08 April 2014

Are hybrid cars cleaner?

Ka Fung Cheung writes:*

Greenhouse gas emissions is one of the most concerned environmental problems among our society. In many cities, the largest contributor of GHG emissions is the usage of vehicles. In respond to this, car companies develop hybrid vehicles. The global sales of the Toyota Prius reached 3 million in June 2013. However, some research suggests that the production of a hybrid car requires more energy than a conventional car. As a result, the production of hybrid cars generate more GHG. But, when we look at the life-cycle of a hybrid car and a conventional car, the overall carbon footprint of a hybrid car is still less than a conventional car’s. Toyota introduced a plug-in hybrid in 2012. The car has a larger battery and can drive 10-20 miles more with zero carbon emissions. However, this plug-in hybrid requires electricity, and the carbon footprint of the car depends on how the electricity is generated. If the electricity is generated from coal rather than natural gas, the hybrid car actually leaves more carbon footprint than a conventional car.

Bottom Line: Government should motivate the use of hybrid vehicles in order to reduce GHG emissions. Also, they should set up policy to shift the coal-based electricity generation to natural gas or other sustainable energy source.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

6 comments:

  1. Ka Fung Cheung: Thanks for this helpful contribution. We've been thinking about buying a hybrid and you have given me useful questions to think about. It would help me work out this decision if you could link to some information sources where I can find further information about the points you are making.

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  2. I strongly disagree with the conclusion that the government should motivate the use of hybrid cars.

    Picking winners may be fun for people who enjoy power but there is a lot of evidence that they do not make good decisions. And there are always the problems of rent seeking and regulatory capture to worry about.

    As you discuss, the environmental benefit of hybrid cars is not necessarily clear cut and you did not even address pollution and recycling issues associated with large battery packs.

    A better policy would be for the try to neutrally internalize the negative externalities associated with greenhouse gas production. This might include a tax and rebate program for greenhouse gases where ever they occur.

    Bottom Line: Don't make false policy choices that pick winners and losers.

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  3. I agree with Jay on this. As you point out, hybrid cars could be effectively coal powered from the grid. With expensive and non-green batteries

    Why not adjust incentives with an economic logic and let consumers decide
    - externality cost on CO2 and other air pollutants
    - allow electric vehicle owners to sell stored power back into the grid at the relevant marginal costs. So if they help reduce peak load, they'd get the benefit

    there is a logic to doing this- but it isn't clear how much this policies would necessarily drive consumer adoption. uncertainty regarding battery costs drive that decision- and government has no business picking winners in that technology race

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  4. Ka Fung Cheung10 April, 2014 06:31

    Re:John Fleck
    Thanks for commenting. Here is one of the source I read when I wrote the blog: http://auto.howstuffworks.com/fuel-efficiency/hybrid-technology/hybrid-cars-cause-pollution1.htm
    Pollution-wise, I am not sure if hybrid cars really reduce carbon emission. But if you are looking to save money on fuels, I think many hybrids are significantly more fuel efficient.

    Re:Jay and Mac
    I have read some articles about the hybrids' battery too. I didn't put it in the blog, because I was over the word limit. I suggested government to motivate the usage of hybrids because if people are willing to use the hybrids for long enough, the overall footprint of hybrids may be lower than conventional cars. Of course there are more efficient policy to reduce carbon emission such as carbon tax or cap and trade.

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  5. I appreciate Ka Fung Cheung's response, but before anyone advocates for government intervention of the type advocated one should understand rent seeking behavior, regulatory capture, public choice economics, the law of unintended consequences, and the problem of concentrated benefits and defused costs. All of these are easy to understand, readily observable, but under appreciated.

    Bottom Line: Things don't turn out in real life they way many imagine when they don't consider how self interested individuals will react to a new set of incentives.

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  6. Some good comments here. One thing not mentioned though, when you say many hybrids are significantly more fuel efficient, if you compare those with similar gas models they are cost considerably more to purchase initially. We are currently looking at Ford Fusions both hybrid and regular gas. In general it will cost me 3-4 thousand more for the hybrid. At a max calculated fuel savings of $500/yr it will take 6-8 years for the hybrid to be even cost neutral. I also don't believe they are better environmentally with the production and recycling of batteries. A lot of those studies don't talk about recycling, just production, and recycling is a very dirty process. Those greenhouse gas calculations also don't account for the huge amounts of water used in these processes, with water also being a more an more precious resource. Those that don't mention recycling don't mention that typically batteries being replaced means another set of batteries was produced to replace it, will all those production emissions added in again. Hybrids and similar are pushed by politicians because it looks good in headlines and they rarely dig into such a topic enough to consider all the factors (see E85 ethanol, "cash for clunker", etc...)... If environmental scientists with no outside agenda made these decisions hybrids and electric cars would likely not exist at all. All that being said, oddly enough we are still considering the Fusion hybrid, but only because it makes my wife feel good to drive it, with all the other factors having been thought through...

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