He works for a state government!  That's a point I'd missed.

The California Air Resources Board (CARB) promulgated its ZEV mandate starting in 1990.  Batteries were not up to the task then, and the automakers won repeated postponements and dilutions of the mandate until it was recently rescinded entirely.

A really useful general-purpose electric vehicle requires a range of 100 miles or more, which was barely feasible (very difficult) in 1990.  But even with 1990 technology it would have been feasible to mandate a PZEV, or plug-in hybrid (gas-optional hybrid) with perhaps 20 miles of all-electric range.  The improvement of batteries over time would allow this range to be extended, replacing petroleum fuel with whatever is feeding the grid that day.

Plug-in hybrids or GO-HEV's are coming to market; the Dodge Sprinter delivery van is coming in two hybrid versions (one plug-in, one not) and CalCars is working with a company to produce Prius+ conversion kits.  The cobalt-free Saphion Li-ion battery promises to make hybrid batteries much lighter and more powerful.  Zinc-air fuel cells are already running test buses, and could run much else besides.

Here's what you could propose for the simulation:

  1. All vehicle purchases must consider battery or zinc fuel-cell vehicles first, plug-in hybrids second, hybrids third, and conventional vehicles only if nothing else is suitable.  (Avoid hydrogen, it's a blind alley.)
  2. All fuel-fired heating systems in the state should cogenerate electricity (which can supply the vehicle fleet).
  3. All building codes should aim for integrated solar energy systems.
Since transportation accounts for most oil use, cutting it means finding another energy source and getting that to vehicles instead.  All that new generation plus battery vehicles would be able to do a lot of that in the next ten years, and if you've got the preferences for all-electric vehicles built into your policy you've showed the auto companies what to aim for.  Writing your rules so that it takes in options which are already in demonstration means you won't have long to wait, and when one company making a vehicle in a particular segment can effectively shove other companies out of the market due to the preference rules, you'll spur some serious competition to not be late to the party.
These seem like good ideas, but I would rather leave the specifics to the market, because you can never know where the best solution is going to come from. I would rather pick the losers (oil), than the winners (say, solar over wind).

Beyond punitive measures on consumption, the only real spending I'm considering at this point is research grants aimed at general problems and mass transit. Perhaps the "freebates" as well. I'm also considering tax breaks for alternatively generated electricity (funded by an emissions tax?), for it would be silly to merely replace oil consumption with natural gas and dirty coal, and perhaps a rezoning initiative aimed at making new development less car dependent.

You might want to consider that if you don't do something to "pick winners" (by removing roadblocks), someone else's political pull might do it for you.  This could leave you with a politically-determined solution not in your favor.  (I don't know if your simulation includes Washington lobbyists, but it ought to.)

There are things you could do that would radically lower resistance to electric vehicles at low cost.  Requiring all new construction to include electrical circuits suitable for charging would be inexpensive, but would greatly increase the desirability of EV's and GO-HEV's by making it easier to charge them.  Similar measures for parking lots could let people charge at work and while shopping.  If a couple thousand dollars in conduit, cables, meters, etc. let the average driver eliminate 50% of  their need for motor fuel, it would pay off in about 3 years at current prices (figuring 13,000 miles/year and 25 MPG).  Where else can you get that kid of return?

Consider it to be economic development.  If you prevent money from going to the Middle East, it is more likely to stay in the country and even within the state.