All Commentary
Friday, September 25, 2020 Leer en Español

California’s Planned Ban on Gas-Powered Auto Sales Is Great for Elon Musk, but It Won’t Help the Environment

Gov. Gavin Newsom's order could actually be worse for the environment.

Image by Thomas Hawk on Flickr (CC BY-NC 2.0)

California Gov. Gavin Newsom announced an order this week to ban the sale of new gas-powered road vehicles in the state by 2035.

CNBC reports the proposed rule would not prohibit people from driving or owning gas-powered cars, but would ban the sale of all new gasoline-powered passenger vehicles in the Golden State in an effort to reduce greenhouse gas emissions by 35 percent.

The proposed rule would make California the first state to eliminate sales of such vehicles, though several European countries, including Sweden and Denmark, have made similar commitments.

There are reasons to be skeptical of such policies, however.

Proposals to eliminate gas-powered automobiles are likely to win politicians media coverage and cheers at town hall meetings (at least in some places). But the actual environmental impact of such policies remains unclear.

It’s important to remember that CO2 emissions are not just about what comes out of vehicles, but also what goes into vehicles. Electric vehicles might not emit emissions through exhaust pipes like gas-powered cars, but they expend tremendous amounts of CO2 during their production and charging cycles, and require numerous elements—such as lithium, cobalt, and manganese—that must be mined from the earth.

While conventional wisdom says electric vehicles are more environmentally friendly and an effective tool to fight climate change, research suggests electric vehicles may have environmental costs that actually exceed those of internal combustion engines when the full cycle of production is included.

Jonathan Lesser of the Manhattan Institute, for example, has published research showing that electric vehicles are worse for the environment than modern gas-powered vehicles. Using the Energy Information Administration’s long-term forecasts for the number of electric vehicles through 2050, Lesser estimated how much electricity these vehicles would require. He then broke down the effects on three key pollutants that are regulated in the US Clean Air Act: sulfur dioxide (SO2), oxides of nitrogen (NOX), and carbon dioxide (CO2).

“What I found is that widespread adoption of electric vehicles nationwide will likely increase air pollution compared with new internal combustion vehicles. You read that right: more electric cars and trucks will mean more pollution,” Lesser wrote in Politico.

The fact is, modern gas-powered vehicles are not what your grandaddy was driving. Today’s vehicles emit very little pollution, Lesser concluded, about 1% of what they did in the 1960s.

Lesser’s findings are not isolated.

The World Economic Forum has also called attention to the “dirty secrets of electric vehicles,” which includes both adverse environmental impacts and children as young as seven working in cobalt mines in places like the Democratic Republic of the Congo, where more than half of the world’s cobalt is produced.

“[R]aw materials needed for batteries are extracted at a high human and environmental toll. This includes, for example, child labour, health and safety hazards in informal work, poverty and pollution,” the World Economic Forum’s Global Battery Alliance notes. “A recycling challenge looms over the eleven million tonnes of spent lithium-ion batteries forecast to be discarded by 2030, with few systems in place to enable reuse and recycling in a circular economy for batteries.”

Recycling is not the only environmental problem facing the lithium-ion batteries used in electric cars.

The bulk of these batteries are manufactured in places such as Japan, China, and South Korea, where generation of electricity remains heavily dependent on fossil fuels, including coal, which increases the carbon footprint of electric car batteries. For this reason, Amnesty International is calling on nations to disclose the carbon footprint of electric car batteries, so their environmental impact can be accurately assessed.

While it’s difficult to gauge the environmental costs of these batteries with precision, one German study found that every Tesla battery requires between 23,000 pounds and 32,000 pounds of carbon emissions. Considering that Tesla produced 368,000 cars in 2019 alone, that’s up to 11.8 billion pounds of carbon dioxide emissions in just Tesla batteries in a given year.

It’s unclear if Gavin Newsom truly has three Teslas—a New Yorker journalist found three in the driveway when he went to Newsom’s home in 2018 for an interview—but if he did that would put Newsom’s carbon footprint at close to 100,000 for just the Tesla batteries.

This of course is of little concern to Newsom or Tesla founder Elon Musk, who “liked” Newsom’s announcement on Twitter that California would be “phasing out the internal combustion engine.”

Of course Musk likes this news. Newsom is sidelining Tesla’s competition, which stands to increase the market share of the world’s most valuable automobile company even further. This isn’t capitalism, however, it’s crony capitalism—the use of government regulations to shift the market toward a favored company or economic sector.

As the regulatory state grows, so does the phenomenon of what economists call “rent-seeking.” It involves companies diverting resources toward lobbying efforts (versus production) that seek regulatory measures designed to hamstring their economic rivals to increase their own share of the market.

Rent-seeking is, unfortunately, often an effective business strategy. But it’s not capitalism and is unlikely to improve the environment.

The law of unintended consequences, one of the proverbial building blocks of economics, shows that actions, those undertaken by people but especially those undertaken by governments, have consequences that go far beyond their desired effects.

Many people of good faith wish to help the environment by rejecting or limiting the use of gasoline. The desired effect is lower consumption of gasoline. However, there are also unintended consequences of this action.

By restricting the use of gasoline, environmentalists increase the demand for electricity. This in turn increases the price of coal, which incentives production of coal, a fossil fuel that produces more CO2 emissions than gasoline.

The great economist Claude-Frédéric Bastiat (1801-1850), in his seminal essay “That Which is Seen, and That Which is Not Seen,” observed there was a tendency for humans to judge actions based on immediate effects (“a small present good”) while ignoring their long-term consequences (“a great evil to come”).

Bastiat said it was man’s inability to see the results of actions in their totality—the seen and the unseen—that resulted in mankind’s greatest depredations.

“This explains the fatally grievous condition of mankind,” Bastiat warned. “Ignorance surrounds its cradle: then its actions are determined by their first consequences, the only ones which, in its first stage, it can see.”

If we celebrate the decline in emissions from gas-powered vehicles but ignore the considerable environmental costs of electric vehicles, we fall into the trap Bastiat described 170 years ago.

  • Jonathan Miltimore is the Senior Creative Strategist of at the Foundation for Economic Education.