In addition, for alternative-vehicle fuel systems, the government, in partnership with industry, will likely have a role in coordinating the commercial deployment of alternative vehicles with the fueling infrastructure for those vehicles. Coordination of vehicle sales and provision of refueling infrastructure are more challenging for hydrogen than for electricity or natural gas because hydrogen requires a completely new, large-scale fuel production and delivery system. In contrast, natural gas and electricity already have a large, robust, and ubiquitous distribution system, and the additional deployment needed is an accessible dispensing infrastructure.

Assessments of the readiness of affected technologies and continuous assessments of the effectiveness of deployment policies are important. Such assessments would require metrics to be established to determine when to initiate a deployment effort, to assess progress during initial deployment, to guide adjustments based on the achieved results, and to determine when to terminate deployment efforts that are ineffective or have been overcome by events. Starting deployment prematurely will increase the chance of failure and costs, extend the time for support, and undermine public confidence. Yet prolonged delay in deployment risks failure to meet the GHG emissions reduction and fuel saving goals. Determining technical and market readiness is challenging and should involve an unbiased expert review of available data, and consideration of the viewpoints of applicable stakeholders. In particular, the analysis in Chapter 5 indicates that subsidies of particular vehicles and fuels as a deployment strategy may be important, but careful and periodic evaluations are needed to ensure their effectiveness.

FINDING. The commercialization of fuel and vehicle technologies is best left to the private sector in response to performance-based policies, or policies that target reductions in GHG emissions or petroleum use rather than specifc technologies. Performance-based policies for deployment (e.g., CAFE standards) or technology mandates (e.g., RFS) do not require direct government expenditure for particular vehicle or fuel technologies. Additional deployment policies such as vehicle or fuel subsidies, or quantity mandates directed at specific technologies are risky but may be necessary to attain large reductions in petroleum use and GHG emissions.

POLICY OPTION. The committee suggests that an expert review process independent of the agencies implementing the deployment policies and also independent of any political or economic interest groups advocating for the technologies being evaluated be used to assess available data, and predictions of costs and performance. Such assessments could determine the readiness of technologies to benefit from policy support to help bring them into the market at a volume sufficient to promote economies of scale. If such policies are implemented, they should have specific goals and time horizons for deployment. The review process should include assessments of net reductions in petroleum use and GHG emissions, vehicle and fuel costs, potential penetration rates, and consumer responses.

FINDING. For alternative-vehicle fuel systems, government involvement with industry may be needed to help coordinate commercial deployment of alternative vehicles with the fueling infrastructure for those vehicles.

The committee’s analysis found that the timing and the scope of policy-related actions have a major influence on the successful transition to new vehicle and fuel technologies. If the policies are insufficient, ill-targeted, or improperly timed to overcome the cost barriers to making the transition, then the transition will not occur and the costs of the policy-related actions can be wasted.

7.6 THE NEED FOR AN ADAPTIVE POLICY FRAMEWORK

FINDING. Many uncertainties surround not only advanced vehicle, fuel, and energy supply technologies but also the response of the many LDV market actors to policies implemented for meeting goals such as those described in this committee’s task statement. Therefore, policy makers will be well served to establish an adaptive framework that enables the set of measures enacted to be systematically adjusted as the world changes and as new information becomes available while staying on track to meet the long-term policy goals.

As found in Chapter 6, such a framework should not only anticipate the range of conditions that lie ahead but also be designed to be robust in the face of unanticipated developments. Aspects of such policy design include provisions for integrated and forward-looking analysis, policy development deliberations involving multiple key stakeholders, and performance metrics that are monitored to trigger automatic adjustments in parameters of the policy. To be effective, such a framework requires the establishment of clear, measurable, and durable goals. Because of the uncertainty about which technologies would emerge as most effective and cost-effective, and about how consumers will respond to those technologies and fuel delivery systems, new evidence and information will be key to developing the best policies. Chapter 5 (see Section 5.7, “Simulating Uncertainty About the Market’s Response”) illustrates the dilemma in setting policy in the absence of good information about key aspects of consumer preferences on the demand side, and learning and scale economies on the supply side of the market. This and other information would have to be provided by various sources, and its assessment will inform effective policy decisions.



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