Werner's Blog — Opinion, Analysis, Commentary
Where in the United States is driving an electric vehicle environmentally beneficial?

The United States is about to introduce generous incentives for purchasing electric vehicles. The Biden Administration's "Build Back Better" legislation passed the House of Representatives on November 19, 2021. One of the provisions aims to raise the share of electric vehicles to at least 50 percent of vehicle sales by 2030. Controversially, it also has a provision for a $12,500 tax credit for US-made union-made vehicles, while most other EVs only receive a $7,500 incentive. This provision has raised alarm bells in Ottawa: Canada urged Biden to drop a 'Buy American' idea. In addition to the concerns about international trade and US obligations under the new Canada-US-Mexico Agreement (CUSMA), the uniformity of the tax credits across the United States is an environmental problem.

‘Electricity is much cleaner in the West than the East of the United States.’

An influential research paper by Stephen Holland, Erin Mansur, Nicholas Muller, and Andrew Yates in the American Economic Review in 2016 asked the question: Are There Environmental Benefits from Driving Electric Vehicles? and pointed to the importance of local factors. Large parts of the United States still rely heavily on coal to generate electricity, and this means that electricity is far from clean. Generally speaking, electricity in the Western Interconnection is much cleaner than electricity in the Eastern Interconnection.

A simple back-of-the-envelope calculation illustrates how clean an electricity grid has to be before driving an electric vehicle produces less carbon dioxide than driving an internal combustion engine vehicle. Consider a typical car that uses 9.4 liters of gasoline per 100 kilometers. Consuming one liter of gasoline produces 2.3 kilograms of carbon dioxide. Driving 100 kilometers thus generates about 21.62 kilograms of CO2. Driving an electric vehicle under real conditions (using heating and other functions) requires about 25 kilowatthours (kWh) per 100 kilometers. If electricity generation emits 300 kilograms of CO2 per MegaWatthour (MWh), then driving 100 kilometers with an electric vehicle emits 5.7 kilograms of carbon dioxide. The EV beats the internal combustion vehicle.

If the typical gasoline vehicle emits 21.62 kg(CO2)/100km, parity with electric vehicles is reached when 25 kWh/100km times [x] kg(CO2)/kWh equals 21.62 kg(CO2)/100km. This means CO2 parity is reached at 865 kg(CO2)/MWh. But parity simply means that emissions are equal, so there is no environmental gain. To realize significant environmental gains, CO2 emissions per MegaWatthour must be much less than parity.

‘In many U.S. states, driving an EV will not or only marginally reduce CO2 emissions.’

So where exactly is driving an electric vehicle guilt-free in the United States? The State Electricity Profiles from the US Energy Information Administration show emission intensities for the generators in each state. Unsurprisingly, British Columbia's neighobur Washington State is near the top of the list, only surpassed by Vermont. Both rely on hydroelectricity. The chart below ranks all fifty states and the District of Columbia in ascending order of emission intensity. The worst states are Missouri, Kentucky, West Virginia, and Wyoming.

CO2 Intensity of Electricity Generation by US State 0 100 200 300 400 500 600 700 800 900 kg CO2 per MWh Vermont 3.63 Washington 103 New Hampshire 105 Idaho 125 Oregon 147 South Dakota 166 Maine 182 New York 206 California 225 South Carolina 234 New Jersey 244 Connecticut 247 Illinois 274 Maryland 283 Virginia 308 North Carolina 308 Oklahoma 313 Pennsylvania 313 Alabama 325 Arizona 326 Georgia 331 Nevada 333 Iowa 354 Minnesota 370 Kansas 372 Rhode Island 376 Florida 385 Mississippi 401 Texas 427 Arkansas 429 Massachusetts 436 Louisiana 440 Montana 445 Michigan 498 Delaware 511 D.C. 534 Colorado 536 Wisconsin 539 New Mexico 546 Alaska 550 Ohio 554 Nebraska 567 North Dakota 649 Hawaii 705 Utah 708 Indiana 718 Missouri 744 Kentucky 782 West Virginia 872 Wyoming 892

Some caveats apply to the above calculations. First, upstream emissions from fossil fuel production and other intermediate goods (such as mining for producing lithium and other metals and minerals used in lithium-ion batteries) are not included. Second, burning coal also produces local pollution from other types of emissions, Third, driving internal combustion vehicles in urban areas leads to local pollution concentrations and concentrated harm. Fourth, electric vehicles and internal combustion vehicles have a wide range of fuel economy, and thus it matters which type of internal combustion engine vehicle is replace with what type of electric vehicle. Fifth, as the aforementioned research paper found, using a kWh of electricity in any location has repercussions throughout the entire electricity grid, and thus there are large transboundary effects. This leads to a strong averaging effect across the entire interconnections. Perhaps a more meaningful way is then to look at emission averages across interconnections, not individual states.

‘The new EV subsidies in the U.S. may help U.S. automakers more than they hep the global environment.’

The bottom line still paints an encouraging picture, though. Even the most CO2-intensive states in the U.S. are close to parity. So at least driving an electric vehicle isn't making things noticeable worse, although not noticeably better either. Subsidizing EV adoption in the marginal states makes little sense. Subsidies for EVs should be proportional to the reduction in carbon dioxide emissions, and this should vary by location. Of course, EV subsidies are a second-best policy, as the first-best policy would be to impose a carbon price. The US Congress is unable to pass any meaningful climate legislation, and instead has resorted to subsidies that distort incentives. Still, the new legislation is much better than the absence of any climate policy under the previous US administration. Yet the use of EV subsidies could be much better targeted. As it stands, the EV subsidies to made-in-America EVs come across more as a subsidy to US automakers than smart climate policy.

Posted on Sunday, November 21, 2021 at 15:15 — #US | #Environment | #Transportation
© 2021  Prof. Werner Antweiler, University of British Columbia.
[Sauder School of Business] [The University of British Columbia]