Pricing indirect emissions accelerates low-carbon transition of US light vehicle sector

New research shows how large-scale adoption of electric vehicles due to expected technological change may not only reduce emissions from tailpipes, but also indirect emissions stemming from energy and battery production. Large-scale electric vehicle adoption can greatly reduce emissions from vehicle tailpipes. However, analysts have cautioned that it can come with increased indirect emissions from electricity and battery production that are not commonly regulated by transport policies. We combine integrated energy modeling and life cycle assessment to compare optimal policy scenarios that price emissions at the tailpipe only, versus both tailpipe and indirect emissions. Surprisingly, scenarios that also price indirect emissions exhibit higher, rather than reduced, sales of electric vehicles, while yielding lower cumulative tailpipe and indirect emissions. Expected technological change ensures that emissions from electricity and battery production are more than offset by reduced emissions of gasoline production. Given continued decarbonization of electricity supply, results show that a large-scale adoption of electric vehicles is able to reduce CO2 emissions through more channels than previously expected. Further, carbon pricing of stationary sources will also favor electric vehicles.

Automated summary

The new research suggests that large-scale adoption of electric vehicles can significantly reduce emissions from vehicle tailpipes, but may also increase indirect emissions from energy and battery production. By combining energy modeling and life cycle assessment, the study shows that pricing both tailpipe and indirect emissions can lead to higher sales of electric vehicles and lower overall emissions. Expected technological advancements are predicted to offset emissions from electricity and battery production with reduced gasoline emissions, highlighting the potential of electric vehicles to reduce CO2 emissions through multiple channels.