The environmental benefits of transportation electrification: Urban buses

Abstract

Rapid technological change is opening new possibilities for electrification of the transportation sector. This paper offers novel empirical guidance to policymakers considering investments in electric urban buses. We determine the environmental benefit of using electric buses rather than diesel or Compressed Natural Gas (CNG) for urban transit. For diesel and CNG we calculate air pollution damages by combining emission rates with damage valuations from the AP3 integrated assessment model and the social cost of carbon. For electric buses we calculate air pollution damages by combining the damage valuations with estimates of the marginal increase in emissions from electricity usage. The environmental benefit is positive on average across all counties in the contiguous U.S. when comparing electric to either diesel or CNG. The environmental benefit of operating an electric bus fleet (rather than diesel) is about $65 million per year in Los Angeles and above $10 million per year in six other MSAs. Including the environmental benefit, we calculate the net present value (NPV) of bus investment. Relative to diesel, the NPV benefit of an electric bus is positive in about two thirds of urban counties. Relative to CNG, the NPV benefit is negative in all counties.