On August 25, 2022, the California Air Resources Board issued a rule banning the sale of new, gas-powered vehicles starting in 2035. This rule comes after California governor Gavin Newsom set a target in 2020 to speed up the transition to zero-emission vehicles. Transportation is the number one source of greenhouse gas emissions, and the effects of global carbon emissions on the environment writ large have been seen at the state level in the wildfires and droughts that have plagued California over the past decades, so this action places the state on the leading edge of action against an existential enemy: climate change.
California overall is the leader in clean transportation rules for the US; the nation’s most populous state also has an economy so large it would be the fifth largest in the world if it were an independent nation. Considering both California’s size and its forward-thinking position on climate issues, we asked SIS professor Claire Brunel some questions about what this ban means, how it will affect consumers, and why it could be a catalyst for change in the clean transportation movement.
- What exactly does this ban on new gas-powered cars entail?
- After 2035, new gas-powered cars will not be available for sale in the state of California. It’s important to understand this is only about new cars and only in California. This means that people can hang on to their old gas-powered cars, buy a gas-powered car on the used car market, and even cross the border into Oregon and buy a gas-powered car there that they then bring back into California. The only thing people can’t do is buy a new gas-powered car in California; for new models in the state, the main option will be electric vehicles (EV). Some hybrid vehicles will also be sold, but only the most efficient models, and they can’t make up more than 20 percent of the fleet. The ban will come into place gradually, so car companies need to start increasing their EV sales soon to reach the intermediary thresholds of 35 percent by 2026 and 68 percent by 2030. To put things into perspective, in the first half of 2022, EVs represented about 16 percent of car sales in California and about 12 percent in the US overall.
- Why is this ban so groundbreaking, and how did it come about?
- It is groundbreaking…for the US. The European Union announced a similar policy in June, except hybrids are not allowed, either. Canada, the UK, Iceland, and Chile have similar rules as well. Even General Motors, an American car company, had already announced last year that they would only sell EVs starting in 2035.
- Still, the California policy is seen as a big deal. The goal here is to bring down emissions for the transportation sector. Based on the latest data from the EPA, the transportation sector is the largest emitter of greenhouse gases (GHG) in the US, accounting for 27 percent of total emissions and ahead of the electric power sector. In the fight to limit the damages from climate change, this is an area where the technology to bring down emissions is available, and these policies aim to incentivize quicker adoption so we reap the environmental benefits in a shorter time frame.
- What does this mean for consumers and their expenses?
- EVs have obvious environmental benefits, but they’re not perfect substitutes for gas-powered cars from the driver’s perspective. First, an EV is still more expensive than a gas-powered car, even though there are tax credits that consumers can claim to help reduce that price difference. However, prices have been falling as EVs penetrate the market more and more, and with more production due to the California and EU rules, we should see further cost decreases and possibly price parity within a few years.
- The comparison does not stop at prices though; we also need progress in the range and the charging infrastructure. Nowadays, if you drive your electric car mostly within the city to your office and back, you can probably get away with exclusively charging your car at home. But for longer trips, you need to plan your route precisely to make sure you have charging stations at regular intervals. This is not a worry you have with a gas-powered car because gas stations are more or less everywhere. In addition, charging your EV generally takes more time than filling up your tank with gas, although fast charging stations are making good progress in that area. So, for EVs to be good substitutes for gas-powered cars, we need shorter charging times and many more charging stations. Of course, there is a chicken and the egg problem here: developers want to see a lot more EVs on the road before building charging stations; otherwise, they risk having half-empty stations that lose money. However, drivers want to see a lot more charging stations before they buy an EV; otherwise, they risk not being able to drive their cars outside of big cities.
- Following in California’s footsteps, what could the future look like domestically if other states adopt similar bans?
- New York and Washington states also have similar rules in place, though sometimes on a more restricted set of vehicles (only light-duty vehicles in WA). It is likely that other states will follow suit. The more EVs are produced, the more efficiently companies should be able to produce them, so costs should go down. Moreover, having more states with policies that encourage EV adoption means a lot more consumers buying EVs, which will encourage the necessary building of charging infrastructure and investment in longer-lasting, faster-charging batteries, making EV purchases more attractive.
- Importantly, other states following suit reduces the risks of leakage. Leakage is the idea that the California policy is currently limited by the fact that consumers can go to Oregon, Arizona, or Nevada to buy a gas-powered car. If Oregon, Arizona, and Nevada pass similar regulations, then it will be much harder for Californians to get gas-powered cars, as they would have to go all the way to Washington, Utah, or New Mexico. Pushing this one step further, if all US states have this ban, the only way to get around it is to drive to a whole other country to purchase a gas-powered car. The harder it becomes to purchase that gas-powered car, the less it happens and the more potent the ban is.
- Could this ban spark international policy changes on gas-powered cars, and if so, how could this affect the international climate change fight?
- Other countries were already making moves, and EVs are clearly the future for the industry. In the long run, car companies will be making more and more EVs until it is not worth it for them to bother making gas-powered models that only sell in a few markets, even if these markets still allow gas-powered cars. Given the importance of transportation emissions, this could lead to significant progress in reducing emissions and limiting climate change damages. To be sure, it will take a while for the transportation sector to truly be emission-free. On average, a gas-powered car stays on the road for about 20 years, so the latest models bought in 2034 would be on the road typically until 2054. Still, the California Air Resources Board estimates that GHGs from cars and light trucks should be cut in half by 2040, resulting in $13 billion in avoided health costs from cardiopulmonary deaths to hospital visits for respiratory illnesses. The European Union estimates that the new ban will cut emissions from the transportation sector by 55 percent; this is a large reduction and so represents great progress, but it falls short of the 90 percent needed to achieve its goal of climate neutrality.