Abstract
We investigate the question of whether spending to enable ambitious EV roll-out programmes can in fact generate net gains across the wider economy. We use a multi-sector computable general equilibrium (CGE) model for the UK economy and focus on the need to upgrade electricity networks to support an initial EV penetration scenario for the period to 2030. We find that large scale spending and cost recovery for network upgrades is likely to result in net negative impacts on key macroeconomic indicators, including real income available for spending across all UK households. This is due to a combination of time-limited network upgrade activity in the presence of capacity constraints combined with the need for costs to be passed on to electricity consumers through higher bills. But the lowest income households – the group of greatest concern to policymakers – suffer the smallest losses. Moreover, the EV uptake delivers sufficient gains that deliver net positive impacts on all household incomes, with sustained expansion in GDP and employment across the economy. The key driver is a greater reliance on UK supply chains with the shift away from more import-intensive petrol and diesel fuelled vehicles towards electric ones.
Highlights
The UK and Scottish Governments have set ambitious targets for the roll-out of electric vehicles (EVs) by 2040 and 2032 (DEFRA 2017; Scottish Government (2017).1 These targets have been driven by the global recognition that EVs are a viable alternative to traditional fossil fuels vehicles and a key low carbon solution and technology for sup porting the transition to the decarbonisation of transportation (Euro pean Commission, 2014; IEA, 2017)
The analyses presented here serve to demonstrate the need to shift focus from the technology and investment concerns associated with large new low carbon initiatives to focus on how the new activity enabled may unlock, sustain and increase value in different parts of the economy
In the case of enabling the first stage of EV roll-out in the UK presented here, our results reported raise questions as to whether we may have been missing a key source of value in terms of how we have fuelled our vehicles in the past
Summary
The UK and Scottish Governments have set ambitious targets for the roll-out of electric vehicles (EVs) by 2040 and 2032 (DEFRA 2017; Scottish Government (2017). These targets have been driven by the global recognition that EVs are a viable alternative to traditional fossil fuels vehicles and a key low carbon solution and technology for sup porting the transition to the decarbonisation of transportation (Euro pean Commission, 2014; IEA, 2017). The UK and Scottish Governments have set ambitious targets for the roll-out of electric vehicles (EVs) by 2040 and 2032 (DEFRA 2017; Scottish Government (2017).. The UK and Scottish Governments have set ambitious targets for the roll-out of electric vehicles (EVs) by 2040 and 2032 (DEFRA 2017; Scottish Government (2017).1 These targets have been driven by the global recognition that EVs are a viable alternative to traditional fossil fuels vehicles and a key low carbon solution and technology for sup porting the transition to the decarbonisation of transportation (Euro pean Commission, 2014; IEA, 2017). Like any transformative low carbon solution and technology, EVs presents a variety of challenges for the vehicles industry, fuel station operators, electricity network and the government.
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