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Promoting Sustainable Innovation-Led Growth? The Potential and Risks of EV Policies


Gonzalez Otero,  Begoña
Max Planck Institute for Innovation and Competition, Max Planck Society;

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Gonzalez Otero, B., & Esteban, H. (2022). Promoting Sustainable Innovation-Led Growth? The Potential and Risks of EV Policies. Max Planck Institute for Innovation & Competition Research Paper, No. 22-19.

Cite as: https://hdl.handle.net/21.11116/0000-000B-9EE7-F
The transportation industry is one of the top five industries in the world for greenhouse gas emissions. Even though burning fossil fuels for our cars, trucks, ships, trains, and airplanes accounts for the majority of emissions, road passenger transportation accounts for the majority of them. The primary solution for moving towards greater environmental sustainability in passenger transportation by both, car manufacturers and governments, is electric vehicles (EVs). So far, the message has been that consumers should buy EVs to help solve the climate change problem, which would allow us to retain and even enhance our levels of mobility. But can we really achieve climate-neutral transportation with EVs?

The three countries with the highest absolute emissions, China, the United States, and the European Union, also set the global agenda with their respective policies. Significant variations in their strategies would have a cascading effect on the decarbonization of transportation. Understanding the crucial contributions that both the public and private sectors make to the promotion of innovation-led growth is essential if we are to achieve climate-neutral passenger road transport. Since consumer protection and climate change are both strong policy arguments, climate policy to reduce greenhouse gas emissions from transportation must significantly rely on innovation. As a result, many innovations in road transportation are supported by environmental, economic, and social considerations. For instance, every path toward EV innovation must include the production of energy from renewable sources and guarantee their independence and supply. This paper focuses on the potential and risks for innovation based on a comparative policy and regulatory examination of EVs in these three regions. It provides suggestions for a coherent and globally coordinated policy framework and for the transitioning to a truly circular road passenger mobility system.