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How can new energy vehicles affect air quality in China?— From the perspective of crude oil price

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  • Qiu-Su Wang
  • Chi-Wei Su
  • Yu-Fei Hua
  • Muhammad Umar

Abstract

From the perspective of crude oil price, this paper investigates the effects of new energy vehicles on air quality by applying a time-varying parameter–stochastic volatility–vector autoregression model. NEVs benefits from the continuous adjustment and improvement of subsidy standards by the Chinese government, and the share of new energy vehicles in the market has been continuously improved. The empirical results show that the increase in new energy vehicles can reduce PM2.5 emissions, which is also consistent with the energy and environment theoretical model, and replacing traditional energy with new energy is helpful for controlling environmental pollution. Oil price has a direct negative impact on PM2.5 concentration, and the influence of new energy vehicles on air quality is also regulated by changes in oil price. A high oil price leads to an increase in driving costs, and consumers are more inclined to purchase new energy vehicles, which achieves the purpose of improving air quality to a certain extent. To improve the air quality, the relevant departments should adjust the subsidy policy of new energy vehicles according to the change in oil price and appropriately increase gasoline or diesel consumption taxes to provide development space for the new energy vehicle market.

Suggested Citation

  • Qiu-Su Wang & Chi-Wei Su & Yu-Fei Hua & Muhammad Umar, 2022. "How can new energy vehicles affect air quality in China?— From the perspective of crude oil price," Energy & Environment, , vol. 33(8), pages 1524-1544, December.
    • Handle: RePEc:sae:engenv:v:33:y:2022:i:8:p:1524-1544
    DOI: 10.1177/0958305X211044388
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