Nathan Brook discusses the state-led schemes incentivising Zero-Emission Vehicles, taking a closer look at their unseen consequences.

There is a growing body of literature that implicates market-based instruments (MBIs), which utilise the monetary valuation of nature as a pragmatic approach to prevent environmental degradation.

As discussed in my recent article on carbon markets, discourse regarding whether nature should be assigned a price has divided critics, with claims that these frameworks promote commodification of the environment, engendering socio-ecological implications, while seldom addressing the issues they intended to tackle.

One of the most prominent sectors in which this debate is raging is the transport sector, which still relies on oil for 91% of its final energy and accounts for about a fifth of global emissions.

How are electric vehicles being encouraged?

With 74.5% of transport emissions coming from road vehicles, this places cars at the crux of addressing transport-related climate change. In a bid to curtail greenhouse gases (GHGs), many governments are introducing incentives for the development of zero-emissions vehicles (ZEVs). These state-led schemes encourage automakers to increase ZEV production, establishing an annual requirement that increases year-by-year, with the aim of reducing numbers of combustion engine vehicles over time.

In a similar fashion to carbon credits, these quotas allow for the establishment of a regulatory market, with credits determined by the percentage of ZEVs sold and influenced by factors such as vehicle range or type. Automakers have to pay fines if quotas are missed, though companies can bank or trade excess credits, establishing an emissions trading system (ETS).

For example, Tesla, a manufacturer that solely produces ZEVs, is a prime beneficiary of the California ZEV mandate, consistently gaining tradable credits. Across the period 2009–2019, Tesla sold more than USD$1.05 billion worth of ZEV credits, providing more income than product sales in some quarters.

Incentivising ZEVs via these mandates encourages other automakers to follow suit, utilising an MBI to tackle climate change. This mechanism is extremely valuable within the transport sector, as their huge contribution to global emissions make it a top priority in low-carbon transitions.

Additionally, local air pollution poses significant risks to human health, causing cardiovascular and respiratory diseases, lung cancer, as well as a host of other ailments. Thus, advancing ZEVs can alleviate heavy reliance on fossil fuels, reducing the adverse consequences of transport on the environment, as well as on human health.

ZEVs, are they really all that?

While electric cars produce fewer emissions than combustion-powered cars, being classed as a ZEV only accounts for tailpipe emissions — i.e., emissions directly expelled from the vehicle’s engine. Consequently, energy production associated with charging ZEVs is neglected within current frameworks, despite their environmental impact being largely dependent on how the electricity used to power them is generated. If the electricity comes from renewable sources like wind and solar, their environmental impact is significantly reduced, though, if the electricity is generated from fossil fuels, their environmental impact is increased.

For example, if battery-charged ZEVs are powered using the average US grid mix, they are responsible for 33-35% more emissions when compared to fuel cell electric vehicles powered using hydrogen that’s generated from natural gas.

Furthermore, evidence shows that ZEVs typically replace the production of other fuel-efficient vehicles, rather than reducing conventional combustion motors, thus the environmental benefit from ZEVs may be overstated by as much as 39%.

Additionally, other emissions-sources, such as shipping and manufacturing, are often neglected; thus, ZEVs are never truly ‘zero-emission’.

The hidden socio-ecological costs of ZEVs

However, the most shocking impact of the policies incentivising ZEVs is not really to do with emissions at all — it’s to do with increased demand for raw materials. Of particular concern are the lithium-ion batteries (LIBs) produced for ZEVs, which ignite a host of supply chain issues.

One of the most concerning materials in LIBs is cobalt, which has significantly expanded mining in the Global South, with 60% coming from the Democratic Republic of Congo (DRC). Demand for cobalt is predicted to rise to 220,000 tonnes by 2025, though questions are raised about its extraction, as 15-20% is obtained from artisanal, small-scale mining (ASM), with other estimates up to 60% in some years. Though ASM employs 110,000-150,000 miners in the DRC, the practice has been linked to human rights violations, with high percentages of underage miners, some as young as 4, working in unsafe conditions where death and injury are commonplace.

And mining itself is by no means an eco-friendly practice, requiring large swathes of land, both for manufacturing and extraction facilities. The development of this infrastructure can lead to deforestation and habitat loss, with extraction producing huge amounts of local pollution that can poison landscapes, contaminate drinking water and irreversibly destroy ecosystems.

Furthermore, mining has a history of igniting upstream localised conflicts due to arguments over compensation, displacements and resettlements, with linkages to civil wars and violence, supported by both private and government armed forces. As the majority of miners are from poor communities, they become disenfranchised due to their lack of influence in policy making processes, neglecting marginalised communities near mining sites, who experience localised environmental costs of ZEVs with little gain.

“Green extractivism that further replicates the historical inequalities between the Northern and Southern hemispheres [….] We call this phenomenon the colonial shadow of green electromobility.”

– B. Jerez et al., 2021.

Such labourers are insignificant in the eyes of the state and corporations, creating resentment as this model of exploitation prioritises foreign investment, entrenching austerity and redistributing benefits to contemporary powers. This reveals the exploitative nature of ‘green extractivism’ in the Global South, revealing what has been dubbed the “colonial shadow of green electromobility”.

Thus, while ZEV mandates are encouraging the development of low-emissions technologies and may help reduce GHGs and localised pollution directly from vehicles, behind the veil of “technological solutionism lurks deeply inequitable and exploitative activities”, with the environmental and technological burden shifted to other sectors and global regions.

Consequently, the idea that MBIs are neutral tools and promote sustainability in a way which equally benefits all is fundamentally ill-considered. The commodity chains fuelled by the low-carbon transition and ‘green’ electromobility have socio-political significance, shaping our interactions with nature in a way which can reinforce global inequality, neo-colonialist power dynamics, and environmental injustices.

So, what’s the solution?

Moving forward, these impacts must be addressed through policy and innovation, including the development of more sustainable battery technologies, with efforts to increase the efficiency of ZEVs, LIB recycling and rehabilitating mining sites.

In addition, it is important to promote and prioritise the use of renewable energy to power electric vehicles, with governments incentivising the development and installation of renewable energy infrastructures, reducing our heavy reliance on fossil-fuel energy generation. As renewable energy sources become more prevalent, the environmental impact of electric vehicles will continue to improve.

Finally, policymakers need to develop strategies that ensure the benefits of ZEVs are distributed equitably, rather than solely to the benefit of wealthy consumers in the Global North. Such policies must ensure that production of LIBs is done more sustainably, utilising responsible mining practices, allowing locals to participate in decision-making processes and safeguarding both workers and local ecosystems.

With the right policies and innovations, ZEVs may have the potential to be a mode of transportation that benefits both people and the planet. Though, how socio-ecologically equitable and just this transition is, is dependent on the interconnected relationship that corporations and governments play in global decarbonisation moving forward.