-In order to gauge the benefits of electric over thermal vehicles, we will use a cost/benefit analysis which will bring down to a single economic dimension all the aspects which separate the two vehicles. Both types of vehicles have different levels of noise, greenhouse gas and pollutant emissions, as well as cost structures since electric vehicles require batteries and a charging station. By transforming these dimensions into one economic dimension through monetarization, we will be able to compare thermal and electric vehicles for all dimensions. How are we going to draw this comparison? First, we will calculate the total cost of ownership for either vehicle to see if throughout its lifespan, an electric car is cheaper than a thermal car. You can review the video dealing with the total cost of ownership is. Then, we will use monetarization and assign an economic value to the gains, be they environmental or otherwise. We do not need new studies since the French Ministry for Transport or the European Commission gives us tutelary values, which must be used in economic calculations to put a value on environmental externalities. When it comes to noise, the value depends on where and when the noise is produced. The more people are impacted, the higher the value. With pollution, we will evaluate the public health costs, so we need to understand how the pollutants interact, as well as their isolated effects on our healths to precisely determine the value. Then, we can assign a value. For climate change, a European market gives us the price of one tonne of CO2 but it does not match the social value, which is tied to all consequences of climate change. So the reference values recommended by the Quinet report are 32 euros a tonne as of 2010 to converge progressively toward 100 euros a tonne by 2030, which is the reference value recommended by the Stern review. The last question is tied to accidentology. Both types of vehicles do not produce the same behaviors. An electric car leads to a more peaceful driving and probably fewer accidents. How can this decrease in accidents be valued? We have to assign a value to human life. This value's only purpose is to help us be rational and consistent in our decisions. When should a crossroads be made safer? Or when should public money be spent to implement charging stations for electric vehicles? How is this value determined? Either through an economic approach by valuing the loss of production caused by an early death, or a legal approach, by using the value assigned by the courts to suffering damages. Or we can reveal the value of past public decisions in order to make them consistent over time. What are the recommendations regarding the value of human life? The Quinet report suggests 3 million euros in case of an accident. However, early death is not the only consequence of externalities. It could be a decrease in lifespan caused by pollution. Then, we should use a value of life year, which is 115 000 euros for every year lost. On the same basis, we can determine the cost of minor or serious injuries in case of accidents. One sensitive issue methodologically speaking to perform a cost/benefit analysis of the electrification of the fleet of vehicles is the discount rate. You can also review the video dealing with the discount rate. It refers to expressing the current equivalent of a future value. On this graph, you can see the 8% discounted value of 100 000 euros. In other words, what do I believe is the current equivalent of 100 000 euros 10, 20, 40, 50 years from now. Here we have an 8% discount which was the rate for public spending calculations until 2004 in France. This rate makes sense in many countries, where inflation may be slightly higher than in Europe. It leads to strongly minimizing what will happen in the future. 100 000 euros 10 years from now is the same as 46 000 euros today. To prevent 100 000-euro damages 10 years from now, I will only have to invest 46 319 euros today. The further away I look, the lower the discount rate draws the economic value of an incident. To prevent a 100 000-euro damage 50 years from now, with an 8% rate, I will only have to invest 2 132 euros today. If we choose a completely different discount rate, for instance, the one picked by Stern in his review on the costs of climate change, which was 1.4%, it changes everything. As we can see, one event which takes place 10 years from now, has a value almost twice as high as with an 8% discount rate. When I look 50 years from now, an event will have a value 20 to 30 times as high. When talking about climate change with long-term consequences, using a 1.4% discount rate will allow us to adapt our policies to take climate change into account and assign a better value to any loss associated with climate change which will occur in 30, 40 or 50 years. Nowadays, in France, the discount rate is usually 4% over 20 years and then 2%, which gives us the light blue curve. Compared to the 8% rate which was used until 2004, an event 50 years from now will have a value 10 times higher. And the Quinet report recommends an adjusted discount rate depending on the risks of around 4.5% per year, which is an intermediate solution. This will have a strong impact on how we will quantify the benefits associated with the electrification of the car related to public health, greenhouse gases, accidentology and noise. Lastly, some things are not valued but make turning to electrification more interesting. First, if we have to face more intense or faster climate change than expected or a strong rise in oil prices, we will be glad to have electric cars and their charging stations to forego the use of thermal cars. This is the option value of electric cars tied to the flexibility they will offer us in the future in case of climate or economic shocks. We could also value the interest of electrification to reduce our energy dependence which keeps our hands tied geopolitically with the countries we import fossil fuels from. Lastly, some effects are connected with taxes. Part of the government revenue is tied to fuel. When we go from thermal cars to electric cars, this revenue will decrease and need to be offset by other revenue which will not be neutral. I am done with the first part of this video on cost/benefit analyses applied to electric cars. To conclude this section on methodology, monetization is very useful to bring back to one dimension, the economic dimension, different environmental and societal aspects. The fact that ministries for transport give us tutelary values to use makes it easier for us and allows us to compare the studies made with the reference values. However, in a cost/benefit analysis, some things cannot be valued or the relevance of some reference values may be questionable. So we must be able to interpret qualitatively the results. In the second half, I will present a study which uses the reference values to explain why it would be interesting to electrify a range of vehicles.
