Ep. 37: Going from gasoline to electric

AEA Research Highlights

Countries around the world are contemplating aggressive plans to curb CO₂ emissions in the coming decades. Many see the electrification of the transportation sector as the first step, but in a paper in the American Economic Journal: Economic Policy, economist Stephen P. Holland warns against using simple bans on the sale of gasoline vehicles to achieve that goal.

Holland and coauthors Erin T. Mansur and Andrew J. Yates analyzed a range of policies to encourage the transition from gas powered vehicles to electric vehicles and found that governments may have little control over when that switch happens.

Their work shows how policymakers can incentivize manufacturers to ramp down production of gas cars while avoiding too much damage to the overall economy.

Professor Holland recently spoke with Tyler Smith about the dangers of banning gasoline vehicles and how best to transition to electric cars.