OPINION: Subsidizing electric vehicles creates unintended consequences that harm the environment.
The Issue: There is a growing consensus that electric vehicles are the way to achieve steep transportation emissions reductions. As of late 2020, 17 national governments world-wide have declared an intention to phase out gasoline passenger cars altogether, and 10 U.S. states have articulated a similar goal.
The Facts: The pollution footprint of electric vehicles is determined by how the electricity that powers them is generated. In the U.S., 60% of electricity production is from burning fossil fuels . Moreover, coal and gas generation are likely to be “on the margin” in most of the U.S.—that is, when an electric vehicle is plugged in, coal and gas are the primary fuel sources generating that charge.
The transition to a renewable electricity grid is still in its early stages, and barriers remain. While some consider a transition to 100% renewables within reach, others point to the technological advancements still required. As widespread power outages in California in 2020 and Texas in 2021 demonstrate, maintaining a reliable electricity grid is already a challenge.
We also find that, on average, households do not give up their gasoline car when they purchase an electric vehicle—the EV is an “extra” car 98% of the time. In contrast, when households buy a gasoline car, it replaces another car in four out of 10 cases . If miles driven in electric vehicles are not displacing gasoline miles, that matters for carbon reduction.
In short, the “right” carbon price produces incentives that align private decisions with environmental protection.
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