Quantifying the comparative value of carbon abatement scenarios over different investment timing scenarios

The world economy must rapidly decarbonize to reduce the likelihood of catastrophic climate change. Multiple decarbonization options are available to policymakers today, comprising both mature technologies that are fully commercialized and immature technologies that are not yet fully commercialized but offer potentially higher annual greenhouse gas emission reductions. Using static carbon intensity values, this analysis quantifies the comparative impact that different investment timing scenarios have on the financial value of decarbonization scenarios for Class 8 heavy-duty trucks (HDTs). We model both weight-limited and volume-limited cargo transport scenarios for a mature biomass-based diesel scenario (BBD) and an immature battery-electric (BE) scenario. We calculate the 20-year net present value (NPV) in which the social cost of carbon (SCC) benefit of low-carbon fuels is internalized. Under the weight-limited scenario, the results of this analysis illustrate that immediate investment in a mature, currently-commercialized BBD scenario yields the highest NPV and accounts for the second-lowest total quantity of greenhouse gas (GHG) emissions among the four scenarios analyzed. Under the volume-limited scenario, the BBD-BE scenario yields the highest NPV and accounts for the lowest total GHG emissions. In addition to the standard petroleum diesel (PD) scenario which offers no SCC benefit, the PD to BE scenario incurs the lowest cumulative SCC benefits despite the high potential annual SCC benefit offered by the BE option, under both the weight-limited and volume-limited scenarios.