EVs alone can’t solve climate change

Arresting climate change requires, among other things, the widespread adoption of electric vehicles. But managing the transition from gas-powered cars won’t be easy. President Joe Biden’s administration has proposed new rules to sharply limit tailpipe emissions, with the aim of compelling automakers to devote at least two-thirds of new sales to EVs within the next decade. For this policy to work, the government will have to get a lot of other things right.

The logic behind the plan is straightforward: To eliminate carbon emissions by 2050, the US needs to slash pollution from cars and trucks. Getting more electric vehicles on the road will help. But without supporting policies, EVs are unlikely to cut carbon emissions as much as advocates envision. Policymakers owe the public an honest accounting of costs and benefits. Worldwide, EVs account for 13% of new car sales, up from 0.2% a decade ago. Their market share in the US has nearly doubled over the last year, to 5.8%, thanks in part to federal tax credits of $7,500 included in the Inflation Reduction Act. Biden’s new regulations aim to accelerate the transition, by lowering the cap on carbon emissions for new vehicles by 56% between 2026 and 2032. For automakers to meet the tougher standards, 67% of their sales would have to come from zero-emission EVs. The administration projects that this will reduce the US’s carbon footprint by 7.3 billion tons by 2055, the equivalent of eliminating four years’ worth of transportation-related emissions.


Such goals are laudable, but as things stand it’s doubtful that the US can achieve them. Generous subsidies have juiced demand for EVs, but maintaining them will be costly. The average price of a new EV is still $12,000 higher than that of a gas guzzler. Experts project that it may reach parity as early as this year, but even then, Americans are unlikely to abandon their gas-powered cars if the battery-charging infrastructure remains inadequate. Note too that EV buyers don’t typically stop driving their other cars: Current EV owners have an average of 2.7 vehicles, compared to 2.1 among all households, and two-thirds use their gas-powered vehicles more often.

Other factors will also complicate the transition. The auto industry’s rapid shift to EVs at the expense of new and more efficient gas-powered models might cause some consumers to keep driving dirtier vehicles longer than they otherwise would. Electric vehicles also create carbon footprints of their own, once one accounts for the mineral extraction needed to assemble their batteries and the electricity needed to power them.

Ideally, an economy-wide tax on carbon emissions should be part of the mix. This would raise the price of gasoline and encourage consumers to buy clean-energy cars while driving their older, dirtier models less. Crucially, it would also promote energy efficiency more broadly and accelerate efforts to decarbonize the supply of electricity. Granted, building political support in the US for a carbon tax is challenging. Until that changes, the government can still incentivize low-carbon transportation more effectively — by extending tax credits to gas-powered hybrids and imposing congestion charges on high-polluting cars in urban areas, for example.

Fighting climate change requires a comprehensive and coherent strategy. EVs are part of the answer, but only part. Much hard work remains to be done.

— Bloomberg Opinion

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