Individual tax credits and rebates aren't the only policy levers we use to try and increase the adoption of electric cars and other alternative fuel vehicles. The Environmental Protection Agency and the National Highway Traffic Safety Administration both have quite a lot to say about the matter as well, especially through rules that set fleet-wide standards for both fuel efficiency (the Corporate Average Fuel Efficiency, or CAFE standards) and an associated Greenhouse Gas Emission standard. But a new paper from Jeremy Michalek and colleagues suggests that the incentives built into those standards—meant to encourage the uptake of alternative fuel vehicles—might actually increase fuel consumption and CO 2 emissions.

New CAFE standards that get stricter over time were announced by the NHTSA in 2015. CAFE mandates fleet-wide targets for car makers, with a formula that takes into account the footprint of each model. Bigger cars or light trucks are allowed to get lower fuel efficiency than smaller models, and a car maker's total sales are taken into account to calculate the average across their model range.

At the same time, the EPA has another set of standards for the amount of greenhouse gas emissions across a manufacturer's range (this is separate from the EPA fuel efficiency rating that new cars get, which also differs quite a bit from the CAFE numbers). Failing to meet these targets comes with a set of different consequences. OEMs that don't meet their CAFE target have to pay a fine ($5.50 per 0.1mpg per vehicle sold), which several car makers have historically chosen to accept as cheaper than the alternative. The EPA's emissions standards aren't quite as lenient, however; it's within the agency's power to revoke one's license to sell vehicles inside the US.

Built into those greenhouse gas standards are incentives to sell more alternative fuel vehicles—battery electric vehicles (BEV), plug-in hybrid EVs (PHEV), fuel cell vehicles (FCV), and flex-fuel vehicles (FFV), which can use ethanol, methanol, or 85 percent ethanol-gasoline blends. There are various weighting factors and multipliers built in that change over time, so that a BEV or FCV sold in 2017 counts more than one sold in 2020, and a BEV or FCV counts more than a PHEV or FFV.

But several analyses of these standards, including the latest study published in Environmental Science and Technology, have found that the incentives can actually have an unintended side effect. The more EVs and other alternative fuel vehicles you sell, the dirtier and less efficient the rest of your cars can be.

Researcher Jeremy Michalek and his colleagues at Carnegie Mellon calculated the net effects of the alternative fuel incentives from 2010 through 2025 using projection data from the Energy Information Agency. They found that the effects of the EPA and NHTSA weighting may actually increase the amount of CO 2 emitted over that timeframe by between 30 and 70 million tons—equivalent to relaxing the GHG standard by between 0.8 and 1.5 percent. That also means using an extra 3-8 billion US gallons (11-30 billion L) of gasoline over the same period.

We've previously looked at the way that EV incentives have unintended consequences , and their effects are not equal. The picture here in the US is complicated by state emissions and economy standards that can concentrate cleaner vehicles in some areas (like California) at the expense of other states that don't care what comes out of a tailpipe.

Ideally, getting a cleaner US passenger car and light truck fleet would be achieved through other policy levers, like an escalating federal gasoline tax or proper carbon pricing that reflects the externalities of fossil fuels. But the level of gridlock in Congress shows no signs of changing any time soon, making these goals politically unrealistic. For now, government agencies tasked by Congress to improve fuel efficiency and decrease climate emissions are restricted to using existing mechanisms already under their control. But as Prof. Michalek told Ars, it's possible that in the near term, those might not work exactly as well as intended.

DOI: 10.1021/acs.est.5b02842 (About DOIs).