Abstract
Demand-side policies, including rebates, sales tax exemptions, and tax credits promote clean vehicle adoption, with the goal of reducing local air pollution and greenhouse gas (GHG) emissions. Limited research to date on their cost-effectiveness and efficiency suggests such subsidies are unsustainably expensive, but this may not tell the whole story. KAPSARC used a nationally representative sample of new car purchases in the United States and developed a vehicle choice model-based simulation to assess the scope for reducing the costs of subsidy policies.
