If All Vehicles Go Electric, That’s Just Step One

(Bloomberg Opinion) -- Many of the headlines coming out of Detroit this week during the North American International Auto Show will be about electric vehicles – from new electric concept vehicles from Nissan and Infiniti to an emerging partnership between Ford and VW on electric and autonomous vehicles. By all means, environmentalists and others should celebrate progress in bringing more EVs to market.  But they should not assume such progress absolves the world from working hard on other fronts to reduce greenhouse gas emissions. When I speak about energy, I find too many people in my audiences putting far too much hope in the lone measure of phasing out petro-powered cars.

There’s a particular psychological phenomenon at work here: All humans tend to focus on one or two solutions to incredibly complex problems. Robert Jervis, a political science professor at Columbia University, writes about how the brain can account for only a limited number of factors in considering any particular phenomenon. As a result, each of us tends to fixate on a small number of facets, and to give priority to the ones we understand.

So it makes sense that so many people have a tendency to focus intensely on electric cars as the antidote to climate change.  Unlike many other technologies that could prove significant – such as cleaner energy production from fusion, or carbon capture and storage to reduce existing greenhouse gas – even the nonscientists among us instantly grasp the idea of driving a car powered without oil.  Moreover, the intuition is correct in many ways: In the U.S., as in many other countries, the transportation sector generates more greenhouse gas emissions than any other sector. And over 90 percent of the fuel used in transportation is petroleum based. It therefore seems – and is – logical that if we can wean our own cars and trucks off of oil, our climate prospects will be dramatically improved.

There are, of course, some important details. The first is that much of the reduction in carbon emissions in an EV-friendly scenario comes about not just from the switch from running vehicles on oil to electricity. It also results from decarbonizing the electricity grid – moving away from coal and natural gas to alternative forms of energy such as nuclear, solar and wind to generate electricity. Right now, more than a quarter of U.S. emissions come from the electricity sector. The advent of EVs and grid decarbonization must come together for maximum impact on carbon emissions.  EVs running on electricity produced from coal is hardly a step in the right direction.

This fact is explained in a recent report produced by the  International Energy Agency called Global EV Outlook. When comparing scenarios with different EV adoption rates and grid decarbonization standards, it finds that, at a global level, moving the grid to low-carbon energy sources can more than double the emissions reductions that come from the simple electrification of road transport.

That reality does not seem like too much a splash of cold water for the EV advocates. After all, it is in the power sector that renewables are making the most progress. Renewables are now the fastest-growing energy source; according to the U.S. Energy Information Administration, nearly two-thirds of the capacity added in the U.S. power sector for 2019 will be from wind and solar. But we can’t be complacent. The uncomfortable fact is that while renewables are meeting much of the growth in global demand for electricity and the share of coal in electricity generation has declined, the absolute amount of coal consumed in the world has remained virtually constant.

It is, however, only when we dig deeper into the numbers that we realize the importance of guarding against that all-so-human tendency to fixate on electric vehicles and see them as the Holy Grail of mitigating climate change.

In many ways, the global growth of EVs on the road from one million in 2015 to two million in 2017 to over three million in 2018 is impressive, even in the context of approximately 1.3 billion vehicles in the world. However, even some of the most ambitious projections for global EV market penetration suggest it will be decades before EVs account for even half the market. In a scenario that the IEA identifies as ambitious and dependent on many policy and technological advances, the stock of electric vehicles only reaches 228 million by 2030, a number the agency expects will amount a 30 percent market share. Bloomberg NEF, formerly New Energy Finance, forecasts that by 2040, there will be “559 million EVs on the road” and “55% of all new car sales and 33% of the global fleet will be electric.” Again, having two-thirds of the cars on the road be guzzling gasoline in 21 years does not sound like adequate progress – even if we acknowledge that the uptake of EVs will continue beyond these dates.

But let’s be real optimists and assume that many of the obstacles to more rapid EV penetration – such as infrastructure – are overcome more quickly than even those ambitious scenarios project. Let’s imagine that all the world’s cars and trucks become completely electric in the coming decades. And our electricity grids go completely carbon free. Surely our climate problems would be solved?

Not quite. Even if all passenger transport and road freight were electrified, approximately half of the world’s consumption of oil would remain untouched. Some of this remaining oil use would fuel aviation and shipping, but nearly a third would feed the global petrochemicals sector. That sector is booming, churning out more plastics, fertilizers, tires, detergents, medical equipment and clothing than ever before. Petrochemicals are the third-largest industrial emitter of greenhouse gases.

The growth in petrochemicals is quietly poised to continue. Last autumn, the IEA released another report, this one offers a variety of scenarios, including its reference one, in which plastics become more central to oil demand growth than road passenger transport by 2050. Fatih Birol, the executive director of the agency, was blunt: “When we look at the years to come, the petrochemical sector is by far the largest driver of global oil demand growth, much higher than cars, much higher than trucks, aviation, and shipping.” As would follow, the report predicted that carbon emissions from the petrochemicals sector – led by growth in the production of plastics – would increase by 20 percent by 2030 and 30 percent by 2050.

After 2018 delivered so much sobering news about climate change, we should be entitled to applaud the advance of technology that will be on display in Detroit this week. At the same time, we need to be conscious of our human tendency to focus on one or two factors when tackling a complex problem like climate change. We cannot hope or assume that the march of progress in electric vehicles (even it if exceeds the most optimistic projections) will be sufficient to bend the emissions curve alone. As so many of the recent climate reports have underscored, the world will need progress on many dimensions to successfully tackle the climate challenge at hand.

To contact the editor responsible for this story: Philip Gray at philipgray@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Meghan L. O’Sullivan is a Bloomberg Opinion columnist. She is a professor of international affairs at Harvard’s Kennedy School, and a senior fellow at the Council on Foreign Relations. She served on the National Security Council from 2004 to 2007.

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