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Over half of the greenhouse gas (GHG) emissions in the United States come from the transportation and electricity generation sectors. To analyze the potential impact of cross-sector cooperation in reducing these emissions, we formulate a bi-level optimization model where the transportation sector can purchase renewable energy certificates (REC) from the electricity generation sector. These RECs are used to offset emissions from transportation in lieu of deploying high-cost fuel efficient technologies. The electricity generation sector creates RECs by producing additional energy from renewable sources. This additional renewable capacity is financed by the transportation sector and it does not impose additional cost on the electricity generation sector. Our results show that such a REC purchasing regime significantly reduces the cost to society of reducing GHG emissions. Additionally, our results indicate that a REC purchasing policy can create electricity beyond actual demand.

With increasing evidence for climate change in response to greenhouse gasses (GHG) emitted by human activities, pressure is growing to reduce fuel consumption via increased vehicle efficiency and to replace fossil fuels with renewable fuels. While real-world experience with bio-ethanol and a growing body of research on many other renewable fuel pathways provide some guidance as to the cost of renewable transportation fuel, there has been little work comparing that cost to alternative means for achieving equivalent GHG reductions. In earlier work, we developed an optimization model that allowed the transportation and electricity generation sectors to work separately or jointly to achieve GHG reduction targets, and showed that cooperation can significantly reduce the society cost of GHG reductions.

Greenhouse gas (GHG) emission targets are becoming more stringent for both automakers and electricity generators. With the introduction of plug-in hybrid and electric vehicles, transportation and electricity generation sectors become connected. This provides an opportunity for both sectors to work together to achieve the cost efficient reduction of CO2 emission. In addition, the abundant natural gas (NG) in USA is drawing increased attention from both policy makers and various industries due to its low cost and low carbon content. NG has the potential to ease the pressure from CO2 emission constraints for both the light duty vehicle (LDV) and the electricity generation sectors while simultaneously reducing their fuel costs. To quantify the benefit of this collaboration, an analytical model is developed to evaluate the total societal cost and CO2 emission for both sectors.

In recent years, electrification has emerged as an important means to reduce the carbon footprint of personal transportation. A key question for both policy makers and vehicle manufacturers is how quickly electric vehicles (EV) will be adopted by consumers. EV adoption will be impacted by external factors such as the price differential between gasoline and electricity, large incremental vehicle costs, and strong government policies that are far less significant for other advanced vehicle technologies such as hybrid electric vehicles (HEV) or the Ford Eco-Boost engine technology. The ability to reflect these additional externalities in adoption models will improve the reliability of EV market penetration forecasts and the quality of policy analysis. The Bass diffusion model is well established in studies of the adoption of new technologies, but it is not able to reflect those external factors related to EVs in its usual form.

Hybridization is one element in achieving better fuel economy in vehicles. Ford is pursuing a systems approach to achieve higher fuel economy. The goal is to synergistically use light weight materials, lower the rolling resistance, incorporate a low storage configuration Hybrid Electric Vehicle powertrain, with an efficient vehicle operating strategy, and reduce vehicle auxiliary losses (e.g., using high efficiency power steering and regenerative braking system) to maximize fuel economy without compromise in customer utility or cost. This paper presents an overview of this synergy being used in Ford's hybrid development.