How One Regulatory Proposal Could Discourage EVs

Government regulations, when done right, are supposed to either prohibit bad behavior or encourage the right ones. I came across one proposal that may have it backwards. Right now, the Environmental Protection Agency, National Highway Traffic and Safety Administration and California Air Resources Board are mulling rules that would push the average car sold to a mandated 60 miles per gallon by 2025. The green lobby is pushing to include one new rule that could discourage some of the technologies that they want to see sold in greater numbers.

They want to assign electric vehicles a carbon dioxide emissions rating based how much of the greenhouse gas is generated by the power plants that supply the juice to the car. They call it “upstream emissions.” The government would measure how much electricity the car uses, calculate how much carbon dioxide is emitted while generating that power and assign that value to the car. There is a direct calculation that gets you from carbon dioxide emissions to fuel economy. If you live in an area that gets a lot of power from coal, a hybrid-electric car that burns gasoline could actually be counted as emitting less carbon dioxide and using less fuel than an EV like the Nissan Leaf, according to the American Council for an Energy Efficient Economy. That’s right. Even though the Leaf burns no gasoline and has no tailpipe, the feds would say that its greenhouse gas emissions are higher than the gas-burning hybrid.

Such a rule could discourage carmakers from selling more EVs. If environmentalists and regulators want to encourage the growth of a nascent electric-car market, this could give carmakers more credit for developing hybrids instead. It also gives the power utilities, whose power generation is creating the emissions, a free pass.

The green lobby has a reason for pushing for some kind of measure of EV emissions. The carmakers have a long history of exploiting loopholes in the law to sell more inefficient vehicles. In this case, the environmentalists are worried that the carmakers will use very low carbon dioxide emissions numbers assigned to their EVs to offset the emissions of gas hogs and sell more of them. If the government goes with a 60 mpg rule (which is 44 mpg in real-world fuel economy) they will be pushing the industry to get more efficient. If the regulations encourage more EVs, the industry will have a better chance of getting there.

Read more at BusinessWeek Automotive Blog