You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Anu Khan is pushing carbon credits to better serve the public good.
There’s a new player in carbon removal. It’s not another startup building machines to suck carbon from the air. And it’s not another trade association or consulting firm or marketplace peddling carbon removal credits. Instead, it wants to help establish a different system for advancing carbon removal — one where the challenging but important goal of scrubbing CO2 from the atmosphere is treated as a public good and not just a business opportunity.
It’s called the Carbon Removal Standards Initiative, and it’s run by Anu Khan, the former deputy director of science and innovation at Carbon180. CRSI (pronounced like the Lannister queen in Game of Thrones, “Cersei”) is a “financially unconflicted, independent nonprofit,” that will provide technical assistance to policymakers, regulators, and nongovernmental organizations in quantifying carbon removal outcomes.
A group providing technical assistance may not sound like a revolutionary development. But Khan hopes CRSI will be a fulcrum around which the entire industry can begin to pivot.
Today’s carbon removal industry is built on selling credits, each of which is supposed to represent one ton of CO2 pulled out of the atmosphere. But the market is almost entirely self-regulated. The standards for measuring and reporting how much carbon a given project is removing have either been developed by the carbon credit registries that take a cut of the sales or by the developers themselves — in both cases a conflict of interest, even if governed by the best of intentions. Plus, there’s a multitude of standards for every type of project, and they vary in quality.
Take carbon farming, for example. If a farmer alters their practices to increase the carbon stored in their soil, they can choose from more than a dozen standards to quantify the effects. In theory, the standards all produce an identical product — a fungible carbon credit equivalent to one ton of carbon removed from the atmosphere. In reality, they vary widely in quality, with some standards producing more accurate results than others.
In watching this environment develop over the past several years, I’ve often wondered if some independent, unbiased entity might eventually step forward to enact one set of standards to rule them all. Khan told me that about a year and a half ago, she had the same thought. “Oh, to be so young,” she said.
At the time, there was growing concern that the carbon removal industry would suffer from the same credibility issues that plagued the wider market for carbon credits. “You have a multiplicity of these verification entities driven by profit motives, some of which have very loose standards,” Wil Burns, the co-executive director of the Institute for Carbon Removal Law and Policy at American University, told me. “From the standpoint of those purchasing credits or those viewing whether companies are doing anything meaningful, nobody can really distinguish.”
In early 2023, dozens of carbon removal suppliers, buyers, verifiers, academics, and nonprofit staff — including Khan — signed an open letter that now reads like an early draft of CRSI’s missions statement. It called for the creation of “an independent, not-for-profit initiative that conscientiously avoids conflicts of interest and has funding that does not depend on issuing or selling carbon credits.” This new body would “provide a trusted, scientific stamp of approval for CDR protocols through an inclusive process to identify scientific consensus.”
The letter focused on the issues with measuring carbon removal in the context of the voluntary sale of carbon credits. But over the next year, it became clear to Khan that carbon removal won’t reach the scale necessary to make a dent in climate change without government policy. “Even the market enthusiasts recognize that we’re going to need policy as quickly as possible to shore this up,” she said, “and it’s going to be policy, long term, that gets us to gigaton scale.”
So instead of providing “a trusted, scientific stamp of approval” to private businesses, CRSI is laser focused on working with policymakers. It’s not entirely clear yet what that will look like, and it’s likely to evolve as CRSI finds its footing. But the group is launching with a few projects that are already underway. It has created a database of “quantification resources,” which is basically a list of all of the methodologies published by companies, academics, government agencies, and international standards organizations, for measuring different kinds of carbon removal. It also has a database of carbon removal policies, both those enacted and proposed. Eventually, Khan plans to have them link out to each other, so you can see which standards underpin which policies.
Khan wants CRSI to be a go-to resource for policymakers and agency staff to ensure that carbon removal programs actually result in climate benefits. “We are fundamentally a mission organization,” she told me. “We believe that carbon removal is a tool for climate justice. Justice requires accountability, and in carbon removal, that means knowing how to count the carbon. We want to make sure that if we're putting public dollars into these policies, that they are backed by the ability to actually measure the carbon.”
Khan isn’t the only one whose thinking on standards has shifted toward a government-led approach. Burns, who also signed the letter, told me he’s seeing more carbon removal companies pushing for a compliance market, where the government requires polluting businesses to buy carbon removal. “They would like to both have government standards that would provide more confidence, for example, to investors,” he said, “and they would like government mandates that generate more demand.”
Freya Chay is the program lead at the nonprofit Carbon Plan, which spearheaded the letter. She told me many in the industry are now thinking about carbon removal programs that don’t revolve around selling credits at all, and therefore may have very different measurement and verification needs.
One of CRSI’s first projects is an illustrative example. Imagine if the Department of Agriculture developed a program to help farmers restore the pH of soils that have gotten too acidic, by adding basalt — a mineral that also happens to capture CO2 from the atmosphere as it dissolves. Today, carbon removal companies that sell carbon credits based on this process are taking hundreds of soil samples to measure the outcomes. The USDA likely wouldn’t need that level of precision — the captured CO2 is a co-benefit, not the entire point of the program — but “at some point you probably do want to know if you removed carbon through this policy,” said Khan. CRSI is working on figuring out how you would do that.
Similarly, we might see the development of building codes that encourage the use of concrete cured with CO2 from the atmosphere, or waste management regulations that govern the injection of carbon-rich organic waste into underground storage wells. Bigger picture, the U.S. will eventually have to measure and report how much carbon removal it’s doing across all of these little programs as part of its obligation under the Paris Agreement.
In many of these cases, those setting the rules won’t be experts in carbon removal science. “They’re going to need technical expertise,” said Khan. “We want to make sure that when they are doing that work, they have access to all of the relevant information, and that it’s organized in a way that’s legible for the expertise that they already have.”
Shuchi Talati, the former chief of staff in the office of fossil energy and carbon management at the Department of Energy, told me that having this kind of centralized resource would definitely have been useful. “The private sector has a lot of power right now in setting standards because the public sector doesn’t have the capacity,” she said. And since the field is so diverse, efforts are spread across a bunch of different agencies that don’t always talk to each other. Talati sits on the board of CRSI, and for her, the focus on government is not just about helping carbon removal scale.
“If we’re allowing the private sector to set standards and norms — and maybe they’re fine right now — but if we continue to let that happen, I can see the actual climate benefit of CDR slipping away,” Talati said. “That’s really where I see Anu’s organization fit in, where we are trying to set standards and norms from this core, foundational principle of a public good.”
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
The PJM Interconnection can’t seem to figure out supply and demand anymore, which could be good news for natural gas.
Here’s a dilemma: Large chunks of fossil fuel-powered energy generation are scheduled to fall off the U.S. electric grid in the next decade thanks to economic and regulatory pressures. Even larger chunks of renewable energy generation have not yet been approved to connect to the grid and may not be for years, if ever. Meanwhile, data centers and electrification have kicked off the first notable demand growth for electricity markets in over 20 years. On top of all that, the grid has become increasingly vulnerable to climate change-fueled disruptions, whether from solar power being knocked out by hail or natural gas lines freezing in an ice storm.
In some parts of the country, the solution to this dilemma is relatively simple. In much of the Southeast and -west, large utilities that own power plants are simply building more natural gas power plants. In California, regulators are mandating that utilities procure enormous amounts of energy storage, and have rejiggered residential solar rules to encourage more combinations of solar panels and batteries. And Texas is planning to lend billions of dollars at low interest rates to help finance natural gas plant construction.
Then there’s the PJM Interconnection, the 13-state electricity market serving much of the East Coast and Midwest, run by the country’s largest regional transmission organization. Despite PJM’s constant warnings about natural gas and coal generation retiring, it has not been able to bring new generating resources online in a reasonable timeframe. The grid operator — technically a non-profit — has neither the regulatory muscle nor the financial firepower to shape new energy generation to its preferences; its interconnection queue got so long, it instituted a two-year pause on new applications.
While many of PJM’s problems are unique to its particular circumstances, they’ve gotten so severe in recent months, it calls into question whether the decades-long project of structuring electricity generation, transmission, and distribution into something like a market is even working anymore.
“The whole premise is that a capacity market is about efficient entry and efficient exit,” Abe Silverman, an assistant research scholar at Johns Hopkins and former New Jersey utility regulatory official, told me. “We’re squeezing the tube on the entry side and letting very few new entrants in.”
According to PJM’s independent market monitor, at the end of last year, there were just over 7 gigawatts of natural gas projects in the queue, about half of which it expected to go into service eventually, while some 24 gigawatts to 58 gigawatts of coal and natural gas is expected to retire by 2030. There were over 200 gigawatts of renewables projects in the queue, the market monitor said, but only around 30 gigawatts that’s expected to go into service, and for the purpose of a capacity auction, only about 11 would count.
But for power market observers, the sirens really started going off at the end of July, when PJM held what’s called a capacity auction, which determines the price companies get paid to supply energy-generating capacity over and above forecasted peak demand in order to avoid blackouts. By the end of the five-day process, the cost of that capacity came out almost 10 times higher for than the previous PJM capacity auction — $14.7 billion, compared to just over $2 billion in 2022 — a signal that supply, demand, and reliability dynamics within PJM are seriously imbalanced.
That almost certainly means rate increases for consumers. In Maryland specifically, some residential electricity bills could rise anywhere from 2% to 24%, a monthly change of $4 to $18, according to the state’s Office of People’s Counsel.
What that almost certainly does not mean is a huge amount of new generation coming online. “In an efficient capacity market structure, the market starts sending higher price signals and generators start coming on-line,” Silverman told me. “Usually when you see high prices, you would expect more of a response from the supply side.”
In PJM, however, “new generation cannot come online quickly,” according to a letter from a group of consumer advocates in PJM states, therefore “the high capacity market prices are not an effective signal for new entry but instead a windfall for the owners of existing generation.”
Ironically, the high prices were due, in part, to PJM applying a formula it typically reserves for renewables to coal and gas plants, which “derates” the capacity they’re able to offer in times of stress, e.g. during a winter storm. Historically, coal and gas got high ratings because high winds and cold temperatures was considered unlikely to disrupt their production, while solar and wind scored much lower. But after 2022's Winter Storm Elliott, during which natural gas lines froze and caused a mass blackout, PJM knocked down the rating for combined cycle gas plants — the most efficient kind of gas plant, which recaptures heat exhaust to produce more power — from 96% to 79%, and for combustion turbine natural gas plants from 90% to 62%. Wind got a bump, while solar was rated down.
In other words, “PJM doesn’t view all these megawatts as reliably as they did before Elliott,” Nicolas Freschi, a senior associate at Gabel Associates, which does energy and environmental consulting for federal agencies, told me. That meant some 26 gigawatts of projected coal and gas capacity disappeared from the auction, according to S&P Global Commodity Insights.
The environmental activist community has long argued that gas is less reliable than utilities and the public seem to think it is, and that this should be taken into account with grid planning. The gas derating was “a good thing,” Claire Lang-Ree of the Natural Resources Defense Council told me, “because that means what we're paying for in this auction is actually reliable. It's a truing-up of the system.”
At the same time, she acknowledged, the auction result was “a bad thing insofar as it was the driving cause of the price spike,” which also means huge payouts for power companies.
“Despite the decrease in capacity credit, the higher capacity prices will impact the capacity revenue received for projects in PJM, generally increasing it,” S&P analysts wrote in August. By way of example, S&P looked at one natural gas plant in Ohio and found that its project per-megawatt-hour net revenue in 2026 would increase by 40%.
Morgan Stanley estimated that major power producers such as Texas-based Vistra and Maryland’s Constellation Energy would see a boost to their earnings before interest, taxes, and amortization of $700 million to $800 million each.
And yet in both Texas and PJM, many analysts (not to mention the gas industry) still see gas as the solution to a shortfall exacerbated by gas’s documented vulnerability. That’s due to its ability — at least on paper — to generate large amounts of power at any time of day.
So far, however, only one power producer with a large natural gas fleet, Calpine, has publicly indicated that it will aggressively pursue development in PJM. Calpine operates a 76-facility fleet that includes 66 fossil fuel-fired plants from California to Massachusetts. “The PJM market needs and values reliable, dispatchable, non-duration-limited power” the company said in a press release. (These are all industry code words for natural gas.) Calpine said it was “accelerating its PJM electricity generation development program following market signals indicating higher demand for reliable power,” and that it was looking at “multiple new locations in the PJM region, particularly in Ohio and Pennsylvania.”
Other companies have been more cautious. “It is only one auction, of course, and not long enough out in the future to be starting a new project,” Vistra chief executive Jim Burke said in an August earnings call. Morgan Stanley analysts noted that because the next auction is in December, “we don't foresee enough time to build significant new generation capacity. There are only 18 months between the auction and the start of the delivery year, which doesn’t leave time for permitting, interconnection queue timing, and construction because they are behind.”
S&P forecast that only one natural gas project under construction in Ohio could possible bid into the next auction. And while stock and bond analysts are more focused on the prospects for new natural gas plants, they are not particularly optimistic they’ll come online any time soon. “Merchant newbuilds remain marginal under our assumptions, indicating price signals may need to improve further to incent merchant new entry,” Guggenheim analyst Shahriar Pourreza wrote in a note.
Todd Snitchler, the head of the independent power generator trade group Electric Power Supply Association, noted to me that the July auction price was “coming off a record low,” and that the “abnormally” low prices in the previous two auctions — which were then followed by a lengthy delay — “suggested that assets should be leaving, and not coming on” — a trend PJM and other electricity market overseers have been warning about for years.
“One auction does not make a trend make,” Snitchler said.
If prices stay high, however, some analysts think power producers will eventually start trying to build new natural gas plants in PJM. “Investors don’t want to start building extremely expensive projects until they’re sure this price environment is sustainable,” Freschi told me.
Instead of beckoning new gas construction, clean energy and ratepayer advocates want PJM to focus on interconnection reform so that its existing queue — which is overwhelming renewables — can finally make its way onto the grid.
In a statement to Heatmap, PJM said its new system of evaluating projects in groups instead of on a first-come, first-served basis will lead to 230,000 megawatts being processed over the next three years. The PJM spokesperson also pointed to Calpine's announcement as a sign that the capacity auction was bringing new investment.
“We need investment in real projects that can get connected to the grid quickly, as opposed to the speculative projects that have clogged the queue in the past,” the spokesperson said. “Our reformed interconnection process encourages projects with the best chance of being built, and we are weeding out some of those that have been hanging on for years past receiving an interconnection agreement from PJM and who have not moved to construction.”
“Generators should submit their new project queue positions today,” the spokesperson added.
But like so many projects clogging the queue, these reforms are speculative, and in the end the restructured market, where new supply supposedly responds to high prices, simply may not work on its own terms. Some of this is due to policy in PJM states — you’re unlikely to be able to build a new natural gas plant in Democratic-controlled states like Maryland, New Jersey, or Illinois, and Guggenheim’s Pourreza wrote that “any new gas generation will be clustered in [Pennsylvania, Ohio, and West Virginia],” which could both lead to lower capacity prices in some areas and a more unbalanced market as new gas capacity becomes concentrated geographically.
But even in areas that are famously friendly to fossil fuels and have less complicated market and interconnection processes, demand for new gas has not smoothly resulted in gas plant construction. In Texas, which has closest thing to a free electricity market that exists in the United States, the state has had to turn to a multibillion low interest rate financing program to entice developers to build new natural gas plants.
May that be a warning to regional transmission planners everywhere. As S&P analysts wrote, “High prices signal the need for new generation, but do not guarantee it.”
Current conditions: Typhoon Yagi was downgraded to a tropical depression after tearing through northern Vietnam • Hollywood Bowl had to cancel a show on Sunday because excessive heat knocked out power to the venue • Forecasters are watching storm Francine in the Atlantic Basin that is likely to strengthen into a hurricane.
The fast-moving Line Fire in California’s San Bernardino County has burned more than 20,500 acres and prompted evacuation orders for thousands of people. The blaze started last week, but doubled in size between Saturday and Sunday as a heat wave on the West Coast sent temperatures soaring. The neighboring town of Riverside recorded a new daily record of 110 degrees Fahrenheit yesterday. Smoke from the fire is forming clouds and storm systems that are causing lightning strikes, which can spark even more fires. The blaze remains zero percent contained, with more than 36,000 structures in its path.
In Nevada, the Davis Fire, just south of Reno, scorched 6,500 acres and forced some 20,000 people to evacuate. Schools in the area are closed. Excessive heat warnings will remain in effect across southern California and the Southwest today.
Former President Donald Trump and Vice President Kamala Harris are gearing up to face off in their first 2024 presidential debate tomorrow. Trump is reportedly already planning to call the ABC News event “rigged,” and has repeatedly attacked the network in recent days. He might also use the debate to draw attention to Harris’ previous call for a ban on fracking. In 2020, Harris was opposed to fracking, but has since changed her position. “We can grow and we can increase a thriving clean energy economy without banning fracking,” Harris told CNN’s Dana Bash recently. But like President Biden during his tenure, Harris has to balance the interests of several important demographics on climate and energy issues. “The Harris campaign is trying to avoid being pulled between environmentalists and the Pennsylvania oil and gas sector,” Kevin Book, a managing director at consulting firm ClearView Energy Partners, told E&E News.
Massachusetts and Rhode Island on Friday selected 2,878 megawatts of wind power capacity from three projects – SouthCoast Wind (owned by Ocean Winds), New England Wind 1 (developed by Avangrid Inc.), and Vineyard Wind 2 (from Copenhagen Infrastructure Partners’ Vineyard Offshore). The selections were the result of a multi-state procurement collaboration, the first in the U.S., and amount to the largest offshore wind initiative New England has seen so far. Massachusetts secured most of the capacity, with 2,678 MW. Once online, this wind power will meet nearly 20% of the state’s electricity demand and result in emissions reductions equivalent to removing 1 million gas-powered cars from the roads. “The economic ripple effects of these projects will be massive,” wrote Michelle Lewis at Electrek. “New England’s ports in New Bedford, New London, Salem, and Providence are now booked with offshore wind tenants through 2032. These hubs will serve as launching points for wind turbines and other infrastructure that will transform the region’s energy landscape.”
CEOs planning their business strategies are prioritizing sustainability less now than they have over the last few years, The Wall Street Journalreported, citing a new report out from Bain & Co. Executives are thinking more about issues like inflation, artificial intelligence, and geopolitical uncertainty, even as 60% of consumers (and especially Gen-Z consumers) say their own levels of climate concern have grown due to extreme weather events. A recent WSJ Pro analysis found that mentions of sustainability are high in company financial reports, but low in earnings calls and marketing materials. Meanwhile, just over a third of businesses are falling short of their Scope 1 and 2 emissions targets, and more than half are missing their Scope 3 targets.
A new study suggests sharks are abandoning coral reefs due to warming ocean waters caused by climate change. Grey reef sharks tend to stay close to shallow reef habitats in the Indo-Pacific, but the research team, led by marine scientists at Lancaster University, found that warmer waters are forcing the sharks to leave for extended periods of time. Their absence could further disrupt reef ecosystems. “Faced with a trade-off, sharks must decide whether to leave the relative safety of the reef and expend greater energy to remain cool or stay on a reef in suboptimal conditions but conserve energy,” said David Jacoby, a lecturer in zoology at Lancaster University and one of the authors on the study. “We think many are choosing to move into offshore, deeper and cooler waters, which is concerning.”
Zion National Park in Southern Utah has replaced its propane shuttle buses with 30 all-electric buses. The National Park Service is working on similar zero-emission fleets at other parks including Grand Canyon, Acadia, Yosemite, Bryce Canyon, and Harpers Ferry.
NPS/Colton Johnston
Any EV is better for the planet than a gas-guzzler, but size still matters for energy use.
A few Super Bowls ago, when General Motors used its ad spots to pitch Americans on the idea of the GMC Hummer EV, it tried to flip the script on the stereotypes that had always dogged the gas-guzzling SUV. Yes, it implied, you can drive a military-derived menace to society and still do your part for the planet, as long as it’s electric.
You don’t hear much about the Hummer anymore — it didn’t sell especially well, and the Tesla Cybertruck came along to fill the tank niche in the electric car market. But the reasoning behind its launch endures. Any EV, even a monstrous one, is a good EV if it convinces somebody, somewhere, to give up gasoline.
This line of thinking isn’t wrong. A fully electric version of a big truck or SUV is far better, emissions-wise, than a gas-powered vehicle of equivalent size. It’s arguably superior to a smaller and efficient combustion car, too. A Ford F-150 Lightning, for example, scores nearly 70 in the Environmental Protection Agency’s miles per gallon equivalent metric, abbreviated MPGe, that’s meant to compare the energy consumption of EVs and other cars. That blows away the 20-some miles per gallon that the gas F-150 gets and even exceeds the 57 combined miles per gallon of the current Toyota Prius hybrid.
In terms of America’s EV adoption, then, we’ve come to see all EVs as being created equal. Yet our penchant for large EVs that aren’t particularly efficient at squeezing miles from their batteries will become a problem as more Americans go electric.
Big, heavy cars use more energy. This is how we worried about the greenness of cars back in the days before the EV: Needlessly enormous models such as the Ford Expedition and the Hummer H2 deserved to be shamed, while owning a fuel-sipping hybrid or a dinky subcompact was the height of virtue.
This logic has gotten a bit lost in the scale-up phase of electric vehicles going mainstream. We talk at length about EV sales and how fast their numbers are growing; we rarely talk about whether the EVs we buy are as energy-efficient as they could be. As a new white paper from the American Council for an Energy-Efficient Economy points out, though, getting more miles out of our EV batteries would save drivers money and reduce the strain on the grid that will come from millions of people charging their cars.
The simplest way to measure an EV’s fuel efficiency is to know how many miles it travels per kilowatt-hour of electricity. Popular crossovers like Tesla’s Model Y and Kia’s EV6 achieve a pretty-good 3.5 miles per kilowatt-hour. Look at bigger, heavier vehicles and you’ll see a major fall-off. InsideEVs found that Rivian’s R1S gets between 2.1 and 2.4 miles per kilowatt-hour. The hulking Hummer EV scores just 1.5, according to Motor Trend’s testing. The EPA’s MPGe data is another way to see the same story. The 60-some miles per gallon equivalent of an electric pickup like the Rivian R1T or Chevy Silverado EV crushes the mileage of petro trucks, but pales next to the 140-plus MPGe that an electric sedan from Hyundai or Lucid can claim. (Those EVs can deliver 4 or more miles per kilowatt-hour.)
Even modest gains in EV efficiency could cause beneficial ripple effects, the ACEEE says. Drivers who own a 3.5 miles per kilowatt-hour car would save hundreds of dollars on fuel annually compared to those whose vehicles get 2.5 miles per kilowatt-hour. More efficient cars should be less expensive, as well. Huge, inefficient EVs need to carry enormous batteries just to reach an adequate range, and the bigger the battery, the bigger the cost. Whereas a Model Y’s battery capacity ranges from 60 kilowatt-hours for standard range to 81 kilowatt-hours for long range, a Rivian’s runs from 92 to 141.5 kilowatt-hours. ACEEE calculates that the jump from 2.5 to 3.5 kilowatt-hours could shave nearly $5,000 from the cost of making a car because it would need so much less battery.
Making EVs more efficient would mean faster charging stops, too, since drivers wouldn’t need to cram so many kilowatt-hours into their batteries. It would ease demand for electricity, making it easier for the grid to keep pace with an electrifying society. But convincing Americans to buy smaller, more efficient vehicles has been an uphill battle for decades.
Earlier this summer, Ford CEO Jim Farley called for a return to smaller vehicles as more of the U.S. car fleet turns over to electric. Yet it was Ford that just a few years ago quit making cars altogether (outside of the Mustang) because it reaped so much more profit on the pricier crossovers, SUVs, and pickups that Americans have voted for with their wallets. And not long after Farley’s speech, the company scaled back its EV ambitions, clearly struggling to find a way to sell electric vehicles profitably.
The issue is not only carbuyers’ preference for big, heavy vehicles. ACEEE points out that public policy doesn’t punish big electric cars. “The EPA standard treats all EVs as having zero emissions. It therefore provides no incentive to improve EV efficiency since inefficient and efficient EVs are treated the same for compliance purposes,” the paper says.
That is why ACEEE floats the idea of a policy change. For example, its paper suggests the fees some states levy against EVs (ostensibly to make up for the lost revenue from those cars avoiding the gas tax) could be tweaked to charge more for inefficient EVs. Rebates for purchasing an EV could be changed in the same manner.
It was, after all, regulatory loopholes and misplaced incentives that helped big gas guzzlers conquer the roads in the first place. With better rules about big EVs, perhaps we could avoid repeating the mistakes of the past.