ARB Research Seminar

This page updated June 19, 2013

Potential Impacts of Feebate Programs for New Passenger Vehicles

David S. Bunch, Ph.D., Graduate School of Management, University of California, Davis,
David L. Greene, Ph.D., Energy and Transportation Science, Oak Ridge National Laboratory, and
Timothy E. Lipman, Ph.D., Transportation Sustainability Research Center, University of California, Berkeley

June 14, 2011
Cal EPA Headquarters, 1001 "I" Street, Sacramento, CA

Research Project


A team of researchers from the University of California completed a comprehensive study to assess the potential design, implementation, and benefits of a feebate program for new light-duty vehicles in California as well as possible stakeholder responses. The study's research plan applied a variety of methodologies, including: case studies of existing policies, quantitative modeling of market responses by manufacturers and consumers, focus groups, stakeholder interviews, and a large-scale survey of California households.

The study finds that feebate policies can be used in California to achieve additional reductions in greenhouse gases from new passenger vehicles beyond those projected from emission standards alone at a net negative social cost. Different feebate program configurations could lead to greater reductions, but require tradeoffs. Factors beyond California's direct control also determine the effectiveness of feebates. Because California is roughly 10% of the domestic new vehicle market, a California-only feebate would lack the leverage to induce major vehicle design changes, with most of the emissions reductions coming instead from sales-mix shifts. Additionally, feebates are observed to interact with the stringency of national emissions standards. If standards become very stringent, feebates offer reduced incremental benefits because only relatively expensive technology will be available for adoption in response to feebates.

With regard to stakeholders, the statewide survey of 3,000 households indicates that consumers are generally concerned about climate change and energy independence, and that, based on an initial understanding, three-fourths would be supportive of feebate programs. As for industry, modeling results suggest that new vehicle sales levels would decline under all feebate programs, resulting in industry revenues falling on the order of 1 percent (or several hundred million dollars per year). Interviews with automakers indicate that their views on feebates are mixed, with details of program design being a key determinant.

Speaker Biography

David S. Bunch, Ph.D., is Professor of Management, Graduate School of Management at the University of California, Davis. Professor Bunch is known for his work in identification and estimation of discrete choice models, stated choice experiments, and combining stated and revealed preference data for modeling and forecasting consumer market behavior. Application areas for his research and teaching include marketing research, e-commerce and Internet marketing, product management, and transportation systems (through his affiliation with the UC Davis Institute of Transportation Studies since its inception). Professor Bunch was a principle in conceiving and directing a large multi-year program to develop comprehensive forecasting models and systems for vehicle purchase and usage behavior in California, designed to include future alternative-fuel vehicles (e.g., electric cars). More recently, Professor Bunch developed the CARBITS model for use by the California Air Resources Board in its work to establish regulations on greenhouse gas emissions in California. He holds a B.S. from Rice University, an M.S. from Northwestern University, and a Masters and PhD in Applied Mathematical Sciences from Rice University.

David L. Greene, Ph.D., is a Corporate Fellow of Oak Ridge National Laboratory, Senior Fellow of the Howard H. Baker, Jr. Center for Public Policy and a Research Professor of Economics at the University of Tennessee. He is an author of more than 250 publications on transportation, energy and related issues, including 100 refereed journal articles. He is an emeritus member of both the Energy and Alternative Fuels Committees of the Transportation Research Board and a lifetime National Associate of the National Academies. Dr. Greene is currently a member of the National Research Council's Committee on Transitions to Alternative Vehicles and Fuels. He is a recipient of the TRB's Pyke Johnson Award, the Society of Automotive Engineers' Barry D. McNutt Award for Excellence in Automotive Policy Analysis, the Department of Energy's 2007 Hydrogen R&D Award as well as its 2011 Vehicle Technologies R&D Award, the International Association for Energy Economics' Best Paper Award for his research on the rebound effect, and was recognized by the Intergovernmental Panel on Climate Change for contributions to the IPCC's receipt of the 2007 Nobel Peace Prize. He holds a B.A. from Columbia University, an M.A. from the University of Oregon, and a Ph.D. in Geography and Environmental Engineering from Johns Hopkins University.

Timothy E. Lipman, Ph.D., is an energy and environmental technology, economics, and policy research engineer and lecturer with the University of California, Berkeley. Dr. Lipman is serving as Co-Director for the campus' Transportation Sustainability Research Center (TSRC), based at the Institute of Transportation Studies, and also as Director of the U.S. DOE Pacific Region Clean Energy Application Center (PCEAC). Tim's research focuses on electric vehicles, fuel cell technology, combined heat and power systems, renewable energy, and electricity and hydrogen infrastructure. He completed a Ph.D. degree in Environmental Policy Analysis with the Graduate Group in Ecology at UC Davis (1999) and also holds an MS degree from UC Davis and an undergraduate degree from Stanford University.

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