Impacts of electric vehicles and environmental policy stringency on transport CO2 emissions

Abstract

This paper aims to fill the existing gap in the literature by examining the roles of electric vehicles (EVs) and the stringency of environmental policies in reducing carbon emissions from transportation. Using a novel method of moment quantile regression (MMQR), this study investigates the impacts of EV adoption, environmental policy stringency, economic growth, commercial transportation services, and renewable energy on transport sector’s CO₂ emissions. The results indicate that the influence of EV adoption on transport emissions varies across different quantiles. While the adoption of EVs is not significantly associated with transport CO₂ emissions at the high quantile level, a significant relationship is found in the low and middle quantiles. More importantly, transport CO₂ emissions demonstrate a significant negative correlation with the stringency of environmental policies across all quantiles. Our results highlight that the combined impacts of EVs and stringent environmental policies are more pronounced in alleviating carbon emissions compared to their individual effects. These findings hold intriguing implications for policy discussions, suggesting that EVs, along with rigorous environmental policies, offer a viable pathway to mitigate carbon emissions in the transportation industry. Furthermore, this study confirms the existence of an inverted U-shaped Kuznets curve in the context of the relationship between economic growth and transport-related emissions, implying that policies promoting economic growth might be seen as environmentally sustainable in the long term.