In our previous posts, I described some of the benefits to national security and the environment with the use of plug-in electric vehicles (PEVs). This final post takes a look at what is often the most important issue to Americans: their wallets. PEVs are not cost-competitive with conventional vehicles in most situations yet, but there are some considerations that could be compelling for consumers to consider this winter when the first PEVs hit the market.
Last week, I discussed why consuming oil is bad for U.S. national security. In this post, I’ll look at another reason to consider a plug-in electric vehicle (PEV) – helping the environment. I’ve previously explored the effect PEVs will have on greenhouse gas (GHG) emissions. It is clear that PEVs have the potential to reduce GHG emissions significantly so long as society also reduces the carbon intensity of the electrical grid. But the environmental benefits of PEVs are not limited to climate change.
Figure 2: It's hard to see through all the smog, but that’s the Brooklyn Bridge in NYC in 1988. (Source)
PEVs also benefit local air quality, which might matter a lot if you live in a city with poor air quality. Despite enormous strides in the U.S. to reduce air pollution, the EPA estimated in February of this year that nearly 127 million Americans live in areas where air quality concentrations are above the National Ambient Air Quality Standards (NAAQS). The Clean Air Act requires the EPA to establish and periodically update and evaluate the NAAQS. While air quality has improved significantly since 1990, nearly half of Americans still face air quality-related health risks, including decreased lung function, aggravated asthma, and premature mortality.
Air pollution primarily comes from stationary fuel combustion, industrial processes, and vehicles. Transportation mainly contributes to two air pollution problems: ground-level ozone and particle pollution. Particle pollution or particulate matter (PM) consists of solid particles and liquid droplets in the air; coal fired power plants, as well as diesel vehicles including cars, trucks, and buses, are some of the sources of PM. Ground-level ozone, a serious air pollutant also known as smog, results when sunlight reacts with oxides of nitrogen (NOx) and volatile organic compounds (which are components, for example, of vehicle exhaust).
The health effects of air pollution include decreased lung function, respiratory infection, and even increased risk of heart attacks and strokes under certain conditions. While the U.S. EPA and state governments are moving ahead with regulations that improve the air quality for Americans, most people (especially in urban areas) remain at risk of effects from excessive ozone and PM. The American Lung Association recommends the EPA reduce air pollution from vehicle tailpipes. One way consumers can help is by purchasing vehicles with lower tailpipe emissions such as PEVs.
The more miles Americans travel in passenger vehicles powered by electric motors, the more local air quality will improve according to a study completed by the Electric Power Research Institute (EPRI) and the National Resources Defense Council (NRDC). It is difficult to quantify air quality benefits from using PEVs since air pollution can come from multiple sources, including vehicle tailpipes as well as power plants. All-electric vehicles in cities will almost certainly improve local air quality since a mile traveled that is powered by electricity does not produce any vehicle emissions and the power plants that produce the electricity are often located away from city centers. For plug-in hybrid electric vehicles, those improvements are tempered by the percentage of miles that rely on the gasoline or diesel-powered backup energy source rather than by the batteries. In fact, using PEVs can result in more local air pollution at the electricity generation source, especially if the source is a coal power plant. This potential problem underscores another reason (in addition to the goal of reducing GHG emissions) that we should work on reducing power plant pollution as we green the vehicle fleet.
PEVs will not end air pollution in the United States, but increasing the market penetration of these vehicles will help reduce air pollution in cities throughout the country. In the next post, I’ll look into how the financial numbers might work out with a PEV for your next vehicle purchase.
Nick Nigro is a Solutions Fellow
Though it is unlikely that the first generation of plug-in electric vehicles (PEVs) will be adopted by the masses, there is a compelling case for everyday consumers to take a look at these vehicles when they become available this winter. There is no silver bullet to solving climate change, but PEVs could play an important role as one of a broader set of solutions. As is the case for many climate solutions, the benefits from PEVs are more than environmental. In this three part series, I’ll make the case for PEVs based on the gamut of issues that matter to Americans – national security, the environment, and their wallets.
This post was written with Cynthia J. Burbank, National Planning and Environment Practice Leader at Parsons Brinckerhoff. It first appeared in the National Journal Transportation Experts Blog in response to the question: What should transportation departments do for electric cars?
The call for the government to act to promote plug-in electric vehicles (PEVs), and all clean alternative fuels for that matter, is to correct the clear market failures that exist in today’s petroleum-based transportation sector.
Historically, petroleum has been a key driver in the growth of the economy and development of nations worldwide. Gasoline and diesel fuel’s impressive energy density, portability, and low production cost made it the fuel of choice for nearly a century. All the while there have been costs, although they haven’t always been obvious. Petroleum’s impact on climate change and U.S. energy security, and the risks of drilling, result in real and significant costs to society, and currently the price of petroleum does not include those externalities.
Through a recently signed Presidential Memorandum, Barack Obama is continuing the push to regulate greenhouse gas emissions from the transportation sector using its authorities under the Clean Air Act (CAA) and the Energy Independence and Security Act of 2007 (EISA). While the memorandum includes provisions for passenger cars, light-duty trucks, and support of an electric vehicle charging infrastructure, the most notable component involves vehicles that have eluded fuel efficiency regulators.
When it comes to GHG emissions and the transportation sector, the elephant in the room has been medium- and heavy-duty vehicles (freight trucks). The recently released memorandum will bring these vehicles under the regulatory umbrella and increase the likelihood that the transportation sector will contribute its share to economy-wide GHG emission reductions.
Previous posts in this series discussed how the demand for electricity from plug-in electric vehicles (PEVs) would affect the grid as well as a potential problem related to clustering. This final post describes an opportunity for these vehicles to help increase the stability of the grid and hold down utility rates for consumers. As a reminder, a PEV is either an all-electric vehicle (EV) or a plug-in hybrid electric vehicle (PHEV).
In our previous post in this series, we provided evidence that the existing electrical grid has enough spare capacity to accommodate plenty of plug-in electric vehicles (PEVs), if the right incentives are put in place. In this post, we will discuss a technical problem that has its roots in social behavior.
The transition from traditional powered vehicles to electric vehicles will not be without its hiccups. While the aggregate impact of PEVs on the grid is likely moderate, one concern is clustering, which can be thought of as the realization of the famous comic strip Keeping up with the Joneses. If people buy what their neighbors have, this could lead to a clustering of PEVs in certain neighborhoods which might place excessive demand on local areas of the grid.
One of the main concerns over the electrification of vehicles is their impact on the electrical grid. Will they lead to power outages due to the increased demand in certain areas? Will a marked increase in electricity demand raise prices for consumers who don’t own a plug-in hybrid electric vehicle (PHEV) or an all-electric vehicle (EV)? In a series of blog posts, we’ll take a look at a claim from some utilities that vehicle electrification could actually help improve the stability of the grid while keeping costs low through a process called frequency regulation.
In this post, we’ll try to answer the capacity question. In order to determine whether the grid has the capacity to handle the influx of Plug-in Electric Vehicles (PEVs or PHEVs/EVs), utilities must estimate at what time of day these vehicles will demand power from the grid and how many of them the grid can charge at a time without causing power disruptions.
We recently released a report that describes the petroleum sector from production to consumption and examines options for including greenhouse gas (GHG) emissions from petroleum use under climate policy (e.g., GHG cap and trade). Currently, policymakers are considering multiple approaches for coverage of petroleum under comprehensive climate and energy legislation. In deciding how to address a sector of the economy or a particular fuel, policymakers must balance the goals of ensuring maximum coverage of emissions, minimizing administrative complexity and burden, avoiding creating perverse incentives or market distortions, and promoting emission reductions.
While the details of the Kerry-Graham-Lieberman climate and energy proposal in the Senate are yet to be released, press reports indicate that the trio is likely to adopt a new approach to covering transportation fuels—the so-called “linked fee.” Unlike other proposals in the House or Senate, the Kerry-Graham-Lieberman approach would reportedly levy a “carbon fee” on transportation fuels with the fee amount linked to the carbon price from a GHG cap-and-trade program covering at least electric utilities. The forthcoming details of how the “carbon fee” is linked to the cap-and-trade market will determine whether such an approach can lead to significant emissions reductions from transportation and whether such an approach can yield the economy-wide emissions reductions needed to protect the climate.
Our new report includes information relevant to the linked-fee approach. For example, the report calculates that about 80 percent of combustion emissions from petroleum use are attributable to transportation fuels that are already subject to federal fuel excise taxes. Untaxed transportation fuels and large and small stationary combustion sources account for the remainder of emissions from petroleum use. This means that a linked fee could be implemented at least in part by covering the same entities that currently pay the fuel tax.
Another Senate proposal, the Cantwell-Collins Carbon Limits and Energy for America's Renewal (CLEAR) Act, creates an economy-wide cap-and-trade program—in this case just covering CO2 emissions from fossil fuel use. The CLEAR Act adopts an entirely “upstream” point of regulation that would make “first sellers” (i.e., coal mine and natural gas and oil well owners) responsible for surrendering cap-and-trade allowances for end-use emissions from the fossil fuels they sell. As the new Pew Center report explains, there are about a half million oil wells in the United States. Of the nearly 14,000 domestic well operators tracked by the U.S. Energy Information Administration (EIA), the 10 largest (e.g., BP, Chevron) account for about half of total production, and the 670 largest account for about 90 percent of production.
The House-passed comprehensive climate and energy bill (H.R. 2454, the Waxman-Markey American Clean Energy and Security Act of 2009) also included an economy-wide GHG cap-and-trade program. Waxman-Markey, however, would require petroleum refiners and importers to surrender cap-and-trade allowances equal to the GHG emissions from the final end use of their products (e.g., tailpipe emissions from vehicles). This point of regulation for petroleum would achieve complete coverage of combustion emissions and regulate a small number of entities and facilities (about 150 refiners with 67 different owners and a larger number of importers and points of entry). Of note, Waxman-Markey adopted different points of regulation for different emission sources--including large sources (e.g., coal and natural gas power plants and industrial sources) and local natural gas distribution companies (residential, commercial, and small industrial natural gas users).
With different proposals in play, our new report can inform policymakers and others considering options for reducing GHG emissions from petroleum use and help advance approaches that balance the goals of emissions coverage, administrative ease, and cost-effective and significant emission reductions.
Steve Caldwell is a Technology and Policy Fellow
The federal government took the opportunity on April Fool’s Day to show the world the United States is not joking about its commitment to reducing greenhouse gas (GHG) emissions. The U.S. EPA and U.S. DOT have jointly produced a standard that will reduce CO2 emissions by 1 billion metric tons over the lifetime of vehicles covered and on average save consumers around $3,000 in fuel costs over the life of each vehicle purchased in 2016. The new rule requires the corporate average fuel economy (CAFE) for new passenger cars and light-duty trucks to be 35.5 miles per gallon by 2016. It will also limit carbon dioxide emitted from those vehicles to 250 grams per mile on average. The vehicle emissions rule shows how one policy can achieve multiple goals – reduce our dependence on foreign oil and reduce our nation’s GHG emissions.
The implementation of this regulation is a nod to complementary policies that combat climate change. As an organization that has long pushed for a comprehensive market-based mechanism, we are acutely aware of the importance of pricing carbon. However, putting a modest price on carbon, by itself, would not significantly reduce greenhouse gas emissions from this sector. For example, EPA’s analysis of the House-passed climate and energy bill found that the bill would cause the price of a gallon of gasoline to only rise by $0.13 in 2015, $0.25 in 2030, and $0.69 in 2050. The rule finalized Thursday addresses this problem directly by setting an increasingly more stringent standard for reducing GHG emissions but allowing vehicle manufacturers the flexibility to find the most cost-effective technologies to achieve those standards.
In evaluating regulations like these, one important factor to consider is coverage. The new vehicle rule covers over 60 percent of greenhouse gas emissions from the transportation sector. Other sources of emissions in transportation such as aviation, ships, and heavy-duty trucks will require additional actions (see our paper on aviation and marine transportation). EPA has announced its intent to propose GHG standards for heavy duty trucks in June of this year.
Another important factor to consider when evaluating regulations is cost. In order to meet the new standards, vehicle manufacturers will have to make fuel efficiency (as opposed to increased engine horsepower) one of their primary areas of focus for research and development. In doing so, future vehicles will cost more than they would without this rule. However, fuel savings over time will more than make up for that additional upfront cost.
The program is estimated to conserve 1.8 billion barrels of oil over the lifetime of vehicles covered under the rule. Reducing our overall oil consumption can reduce our reliance on foreign oil, which can translate into cost savings. A study by the U.S. EPA and the Oak Ridge National Laboratory estimated that a reduction of U.S. imported oil results in a total energy security benefit of $12.38 per barrel of oil, in part by reducing defense spending. Co-benefits like these are an important part of determining the worthiness of a policy. In the case of the new vehicle rule, the U.S. has taken a big step towards reducing its oil dependency and increasing its energy security.
Nick Nigro is a Solutions Fellow