Moving to electric vehicles certainly will have impact on the climate crisis. How much — and at what cost — is another issue.
Earlier this week, Affordable Energy for New Jersey released a new white paper that says Gov. Phil Murphy’s administration’s mandate for a shift to electric vehicles by 2035 would come at a huge financial cost to residents.
Jonathan Lesser, the president of Continental Economics and an energy industry expert, said he examined the impact of S2252, which requires a total of 330,000 electric vehicles to be on New Jersey roads by 2025 and 2 million by 2035. Lesser concluded the state’s aim to have 2 million EVs sold by 2035 will cost the state $70 billion, or $35,000 per EV — mainly due to increased energy costs associated with the switch.
Lesser, in a report entitled, “New Jersey’s Electric Vehicle Mandate: A High-Cost Boondoggle that Will Wreck the Economy, Harm the Poor and Have No Impact on Climate,” also said the impact on the environment will be negligible.
“Even under a best-case scenario in which all EVs are charged with zero-emissions electricity, the annual CO2 reduction would be equivalent to just one hour of 2022 world emissions,” he wrote.
The report breaks down the numerous new high costs associated with the EV mandate, including:
- Increased vehicle subsidies to artificially spur EV adoption;
- Lost sales tax revenues from EV purchases;
- Lost gas tax revenues to fund infrastructure that all vehicles utilize;
- Increased subsidies required to build out the necessary charging infrastructure;
- New subsidies for residential and commercial charging stations;
- Loss of highway tolls due to EV discounts;
- Costs to upgrade the electrical system to support all these changes;
- Costs to upgrade to electric buses for New Jersey Transit.
Ron Morano, executive director of Affordable Energy for New Jersey, said the paper raises concerns.
“This white paper debunks the flawed thinking that electric vehicles are a ‘big win’ for New Jersey consumers and businesses, which will save them billions of dollars,” he said.
The state’s point of view
The governor’s Office of Climate Action and the Green Economy did not directly respond to this white paper, but it has been consistent in its belief that green energy is good for the state — and that those opposed often are offering misinformation. Here are two stories that feature thoughts from Kate Klinger, the director of the office:
“That $70 billion will come in the form of new taxes that will be borne primarily by low-income residents and small businesses, who can least afford them.”
Lesser submitted the findings of his report to the New Jersey Department of Environmental Protection last Friday. Here is a summary of his findings — as submitted by Lesser:
- COST: The results of my analysis show that meeting the 2 million EV mandate by 2035 will cost the state $70 billion, or $35,000 per EV. The cumulative reduction in CO2 emissions between now and 2035, compared with an equal number of new ICVs purchased, is approximately 28 million metric tons, based on the current mix of generation in PJM Interconnection and assuming EVs are driven the same average number of miles per year as ICVs. If 2 million EVs are assumed to be charged solely with emissions-free electricity, the annual emissions reduction would be just over 4 million metric tons compared with new ICVs.
- COMPARISON: In 2022, world energy-related CO2 emissions were approximately 34.3 billion metric tons. Hence, the cumulative emissions reductions between 2023 and 2035 will be equivalent to about one day of world CO2 Even under a best-case scenario in which all EVs are charged with zero-emissions electricity, the annual CO2 reduction would be equivalent to just one hour of 2022 world emissions. Hence, neither state’s EV mandate nor the proposed ACC II rule will have any measurable impact on world climate.
- EMISSIONS: Given the PJM generation mix, emissions of SO2 from EVs will be 100 times greater than new ICVs and NOx emissions will be double. As for particulate emissions, because EVs are heavier than ICVs, road and tire-related emissions, which are a significant cause of particulate emissions, will be higher with EVs.
- CONCLUSION: The increased demand for electricity, which the state intends to meet primarily with offshore wind and solar installation, and the resulting need for backup storage and generation to keep the lights on, will result in much higher electricity costs for consumers and businesses. Higher electricity costs will lead to an exodus of energy-intensive businesses from the state. It will also reduce economic growth and jobs as businesses and consumers must devote more money to paying for electricity, leaving less for everything else. And, it will disproportionately harm the least-well-off in New Jersey, who will be required to subsidize wealthier residents who purchase EVs and install subsidized home chargers.
Morano said the report questions the movement.
“Despite excessive government patronizing and false promises, this latest analysis from Affordable Energy For New Jersey continues to show that the push for electrification is a recipe for disaster for New Jersey taxpayers,” he said.
Lesser has more than four decades of experience in the energy industry and has addressed numerous issues regarding energy and environmental policy, including cost-benefit studies of environmental regulations and economic impact analyses.
He also is the co-author of three textbooks: “Environmental Economics and Policy” (1997), published by Addison Wesley Longman; “Principles of Utility Corporate Finance” (2013), published by Public Utilities Reports Inc.; and “Fundamentals of Energy Regulation” (3rd ed., 2019).
Lesser earned a B.S. degree in mathematics and economics from the University of New Mexico and M.A. and Ph.D. degrees in economics from the University of Washington.