POLICY OPTION. The committee supports consistent R&D to advance technology development and to reduce the costs of alternative fuels and vehicles. The best approach is to promote a portfolio of vehicle and fuel R&D, supported by both government and industry, designed to solve the critical technical challenges in each major candidate pathway. Such primary research efforts need continuing evaluation of progress against performance goals to determine which technologies, fuels, designs, and production methods are emerging as the most promising and cost-effective.

FINDING. Current methods for the accounting of net GHG emissions associated with the production and use of transportation fuels involve numerous uncertainties. Reducing the uncertainties and developing robust accounting approaches are important for defining R&D strategies, guiding private sector investments, and developing effective public policies for reducing the net GHG emissions associated with fuels used by light duty vehicles.

POLICY OPTION. Because of the uncertainties associated with existing methods of accounting for the net GHG emissions impacts of the production and use of transportation fuels, especially for electricity, biofuels, and hydrogen, the committee suggests further efforts to develop accounting methods to account for GHG emissions that are applicable to the design of public policies for addressing these impacts.

7.5.2 Demonstration

The alternative vehicles discussed in Chapter 2 have demonstrated their performance readiness. Remaining challenges are cost reduction and further advancement through continued R&D, and potentially, successful deployment. Private industry may choose to demonstrate new technologies or new vehicle models or prototypes, but the need for further government involvement appears to be limited to areas of special government interest, such as validating the safety or performance of alternative vehicles.

For fuels, vehicles, and GHG management technologies that show promise of commercial readiness, appropriately scaled demonstration projects that are supported by both industry and government are likely to be important for validating feasibility, proving physical and environmental safety, and establishing cost-effectiveness. The results of such demonstrations could provide essential information for identification of which alternative fuel and GHG management technologies have long-term potential to both compete with gasoline in the marketplace and achieve GHG emissions reduction goals, and to establish readiness for deployment. Another appropriate role for the government is the coordination of integrated demonstrations of promising vehicles and fuel systems or stations.

FINDING. Demonstrations are needed for technologies to reduce GHG emissions at appropriate scale (e.g., hydrogen produced with low net GHG emissions and CCS) to validate performance, readiness, and safety.

FINDING. Integrated demonstrations of vehicles and fueling infrastructure are necessary to promote understanding of performance, safety, consumer use, and other important characteristics under real-world driving conditions.

POLICY OPTION. The committee supports the government’s involvement in limited demonstration projects at appropriate scale to promote understanding of the performance and safety of alternative vehicles and fueling systems. For such projects, substantial private sector investment should complement the government investment, and the government should ensure that the demonstration incorporates well-designed data collection and learning to inform future policy making and investment. The information collected with government funds should be made available to the public consistent with applicable rules that protect confidential data.

7.5.3 Deployment

Many of the findings and policy options mentioned earlier in this chapter will encourage deployment of highly efficient or alternative vehicles and alternative fuels, and policy will be a critical driver of deployment. Policy options include CAFE and feebate policies for vehicles, performance standards, consumption mandates or pricing policies for fuels, and carbon control policies. Modeling results described in Chapter 5 show that such policies will greatly increase the shares of highly efficient and alternative vehicles over time. However, Chapter 5 also found that additional deployment policies will likely be needed for some alternative-vehicle fuel systems if they are to be part of the strategy to attain the significant reductions in petroleum use and GHG emissions discussed in this report. Additional policies such as subsidies or mandates for vehicles or fuel infrastructure investment will depend on the path of future technology, market conditions, and the urgency of the energy security and climate-change issues that these fuels are needed to address. The timing of additional deployment policies is critical and will depend on how close any one technology or combinations of technologies are to market readiness. At present, it is unclear which vehicle and fuel technology or technologies will have consumer acceptance and the best potential for lowest costs at scale to achieve the goals addressed in this study. Data on the costs of particular technologies will accumulate over time and will inform future policy decisions.

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