Note: This post is co-authored with Daniel Shawhan (Resources for the Future)

In the United States, plug-in electric vehicles (EVs) have been gaining ground on gasoline vehicles. The share of plug-in vehicle sales relative to all new vehicle sales has grown from close to zero to about five percent over the past 10 years. Some of the main factors that have been driving consumers to consider electric vehicles are the climate and air-quality benefits of the vehicles. Policymakers and vehicle manufacturers say that these benefits underpin their desire to transition from gasoline vehicles to EVs in the coming years.

So, what are the climate and air-quality benefits of EVs? Existing research hasn’t yielded a clean answer to this question. Some studies indicate that, if you’ve been driving an EV instead of an efficient gasoline vehicle, then depending on where and when you charge the battery, you might be helping or harming air quality and climate stability, because the additional pollution from the power sector might be less or more than the avoided vehicle emissions. Other studies account for an expected shift away from fossil fuels in the power sector; these studies tend to conclude that EVs will reduce pollution compared to gasoline vehicles, though under certain assumptions in these studies, EVs might increase emissions.

In our newly released study, we investigate these questions about the benefits and costs of plug-in vehicles for climate, air pollution, and health. Our analysis includes all-electric vehicles, such as the Tesla Model 3, and plug-in hybrid vehicles, such as the plug-in version of the Ford Escape, which has a gasoline engine and a large battery that can be charged from an external power source. In our study, we model the effects of policies and market conditions that increase plug-in vehicle sales, and we find that adding plug-in vehicles to the US fleet would have large benefits for local air quality and climate over the lifetimes of the vehicles.

Looking at the Data

In our analysis, we combine three models: an economic model of passenger vehicle purchases and driving, an engineering and economic model of the power sector, and an air pollution fate-and-transport model that projects how air quality will change and that yields monetary valuations of those changes.

The passenger vehicle model projects future vehicle sales, along with future emissions of carbon dioxide, sulfur dioxide, nitrogen oxides, and fine particulate matter from production and consumption of gasoline and diesel fuel through 2035.

The power sector model is the Engineering, Economic, and Environmental Electricity Simulation Tool (E4ST) and the associated detailed representation of US and Canadian electric power systems. E4ST assumes that drivers charge vehicles according to historical charging patterns and estimates the emissions of the same pollutants as the passenger vehicle model.

The air-pollution fate-and-transport model that we use is the CO-Benefits Risk Assessment Health Impacts Screening and Mapping Tool (COBRA). COBRA projects how changes in vehicle and power plant emissions will affect ground-level air pollution in every county of the United States, along with the effects on consequent premature deaths and illness. We project emissions from vehicles and the power sector that result from both fuel production and combustion. Based on these projected emissions, COBRA estimates the premature deaths and illnesses in each scenario and calculates the monetary value of these effects.

To estimate the environmental benefits of plug-in vehicles, we compare a baseline scenario with a scenario that includes economic and policy conditions that favor plug-in vehicles; that is, more ambitious policies, higher gasoline prices, and lower battery costs. Table 1 shows the estimated benefits per additional vehicle sold due to these favorable conditions. EVs yield larger climate and health benefits than plug-in hybrids because the latter use gasoline for about one-third of the miles they’re driven.

Table 1. Average Lifetime Benefits for Climate and Health Per Vehicle

We also report results for scenarios that isolate specific individual conditions that increase plug-in vehicle sales, such as lower battery costs. The average estimated net life-of-vehicle climate benefits per additional plug-in vehicle are $3,100 in the scenario with low battery costs, $34,000 in the scenario with high gasoline prices, and between $3,100 and $34,000 in the other scenarios. The average net life-of-vehicle US health benefits due to improved air quality also vary by scenario; the benefits range from $690 to $3,300 per additional plug-in vehicle. These estimated benefits are for additional plug-in vehicles sold in 2022. We use 2022 as a case-study year and estimate the outcomes of putting our scenarios in effect by then.

Additionally, we consider the sensitivity of the results to assumptions about environmental policy in the electricity sector and assumptions about the charging profiles of plug-in vehicles. Policies that reduce the average emissions rate of electricity generation can substantially increase the benefits of plug-in vehicles, but the increase in benefits is not guaranteed: the outcome depends on the design of the policy and other circumstances. This finding illustrates the importance of modeling the power sector, rather than using historical averages of emissions rates, which some studies do. As with any modeling exercise of this nature, our analysis, though sophisticated, still uses some simplifying assumptions that could be relaxed in future work.

Conclusions

Our results have several implications. First, the additional plug-in vehicles that are sold as a result of the policies and market conditions that we model (e.g., high gasoline prices) can be expected to reduce greenhouse gas emissions and local air pollution.

Second, the magnitudes of those benefits differ considerably from one policy or market condition to another. Third, in its standards for greenhouse gas emissions for passenger vehicles, the US Environmental Protection Agency (EPA) does not count greenhouse gas emissions from battery charging when crediting vehicles for compliance. This omission makes it easier for manufacturers to achieve the standards, but the method results in higher greenhouse gas emissions compared to a situation in which EPA counts those emissions. Our estimates of electricity emissions can help EPA if the agency decides to include electricity emissions in its compliance assessments and eliminate over-crediting of plug-in vehicles—which EPA has implied it may do when plug-in vehicle market shares increase.

This post also appears on Resources for the Future’s Common Resources blog.