This post also appears in the National Journal Energy & Environment Experts blog in response to the question: What should drive fuel efficiency?
At a moment when it appears to many that our government can’t do anything right, the current approach to regulating vehicle fuel economy and greenhouse gas (GHG) emissions is a bright spot.
After decades of failing to tighten corporate average fuel economy (CAFE) standards, and several years when California and other states began to take the matter of setting vehicle GHG standards into their own hands, the federal government finally got its act together. In 2007 Congress enacted the Energy Independence and Security Act of 2007, tightening CAFE. In 2010, NHTSA and the U.S. Environmental Protection Agency (EPA) jointly set GHG and CAFE standards, and California agreed to conform its rules to the federal ones. NHTSA and EPA are hard at work at a second round of standards for light duty vehicles, as well as the first-ever set of similar rules for medium and heavy duty trucks.
We now have the Congress, federal and state regulators, industry and public interest groups aligned on a policy framework that is meeting important national goals of reducing oil dependence and GHG emissions, providing regulatory consistency and certainty to the industry, and creating a climate favorable to investment and innovation.
The auto industry is responding successfully. The plug-in hybrid electric Chevy Volt won the 2011 Motor Trend Car of the Year, 2011 Green Car of the Year, and 2011 North American Car of the Year. It’s also selling well. But PHEVs are just part of the story. The Chevy Cruze and Hyundai Elantra are among the nine vehicles in the U.S. marketplace that get more than 40 miles per gallon. They were also among the 10 top-selling vehicles last month. Higher sales of fuel-efficient vehicles across the board contributed to strong sales and combined profits of nearly $5.9 billion for the three U.S. automakers in the first quarter of this year.
Higher gasoline prices are heightening consumer interest in these vehicles. But we cannot rely on oil prices alone to drive us to the next generation of vehicles. Oil prices are too volatile to motivate the sustained business investment we need. And the price we pay at the pump doesn’t reflect the true cost of oil to our country. Half of the 2010 U.S. trade deficit was from oil – that’s $256.9 billion we sent overseas last year alone. The U.S. EPA estimates that the energy security benefit of reducing oil dependence is on the order of $12 per barrel. And gasoline burning inflicts enormous damage on our air quality and climate. For example, the transportation sector is responsible for more than a quarter of U.S. GHG emissions and is a major contributor to smog.
The beauty of the fuel economy and GHG standards is that they are performance based. They set targets based on important public policy goals – i.e., oil savings and GHG reductions – but leave it to industry to find the best way to meet them. They don’t “pick winners.” They should remain the core of our public policy framework for transportation.
But our current set of vehicles and fuels may not be up to the job of meeting our long-term goals. In order to level the playing field with the incumbent technologies that have benefited from nearly a century of infrastructure development and fuel-vehicle optimization, we need to make some public investment to jumpstart alternative vehicles and fuels. This has to be done carefully. We need a savvy, adaptive strategy that ensures that any subsidies are only temporary, leverages public investment with private dollars, spawns experiments and learns from them, and rewards environmental and efficiency performance.
It is not clear whether hydrogen, natural gas, electricity, or biofuels are the long-term solution to our energy and environmental challenges. But we need to continue to keep the pressure on all of them through performance-based standards, research them all, subsidize limited deployment to see how they perform in the real world, and leave it to industry and consumers to determine their ultimate success in the marketplace.
Judi Greenwald is Vice President for Innovative Solutions
This post also appeared in the National Journal Energy & Environment Experts blog in response to a question about oil use and the future of electric vehicles.
Whether or not electric vehicles (EVs) take off will ultimately depend on consumer acceptance of new technology. But public policy and technological progress are just as important, as we highlight in our new report on the transportation sector.
Indeed, electric drive vehicles powered by batteries or hydrogen fuel cells could revolutionize transportation in the United States, saving considerable amounts of oil while also reducing the sector’s impact on our global climate. And the EVs on the market now are off to a great start, winning national and international awards.
Nearly all major automakers are planning to introduce these vehicles in the coming years, and I applaud automakers like Ford that have committed to building alternative drivetrains in significant number for the long haul. Companies like Ford understand climate change and the need to reduce our impact on our global environment while not sacrificing our mobility. For EVs to achieve that goal, we need policies like a clean energy standard that aim to decarbonize our electrical grid. I’m sure Ford is also investing in this space because they see a market opportunity.
The private sector has invested billions of dollars in developing, manufacturing, promoting, and distributing EVs in the last decade. From a map on our website, you can see that policymakers across the country are supporting EVs because they want their region to benefit from this burgeoning market.
Policymakers should rely on private capital as much as possible to build out the EV charging infrastructure so we can balance the desire to support alternative vehicles while also tackling our nation’s budget deficit. To that end, we should coordinate policy related to EV purchase and home charging nationwide so private players can enter new markets more easily. The most efficient way to “refuel” these vehicles is not yet clear, and we should use policy to help provide the foundation to let the market work.
Another element that is critical to the success of these vehicles is its most expensive component – the battery. Not only do we need aggressive R&D to develop batteries with much higher energy density, we also need to figure out what to do with these batteries at the vehicle’s end-of-life. About 80 percent of the battery’s capacity is still usable at this point, resulting in the largest untapped resource in this space today.
If we achieve the right mix of policy, technological progress, and consumer acceptance, there’s little reason to doubt that alternative vehicles will have a significant impact on the car market in this decade. It appears that it will be tough to kill the electric car this time.
Eileen Claussen is President
This post first appeared in Txchnologist.
It is too early to pick the ultimate car of the future. Plug-in electric, hydrogen fuel cell, and biofuel vehicles are currently in contention, but it is quite possible that no single alternative will dominate the future the way that gasoline-powered cars own our roads today. The competition will be fierce because these new technologies will not only be competing against each other, but also against the ever-improving internal combustion engine. By 2035, it’s quite possible a new gasoline-powered car will get 50 mpg and a hybrid-electric car (like the Toyota Prius) will achieve 75 mpg.
Whatever technologies win out, it is clear the societal costs of oil are too high. The price at the pump fails to include all the national security and environmental costs of exploration, extraction, distribution, and consumption of oil. Since oil appears cheaper to the consumer than its true cost to society, we end up consuming more than we should. We send hundreds of billions of dollars out of our economy each year – $330 billion in 2010 alone – to oil producers with monopoly power instead of investing the money here at home.
This blog post also appeared on Edmunds Auto Observer
In movies like the iconic Demolition Man, we’re led to believe the future will be filled with cars well advanced from those on the road today (in the case of the Sylvester Stallone action flick, our cars will instantly fill with foam upon a collision). But what do the real experts think about the cars we’ll be driving in the future? For example, will our cars drive themselves like Google’s modified Toyota Prius?
We answer some of these questions in our recently released report that focuses on reducing the U.S. transportation sector's greenhouse gas emissions and oil use. The report details options available to automakers for building the cars of the future. It doesn’t attempt to predict the makeup of the car market in the future – that’s up to the consumer. Instead, the report highlights that many combinations of vehicles could significantly reduce oil use and greenhouse gas emissions in the future.
There is a lot of buzz around Washington these days that plug-in electric vehicles (PEVs) are the answer to our energy security and climate problems. In the recent State of the Union, President Obama restated his goal of having 1 million PEVs on the road in the United States by 2015, and the U.S. Department of Energy (DOE) recently released a report projecting that we will meet the goal. Meanwhile, a panel I sat on for Indiana University’s School of Public and Environmental Affairs (SPEA) said the data indicates we won’t get quite that many PEVs on the road by 2015. The question is – does it matter if we precisely reach the President’s goal or not? The answer is no, so long as we are taking concrete steps towards jumpstarting PEV manufacturing and supporting infrastructure and learning from the experiences of early PEV adopters.
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.
Provisions in any legislation can be confusing. Trying to compare similar provisions across different bills can compound the confusion. To help make things more clear, we have two side-by-side comparison charts, one on energy-efficiency provisions, and the other on electric plug-in vehicle provisions, of this Congress’ energy and climate legislation.