Zero Emission Vehicles:A Dirty Little SecretHoward GruenspechtCalifornia’s decision to mandate the sale of zero-emissions vehicles (ZEVs) as a means ofimproving air quality in the state looked like a clear victory for the environment. However,technology breakthroughs have proven elusive, resulting in ZEVs with high costs and poorperformance. If the costs of producing ZEVs and subsidizing their purchase are spreadacross California’s new car market, consumers are likely to respond to the price increasesby holding onto their older vehicles, which have much higher emissions rates. Even a smallincrease in their use will generate extra emissions that will more than offset emissions reductions from ZEVs.Even though California no longer holds the undis-puted title for the worst air pollution in the UnitedStates, many areas within the state still exceed fed-eral and state air quality standards. As policymakers inCalifornia seek effective ways to improve air quality, goodintentions have occasionally resulted in some deeplyflawed programs. The state’s mandate for the sale of zero-emissions vehicles (ZEVs), now scheduled to take effectin the 2003 model year, falls into this category. It repre-sents a triumph of environmental symbolism overenvironmental substance that will increase rather thanreduce emissions while imposing substantial costs on Cal-ifornia consumers. Noting that vehicles generated approximately half ofall smog-forming pollutants in California, the CaliforniaAir Resources Board (CARB) in 1990 adopted a require-ment that car companies include ZEVs in their Californiasales mix beginning in 1998. The requirement mandatedthat ZEVs should comprise 2% of all vehicle sales start-ing in 1998, rising to 10% of sales in 2003 and there-after. At the time of CARB’s decision, it was widelyexpected that ZEVs would run on battery power, althoughother possible zero-emissions systems were not explic-itly ruled out. Despite large-scale research and development (R&D)funded by government and private sources, the tech-nological challenges to the deployment of batteries withsufficient performance to make electric vehicles reason-able substitutes for conventionally powered cars provedto be insurmountable. Recognizing that workable zero-emission propulsion systems would not be available in1998, CARB in 1996 delayed implementation of its ZEVmandate until 2003. Major automakers agreed to con-tinue R&D activities and to maintain limited distributionof prototype ZEV vehicles within California. In 1998,CARB reduced the mandate for “true” ZEVs to 4% byadopting provisions that allowed manufacturers to useextremely clean advanced-technology vehicles, referredWINTER 2001 / ISSUE 142 RESOURCES 7RESOURCES FOR THE FUTUREto as “partial ZEVs,” to meet up to 6% of the overall 10%requirement. Over the last several years, R&D efforts have made signifi-cant progress in reducing emissions from conventional vehiclesthrough the design and initial production of fuel-efficient hybridvehicles and the development of fuel-cell technologies. (Thesetechnologies could eventually provide viable ZEVs after costreductions and the development of a hydrogen-refueling infra-structure.) However, although the car companies have followedthrough on their commitments to CARB, battery technologybreakthroughs remained elusive. For example, at a recent envi-ronmental technology seminar, Toyota Senior Vice PresidentJim Wilson said that, despite years of research, an electric vehi-cle would still cost $20,000 more to build than a comparablegasoline-powered car. CARB staff esti-mates a cost premium of between $8,000and $20,000 for production of an electricZEV with performance characteristics infe-rior to those of a conventional vehicle. Notwithstanding the continuing short-comings of ZEV technology, CARB votedunanimously in September 2000 to reaf-firm the ZEV mandate. Unless currentrules are revised, between 4%–10% of allcars, minivans, pickups, and sport-utilityvehicles sold by the major car companiesin California starting in model year 2003must run on battery power. At first glance,CARB’s decision would appear to repre-sent a victory for the environment over themanufacturers and dealers of conventionalcars and trucks. A closer look, however, reveals a dirty littlesecret—the mandate will make the air in California dirtier ratherthan cleaner for the foreseeable future.Why the ZEV Program Will Increase EmissionsThe electric car requirement will slightly reduce emissions fromthe average new car sold in California. However, the programwill also raise the prices of both electric and non-electric newcars sold in the state as companies seek to recover the costs ofdeveloping and producing electric vehicles and the subsidiesneeded to get consumers to buy them. It is the economicresponse of Californians to these higher prices that will turnCARB’s good intentions into extra tons of emissions. Californi-ans are likely to purchase fewer new cars and to continue driv-ing their old cars longer. If the cost of producing electric cars, as estimated by CARB,is spread across the entire new car sales base in California, pre-vious experience with the consumer response to higher new carprices suggests that total new car purchases will fall by 2%–3%,with an offsetting increase in the retention of older cars in thefleet. While the consumer response is small in terms of num-bers of vehicles, the emissions impacts will be substantial,because old cars have much higher emission rates than new ones.Yet a recent CARB staff analysis, which suggests that the ZEVprogram will very modestly reduce emissions from the vehiclefleet, simply ignores this consumer response and its emissionsimplications. Once this response is properly taken into account,CARB’s own emissions models suggest thatthe emissions increase resulting from moreintensive use of older cars will overwhelmthe expected emissions reductions fromnew ZEVs. Let’s look at the numbers. CARB’s ownemissions model projects that in 2010,cars and light trucks manufactured beforemodel year 2003 will emit about 20 timesas much reactive organic gases (ROG) and10 times as much nitrogen oxides (NOx)as the fleet of 2003 and newer vehicles.According to CARB’s most optimistic sce-nario, by 2010 the ZEV program could cuttotal emissions of ROG and NOxfrom carsmanufactured after model year 2002 byroughly 10%. However, the new car fleetis already very clean, so this is only a small reduction in tons