NCPA - National Center for Policy Analysis

"Zero Emission Vehicles" Are Not Emission Free

June 30, 2015

Due to a combination of factors, including technological advances, environmental concerns, and entrepreneurial audacity, the market for pure electric vehicles is poised for a dramatic revival.

The Federal Government encourages the adoption of electric vehicles by providing a $7,500 subsidy for the purchase of an electric vehicle. Some states add to the federal subsidy with their own financial inducements.

Two factors, however, motivate explorations of the claims of the electric vehicle's environmental benefits, according to Stephen Holland of the University of North Carolina-Greensboro and his coauthors :

  • Despite being treated by regulators as "zero emission vehicles," electric vehicles are not necessarily emissions free. In 2014, the U.S. Department of Energy reported that nearly 70 percent of electricity generated in the U.S. is produced by burning coal and natural gas.
  • Charging an electric vehicle increases electricity demand which is met by several power plants that may be quite distant from where the vehicle is driven.

On average, electric vehicles generate a negative environmental benefit of about -0.5 cents per mile relative to comparable gasoline vehicles. There is considerable variation around this central result; electric vehicles used in Los Angeles, California produce a benefit of 3.3 cents per mile while those used in Grand Forks, North Dakota, produce a cost of 3 cents per mile.

One implication of these findings is the dependence of policy orientation (whether a policy encourages or discourages electric vehicle adoption) on the policymaker's jurisdiction. In the vast majority of states, when a consumer opts for an electric vehicle rather than a gasoline vehicle, they reduce air pollution in their state. However, in all but twelve states, this purchase makes society as a whole worse off because electric vehicles tend to export air pollution to other states.

Source: Stephen P. Holland et al., "Environmental Benefits from Driving Electric Vehicles?" National Bureau of Economic Research, June 2015. 

 

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