Not as Easy as it Looks: Creating Environmentally Sound Electric Vehicle Policy
Joshua Burg | April 2021
Tesla charging stations in Zurich, Switzerland (2019)
ith President Biden’s infrastructure plan front and center in the news cycle, debates have erupted over what indeed should be considered “infrastructure.” Behind the curtain of the tedious and unhelpful debate over semantics remains several detailed policy proposals that deserve deeper examination.
Biden’s current proposal would provide $174 billion for investments in electric vehicles (EVs) and related EV infrastructure, including charging stations. The plan’s investments come in the form of tax rebates and credits for individuals, firms, and agencies that purchase EVs, along with funds earmarked for the construction of over 500,000 charging stations by 2030.
By lowering the cost of purchasing an electric vehicle and increasing the convenience of charging, the plan would almost certainly encourage the purchase of EVs. However, is such an investment of public finances worthwhile from an environmental perspective?
On the surface, the answer appears relatively straightforward. If fewer automobiles run on gasoline, then less carbon dioxide, carbon monoxide, nitrous oxides, and particulates will be emitted into the atmosphere. The reality, however, is much more complicated.
EV’s: Dirtier Than One Might Think
EV-related pollution often comes from more obscure sources than direct emissions. One of the most significant potential sources of pollution from EVs comes from vehicle charging. When electric vehicles charge, the electricity is generated from local power sources. If a charging station is powered by a solar power station, then perhaps pollution from electricity generation should not be a concern. However, if a charging station is primarily powered by a coal power plant, the electric vehicle has simply replaced its own emissions with coal-based emissions. Therefore, to maximize the environmental benefits of EVs, an effective transition would include a parallel and proportional expansion of renewable energy investments.
Yet confusion remains as to whether the United States would actually experience environmental benefits from expanding the use of EVs, given the present state of our energy infrastructure. The answer is not black-and-white.
The Necessity of a Regional Approach to EV Policy
In an article published in the Journal of Thermal Science, researchers found that the benefits of transitioning to electric cars depended upon the amount of energy produced by thermal power plants, i.e., fossil-fuel power stations. Countries with higher emission factors of electricity production, a measurement that relates the quantity of CO2 emitted into the atmosphere with the amount of electricity generated by the emissions, were more likely to incur net negative environmental effects if they transitioned to EVs. The authors established that countries with an emission factor of electricity production lower than 727 gCO2 per kWh would benefit from replacing all “petrol fossil fuel cars” with electric cars.
As of 2018, the average emission factor in the United States was low enough to make a transition to electric cars effective at reducing emissions, on average. However, several electrical grid subregions in the U.S. had emission factors higher than the recommended 727 gCO2 per kWh. These regions, defined by the firm tasked with providing regional electricity grid infrastructure, include the SERC Midwest (Southern Illinois, Missouri, and parts of Iowa), MRO East (Central/Northwestern Wisconsin), and HICC Oahu (Oahu, Hawaii). This means that, in these regions, incentivizing a total switch to electric vehicles would produce higher CO2 emissions than if each region maintained fossil fuel cars.
Taking this into account, should the Biden infrastructure plan try to limit investment in EVs by region to account for a region’s emission factor?
Although certain regions may generate excess pollution, investing in electric car infrastructure around the country still seems to be beneficial. The emission factors in the regions that generate net negative losses only barely exceed the 727 gCO2 per kWh. If the United States continues to trend towards greater use of renewable energy and emphasizes these regions, it is quite likely that within a few years, EV infrastructure would be well worth it. Additionally, most of the U.S. would see environmental benefits from transitioning to EVs, and a lack of charging infrastructure in neighboring states may discourage the purchase of EVs in areas that would see net positive effects from a transition to electric vehicles.
Charging, however, is not the only activity associated with EVs that brings potential negative environmental consequences. The production of EVs also entails substantial quantities of pollution. Specifically, the manufacture of a battery for a mid-size electric vehicle produces 15% more emissions than the production process creating gas-powered vehicles of equivalent size, and requires the use of difficult-to-recycle materials such as cobalt. Regarding the greater emissions during production, the excess emissions are offset within six to eighteen months of driving due to the extremely low carbon blueprint of EVs. However, the use of cobalt remains a complicated matter. Cobalt is both difficult to extract and hard to recycle. The exact environmental toll of cobalt extraction and utilization in engines is worth investigation, but the costs are too indirect to be perfectly accounted for.
As it stands, Biden’s proposals regarding electric vehicles appear to be sound, but could benefit from supplemental policies. Further developing renewable energy infrastructure, especially in regions with high emissions factors, would enhance the positive environmental effects of investing in EVs. In addition, electric vehicles' size and weight significantly impact the total amount of emissions released during both production and charging; investing in research and development of lighter-weight materials or providing greater tax incentives for individuals that purchase lighter-weight vehicles could prove beneficial. Lastly, although it is expensive, investing in cobalt recycling would eliminate some indirect costs that cannot entirely be quantified. Following this prescription would almost certainly enhance the benefits of the electric vehicle investments proposed by the Biden administration.