Environmental Impact and Cost effectiveness of Electric Vehicle subsidy in India
What is it about?
This paper quantifies environmental impact of Electric Vehicle subsidies on vehicular emissions and evaluates effectiveness of subsidy allocation to different vehicular segments (two wheeler, three wheeler, four wheeler and buses) .It is found that most amount of subsidy is allocated for the least environmentally cost effective vehicular segment, buses. That is, most amount of funds are allocated for marginally improving efficiency of the most efficient vehicle segment (buses). We emphasize evaluation in terms of emissions per passenger kilometer instead of emissions per vehicle kilometer for prioritizing vehicle segments for clean technology shifts. The paper recommends higher subsidy allocation for electric two and three wheeler segments to improve overall environmental impact of the subsidy scheme, market visibility of Electric Vehicles and economic savings for users.
Why is it important?
This paper critically evaluates allocation of funds in India's EV subsidy scheme (FAME-II) and recommends reallocation to improve overall environmental impact of the same.