According to a study by EPRI (13), on average 1/3 of the annual mileage of a PHEV20 is supplied by electricity and 2/3 by gasoline. The percentage depends, of course, on the vehicle design and the capacity of the batteries on the vehicle. A PHEV60 can travel 60mil on batteries alone, and the percentage of electric miles will be greater as will the battery capacity.The tank-to-wheel (more appropriately, battery-to-wheel) efficiency for a battery all-electric vehicle according to EPRI (13) is 0.82. In a previous analysis by the authors (18), the efficiency in 1993 was only 0.49. Comparing these results shows the enormous improvements in the electric component efficiency (controller 87%, battery 90%, charger 90%, drivetrain 90%;). When these numbers are multiplied by a hybrid-weight-times-idle factor of 1.3 (19), the overall efficiency of an electric hybrid is 82%, the same as that used in the EPRI study (13). It is important to note that currently all-electric vehicles can be nearly twice as efficient as when (18) was published.Given the potentials for plug-in hybrid vehicles, the Electric Power Research Institute (13) conducted a large-scale analysis of the cost, the battery requirements, and the economic competitiveness of plug in vehicles today and within the near term future. Table 2 presents the net present value of life-cycle costs over ten years for a midsized combustion vehicle [CV], hybrid vehicle [HEV] and a plug in electric vehicle with a 20mil electric-only range [PHEV20]. The battery module cost in dollars per kilowatt is the cost at which the total life-cycle costs of all three vehicles would be the Figure presents cost for battery as a function of number of units produced per year. According to this a production of about units per year units would the cost reduction to make both hybrid electric vehicles and plug in electric vehicles 3 presents the electric and plug-in hybrid vehicle battery that would be to make electric vehicles cost for vehicles according to EPRI (13). As shown in Table the characteristics of batteries, and batteries are to meet the required cost and performance The battery characteristics shown in Table 1 and Fig. are years and it is likely that more from would show Furthermore, the EPRI study assumed a current gasoline cost of A of the analysis based on a gasoline cost of that the battery at which the net present values of conventional combustion vehicles and battery vehicles are would up from to for an HEV and from to for a PHEV Figure shows the cost for batteries production for Hence, it that the cost of HEVs and with available batteries is with that of engine The EPRI analysis is because it compared the performance of all battery electric and plug in hybrid vehicles only to currently available combustion as shown in the use of diesel in a hybrid would increase the efficiency of compared to a hybrid with engine and the amount of fuel Hence, it be concluded that the EPRI analysis is it includes advanced batteries, it does not the increased efficiency by using diesel of combustion Furthermore, diesel fuel, as will be shown in can be produced from coal or renewable sources as can the electric power required for charging the The introduction of to the energy is the of this it is and can be as renewable technologies become more cost and fossil fuels more natural gas and biomass can be into liquid the most fossil fuel in the is used almost to In order to make coal into a vehicle fuel, it first be to a gas by a of The of this then be to of that can be used as vehicle fuel. biomass and natural gas can be used of coal or combined with coal to make these and are discussed gas can be used as a vehicle fuel, or it can be with to make gas, which can be used to fuels in the same manner as for The technology is well developed as shown by the recent of of which will natural gas, which is currently to liquid fuel. These and a in of which is diesel in With a with an estimated billion and a diesel with the of with an estimated at The of natural gas to make vehicle fuels was discussed in an paper by the authors (18), and of those results are presented later for comparison with coal as the fuel It should also be noted that biomass can be either alone or in with coal and to liquid fuels by the same as coal, or it can also be and then into vehicle fuels as in is a that is a in the production of synthetic liquid fuels from coal for transportation The coal is shown in Fig. It a such as coal or with to and This gas can be to hydrogen or to make or can be used as a transportation fuel in but this study on diesel fuel because are more the first of the coal is with limited to and The in the coal is to hydrogen gas, and are as In the shift is with to and The and hydrogen are from the and to the or into The that is in this is from the in a for Thus, it can be from the and are the costs when liquid fuel is produced from The estimated time of for a is to years. The depends on the production capacity of the the cost of a with a capacity to barrels of liquid fuel per is estimated to be of the order billion of coal claim that there will be gas pollution from the However, in the future vehicle emissions of can be reduced those of vehicles, by the use of plug-in hybrid electric vehicles and by of the from the fuel production is a synthetic diesel fuel that can be made from coal by of The is first to make which can then be to The is to the and the gas is to electricity for the as shown in Fig. is a gas at but can be under and then can be to other liquid of make it an fuel for It is similar to but has a number The number to the of a fuel to With combustion of the fuel occurs after and emissions are as a of combustion The combustion also in by the need for to the shown in Fig. coal into liquid fuel. The was by scientists before and is used today in by to make diesel fuel gas to make a liquid fuel of synthetic diesel fuel, which is similar to and which is used to make synthetic gasoline (7). The is from the liquid diesel and to the The gas resulting from is to electricity for the can be made from coal by by gas After the hydrogen gas and are from the gas, and hydrogen are The hydrogen can be stored and the can be for electricity and/or to the shift as shown in Fig. store and the hydrogen, it is either to it to or to it at a The efficiency of the first option is while the second is efficient (7). Both and hydrogen have been for fuel storage in a of hydrogen fuel-cell vehicles is in the of coal or natural gas into a vehicle fuel. The energy efficiency of these is important in the overall well to efficiency of these alternative Table 4 presents or efficiency for various fuels from coal or natural and have reported the and energy for with of the and values are used (18) presented for natural gas without and estimated that of CO2 the efficiency of by about two percentage Since natural gas only about as much per unit of energy as coal, it has been assumed that will reduce the efficiency of to fuels by percentage point. Thus, percentage has been from values reported by (18) to the values shown in Table In the of data for the of natural gas to the authors assumed that the ratio of the for natural gas is the same as that for coal to estimate this efficiency as shown in Table 4 that the production of liquid fuels from natural gas is more efficient than from But is in and the technology is not a It is however, for the that is currently into the in gasoline The of of these has been But production is the more for the term and does not require hydrogen as a fuel or energy Today, the of fuel from coal, at the only in The of supplies of such fuels as gasoline, and The economic and of coal have been U.S. and for a fuel in using technology and are to the that will have a capacity to of diesel fuel. has in recent NRC study other technologies that could synthetic fuels from biomass and presents a comparison of the energy on energy for production from and These significant in synthetic But the for synthetic fuel production need to be multiplied before synthetic fuels can make up for the between demand and of gasoline after the peak in oil production is on the analysis presented in this we the following and oil production is expected to peak within the and as is liquid fuel are expected to increase This could lead to a crisis in the U.S. transportation system that on 60% of which is options for a transportation crisis by and/or liquid fuels derived from petroleum with synthetic fuels from natural gas, or coal and by demand by increasing the efficiency and mileage of options to have impact they be at least before hybrid vehicles are a option to reduce the liquid fuel consumption of future transportation hybrid vehicles can the existing infrastructure for electric power transmission by charging batteries during peak hours and use liquid fuels only for a fraction of overall power hybrid vehicles can diesel that can be by synthetic fuels derived from coal, natural gas, or use efficiency is increased efficiency alone will not be to the transportation without the production of large of synthetic liquid number of technologies for synthetic diesel that can be used in diesel and reduce emission of that lead to scale of effort required to provide synthetic fuels will require years to and should therefore be as soon as hybrid or all-electric vehicles with available battery technology in an are compared to gasoline of the of the transportation it is that be by government such as for the of synthetic fuels and CO2 high liquid fuel mileage for automobiles, and for efficient plug-in hybrid scenario in this paper for a secure transportation system can be immediately with available technologies and without hydrogen or authors to for as of an independent study for the of at the of

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