NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Emissions, Electric Cars, and Other Pollution-Control Policies

Moving to increased use of PEVs may not reduce CO2 because of local variation in daily, and even hourly, patterns of electricity production and consumption.

The policy goal of reducing CO2 and other emissions from the transportation sector has led to interest in plug-in electric vehicles (PEVs). The United Kingdom has made electric cars an important part of its overall efforts to reduce carbon-dioxide emissions. In California, policymakers have required manufacturers to offer PEVs for sale as part of its own overall climate-change measures. Elsewhere in the United States, the federal government and other state governments offer an array of financial incentives to promote electric cars, including tax credits for consumers.

PEVs shift the energy consumption associated with transportation toward centrally-generated electrical power and away from engines in individual vehicles, leading to more efficient energy consumption. But power plants also have emissions. In fact, electric power plants, particularly those that burn coal, are an important source of carbon-dioxide emissions, accounting for example for more than 40 percent of domestic CO2 emissions in the United States.

How greater use of PEVs would affect CO2 emissions in the United States depends critically on the way that the electricity used to charge the batteries in these cars is generated. In Spatial and Temporal Heterogeneity of Marginal Emissions: Implications for Electric Cars and Other Electricity-Shifting Policies (NBER Working Paper No. 18462), Joshua Graff Zivin, Matthew Kotchen, and Erin Mansur conclude that "electricity shifting" policies, such as moving to increased use of PEVs, may not reduce CO2 because of local variation in daily, and even hourly, patterns of electricity production and consumption. The analysis is complicated by the fact that electric power is often transmitted across long distances through power lines, so that the CO2 emissions associated with charging a PEV in one state may be located in another.

Using data from the U.S. Environmental Protection Agency, the Energy Information Administration, the Federal Energy Regulatory Commission, and other sources, the authors analyze energy use and emissions over a three-year period, from 2007 through 2009. They track energy production and consumption by the hour of the day within different regions. They conclude that on net, in the western United States and in Texas, driving PEVs would result in lower carbon-dioxide emissions than driving fuel-efficient hybrid cars. But in other regions, such as the upper Midwest, where the fuel mix for electricity generation is more heavily tilted toward coal, the charging of PEV batteries during the recommended hours of midnight to 4 AM could result in more emissions than those associated with the average car now on the road. "Underlying this result is a fundamental tension between load management of electricity and achieving environmental goals," the authors conclude. "The hours when electricity is the least expensive to produce tend to be the hours with the greatest emissions."

--Jay Fitzgerald

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