By Patrice Douglas
December 4, 2020
With a Biden Administration set to take office in just over two months, Americans can expect to see some aggressive climate proposals coming out of the White House. But several of these proposals – whose impact on consumers and the economy are unknown– are coming from politicians outside the Oval Office.
In late September, California Governor Gavin Newsom issued an executive order announcing a ban on the sale of non-electric cars and passenger trucks by 2035. Less than a month later, New Jersey Governor Phil Murphy described an identical proposal from the NJ Department of Environmental Protection as a “call-to-action.” These initiatives, reflect a growing push for the widespread adoption of electric vehicles (EVs) by state executives eager to flaunt their environmental credentials. Despite the political appeal, these initiatives come with great costs to us as taxpayers and consumers. They are funded through incentives like tax rebates, grants to build charging stations, discounts on tolls, along with other undescribed ways that amount to taxes and fees on consumer. The economic and social challenges associated with their actualization renders these proposals premature at best and broadly detrimental and self-defeating at worst.
Widespread use of electric vehicles faces significant barriers, the first and most immediate of which is cost. EVs remain significantly more expensive than their gasoline-fueled counterparts. Proponents of phase-outs often argue that rebates and other incentives offset the comparatively higher sticker price of electric vehicles, but evidence suggests that only the financially affluent can afford the upfront costs necessary to take advantage of them. In 2016, 83% of EV tax credits were claimed by individual taxpayers with an adjusted gross income of over $100,000, which as a group represent only 17% of the US population. Until costs drop significantly, policies intended to encourage electric vehicle adoption will continue to disproportionally benefit the wealthy, while disadvantaging low and middle-income Americans. And the cost of any such financial incentive is shouldered by the taxpayer.
After the cost barrier, infrastructure requirements pose the next greatest challenge to electric vehicle mandates. The limited range of EVs, along with the low energy density of the lithium-ion batteries they use as compared to gasoline, means that charging stations will have to be installed in large volumes across restricted states. Implementing that infrastructure might be economically and logistically feasible in the cities and wealthy suburbs that Governors Newsom and Murphy call home, but it will be significantly more difficult in rural and low-income areas, further exacerbating inequalities like those demonstrated by the distribution of existing tax credits. In larger cities that are spread out over hundreds of square miles, the cost of these charging stations would be extremely high, and cost-prohibitive.
Even if charging infrastructure could be built equitably and cost-effectively, grid capacity would remain a major impediment. States that have committed to or are considering gasoline vehicle phase-outs are often the same that are pursuing forcible shifts to renewable energy sources. In states like California, where the rush to renewables has made summer blackouts all too common, the additional electricity demand caused by the replacement of millions of gasoline-powered cars with electric vehicles could push the grid to the brink. Such significant updates to the power grid would require not only decades of planning, engineering and construction, but also billions and billions of ratepayer and consumer dollars.
Ignoring these barriers and their consequences, broad electric vehicle adoption would not constitute the environmental panacea that most of its proponents expect. Many of the rare earth elements specific to EV batteries, especially lithium and cobalt, can only be obtained through pollutant-intensive mining in poorly regulated, high conflict areas which frequently exploit child labor. Moreover, electric vehicles are only as clean as the energy used to power them. Until renewable energy is cheap, reliable, and accessible enough to meet statewide energy demands, a shift to EVs will simply make the pollution associated with their usage less visible. It is important to point out renewable sources like wind and solar provide only about a combined 9 percent of American electricity generation. For these reasons, attempts to set arbitrary deadlines for gasoline vehicle sales are more about political posturing and soundbites, and less about informed environmental policymaking.
Despite these limitations, a gradual shift to electric vehicles could have measurable environmental benefits. However, it is crucial that these potential gains are viewed in the context of other energy developments. To this point, neither the adoption of electric vehicles nor renewable energy has been responsible for the bulk of emission reductions, but rather a shift from coal to natural gas and the perpetually improving efficiency of combustion engines.
By comparison, the environmental benefits associated with the Governors’ proposals yield significantly smaller benefits at far greater costs. Instead of pushing “vanity” projects, they and other climate-conscious state politicians should pursue energy plans that make the most of all available options according to their specific strengths. For example, efforts to reduce the cost of natural gas so that the electricity used by EVs can be produced affordably and in sufficient quantity would be far more conducive to their proliferation than pushing gasoline car phase-outs and renewable quotas simultaneously.
A range of legitimate options exist for modernizing energy production and transportation, but none of them entail government-imposed phase-outs on gasoline-fueled vehicles. Governors like Newsom, Murphy, and others inclined to follow their lead would do well to eschew current proposals and adopt an all-of-the-above energy strategy that generates progress through innovation and a diverse mix of energy sources and technologies. Their constituents, especially environmentalists, would ultimately have reason to be grateful.
Patrice Douglas is an attorney and former chairman of the Oklahoma Corporation Commission.