Evaluation of the promotion policy on electric vehicles using a static CGE model

Electric vehicles (EV) are a crucial technology to tackle environmental issues like air pollution and energy depletion. In this paper, we use a static computable equilibrium model to estimate the effects of two different policies: the subsidy and the credit regulation. The results show that both policies have negligible effects on the macro economy. The subsidy on EV creates more emissions as the substitution between conventional vehicles and EV isn't very effective, leading to more production. The credit regulation, otherwise, suppresses the production of conventional vehicles while encouraging the production of EV, thus, emissions of CO2, NOx, Dust, COD are largely reduced. And the combination of the two policies has a mixed effect. However, the emissions of SO2 and NH3-N increase no matter which policy is implemented, suggesting that different sectors perform diversely under the stimulus. Policy-maker needs to make a trade-off between the benefits and risks of certain policies.