Decarbonization and supporting policies can have important implications for household expenditures on energy services with distributional impacts across different customers. Recent policies and incentives have included carveouts and other considerations of distributional impacts, environmental justice, and equity. This analysis investigates one dimension of equitable decarbonization for the transport sector—namely, how household vehicle purchasing decisions can vary across income classes. Using detailed survey data and EPRI’s U.S. Economy, Greenhouse Gas, and Energy (US-REGEN) model, which has been modified to include income classes, this analysis illustrates the effects of income on vehicle electrification and associated implications for costs and energy burdens. Electric vehicle adoption increases for higher-income households due to characteristics such as their higher driving intensities and lower effective discount rates. However, these income effects are small relative to other considerations, as electric vehicle shares are high across all household incomes (60–80% of new sales are electric by 2050).
Authors John Bistline