Stephen Holland: An “Incredible Variance” in EV Benefits Based on Where They Are

Recently, I spoke with Stephen Holland, Professor of Economics in the Bryan School of Business and Economics at the University of North Carolina at Greensboro about a study he was part of that was published in the December 2016 American Economic Review on electric vehicles. The study, featured in a recent post of mine, makes an argument that has been highlighted by others before and that is the environmental benefit of driving an EV is highly dependent on what kind of electricity is charging the vehicle. But they go further in this paper, looking at not only GHGs, but also air pollution, namely particulate matter.  Following are some highlights from the interview. You can listen or download the podcast below or listen to it in ITunes.

On the Study’s Key Findings:

“What we found that was really interesting is there are four kinds of places – kind of the four extremes.  I’ll illustrate those with four cities.  The first one is Los Angeles.  In Los Angeles it turns out to be really harmful to drive a gas car in Los Angeles.  Why is that?  There are a lot of people in Los Angeles.  It’s a horrible airshed.  It’s surrounded by mountains, so that pollution all gets trapped in Los Angeles and causes a lot of harm.  On the other hand, what happens when you plug in your electric car in Los Angeles?  Well, power plants respond, but many of those power plants are not in the L.A. air basin.  So there’s a winner already in getting that pollution out of those heavily populated area in the L.A. air basin.  And also, the western grid turns out to be much cleaner than, for example, the eastern.  So it turns out in our analysis that electric cars are a big winner in a place like Los Angeles.  If you add them up over the lifetime of the car, there would be about $5,000 per vehicle in environmental benefits from electric cars in Los Angeles.

 

That doesn’t hold throughout the country.  It’s useful to look at New York City.  You might think that’s similar to Los Angeles, and the gas car side turns out to be pretty similar.  Again, when you drive a gas car in New York City, it has very high damages, about the same, but a little bit lower than Los Angeles just because of all the people there who are harmed in the high level pollution already.  The difference is what happens when you plug in your electric car in New York City.  The problem is now that many of those power plants that respond are coal-fired power plants, so relatively dirty power plants; and not only that, these power plants are in locations like Pennsylvania which are also heavily populated, and some of that pollution blow straight back to them.

 

So what we find in a big city like New York City is that electric vehicles are basically a wash.  Our calculations give them a slight negative, but basically it’s a zero.  New York has high damages of both.  On the negative side if you think about a place like a city in North Dakota or in Minnesota, driving a gas car there doesn’t cause a lot of harm in our calculations, mainly because there aren’t a lot of people there and it’s relatively unpolluted already.  Whereas plugging in an electric car leads to power plants to respond.  Some of those are coal-fired power plants in Illinois.  For example, if you’re driving an electric car in North Dakota where, frankly, there aren’t a lot of electric cars, you’re potentially exporting pollution to Chicago, causing much more. So this is the main result of the paper, this incredible variance in the environmental benefits of electric cars based on where they are.”

On the “Horse Race” Between EVs and the Internal Combustion Engine Vehicle:

“I’ve heard this a bunch, too ― that we need the grid to become cleaner, we need to have people adopting [EVs].  And this is something that we’re currently really interested in working on.  So what we see, actually, is that the grid is becoming clean.  Over time there has been a lot of coal-fired power plants retiring and being replaced with gas which is much cleaner.  So the grid on average has become cleaner, and there are a lot more renewables than there were before.  The problem is, gasoline cars have also been getting cleaner.

 

One of the projects we’re kind of just starting now, which we’re very excited about, is; first of all, trying to run that horserace and see who is kind of winning in his horserace.  Is it the gas cars that are becoming cleaner, or is it electric cars?  And how close are electric cars getting to gas cars, and can we predict a crossover?  But potentially the more interesting part of that question is if we should actually be adopting these cars earlier, even though they are currently dirtier than the gas cars.  We’re having trouble getting our heads around this issue, but it does seem that there are a couple of reasons for going and doing that…”

On Consumer Purchases of EVs “Pushing” the Greening of the Grid:

“There’s this kind of feedback between adoption of electric vehicles and the cleanliness of the grid.  When I first started talking about this project, a friend said to me, “But we have to go electric because it’s the only way to get to zero.”  At least in theory, you can have zero carbon from electric vehicles, where there is no way to have zero carbon from gasoline vehicles.  There’s another dimension, though – and we don’t go into this, well, we do a little bit – on which electric vehicles can be superior to gasoline vehicles.  And we’ve kind of seen this with Volkswagen.  It’s sort of easier to monitor a small number of power plants than it is to monitor millions of tailpipes on gasoline vehicles.

 

So the fact that they are actually zero emissions at the vehicle level does have a certain advantage in that we can monitor power plants fairly easily to make sure they’re complying with emissions regulations; whereas in order to have clean gasoline vehicles, there are lots and lots of potential chinks in the chain ― or weak links in the chain.  We have to have refineries producing very clean gas, and then we have to have emission systems on cars that are properly maintained and burning that fuel cleanly.  We have to have clean fuel from start to finish.  All these things just make it a little bit more difficult for gasoline vehicles relative to electric vehicles.

 

But, again, there are huge advantages with internal combustion engines – a hundred of years experience with them.  You just can’t find a denser fuel source that’s more energy dense than gasoline.  Think about it – as you drive your gasoline car and the tank gets empty, it gets lighter so it goes farther; whereas when your electric vehicle’s battery gets empty, it’s exactly the same weight. So it’s an interesting tradeoff.”