IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v198y2025ics0301421524004932.html
   My bibliography  Save this article

Fuel efficiency, power trading, and emissions leakage from driving electric vehicles: Evidence from Chinese provinces

Author

Listed:
  • Wei, Feng
  • Walls, W.D.
  • Zheng, Xiaoli

Abstract

This paper investigates how driving electric vehicles redistributes tailpipe emissions and brings unintended impacts elsewhere. Using vehicle registration and electricity transmission data in China, we decompose emissions reductions of adopting an electric vehicle into three distinct effects: fuel efficiency, power trading, and emissions leakage. The fuel efficiency effect, arising from the higher energy conversion rates of electric vehicles relative to gasoline vehicles, accounts for most emissions reductions by electric vehicle adoption. The power trading effect, referring to emissions exported by outsourcing power generation used to charge electric vehicles, constitutes only a small portion of emissions reductions. The power trading effect is nearly offset by the leakage effect—the emissions increases borne by other regions, implying little nationwide gain from shifting charging power across regions. Overall, some provinces incur losses by net emissions increases, though most benefit from electric vehicle adoption. The losing provinces capture proportionally fewer benefits from local small-scale electric vehicle adoption but absorb disproportionately more emissions by supplying power used for electric vehicle charging in other areas. We show that investing in renewable power generation should be prioritized to mitigate the inequality of emissions reductions across regions in the middle and late stages of electric vehicle transition.

Suggested Citation

  • Wei, Feng & Walls, W.D. & Zheng, Xiaoli, 2025. "Fuel efficiency, power trading, and emissions leakage from driving electric vehicles: Evidence from Chinese provinces," Energy Policy, Elsevier, vol. 198(C).
  • Handle: RePEc:eee:enepol:v:198:y:2025:i:c:s0301421524004932
    DOI: 10.1016/j.enpol.2024.114473
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421524004932
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.enpol.2024.114473?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Gøril L. Andreassen & Jo Thori Lind, 2024. "Correction to: Climate, Technology and Value: Insights from the First Decade with Mass-Consumption of Electric Vehicles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(7), pages 1845-1846, July.
    2. Gan, Yu & Wang, Michael & Lu, Zifeng & Kelly, Jarod, 2021. "Taking into account greenhouse gas emissions of electric vehicles for transportation de-carbonization," Energy Policy, Elsevier, vol. 155(C).
    3. Holland, Stephen P. & Mansur, Erin T. & Muller, Nicholas Z. & Yates, Andrew J., 2021. "The environmental benefits of transportation electrification: Urban buses," Energy Policy, Elsevier, vol. 148(PA).
    4. Shen, Yung-Shuen & Huang, Guan-Ting & Chang-Chien, Chien-Li & Huang, Lance Hongwei & Kuo, Chien-Hung & Hu, Allen H., 2023. "The impact of passenger electric vehicles on carbon reduction and environmental impact under the 2050 net zero policy in Taiwan," Energy Policy, Elsevier, vol. 183(C).
    5. Qiao Yu & Brian Yueshuai He & Jiaqi Ma & Yifang Zhu, 2023. "California’s zero-emission vehicle adoption brings air quality benefits yet equity gaps persist," Nature Communications, Nature, vol. 14(1), pages 1-14, December.
    6. Bhardwaj, Chandan & Axsen, Jonn & McCollum, David, 2022. "Which “second-best” climate policies are best? Simulating cost-effective policy mixes for passenger vehicles," Resource and Energy Economics, Elsevier, vol. 70(C).
    7. Sheldon, Tamara L. & DeShazo, J.R., 2017. "How does the presence of HOV lanes affect plug-in electric vehicle adoption in California? A generalized propensity score approach," Journal of Environmental Economics and Management, Elsevier, vol. 85(C), pages 146-170.
    8. Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2016. "Are There Environmental Benefits from Driving Electric Vehicles? The Importance of Local Factors," American Economic Review, American Economic Association, vol. 106(12), pages 3700-3729, December.
    9. Irene Jacqz & Sarah Johnston, 2024. "Electric Vehicle Subsidies and Urban Air Pollution Disparities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 11(S1), pages 41-69.
    10. repec:cdl:itsdav:qt5xv65775 is not listed on IDEAS
    11. Sheng, Mingyue Selena & Sreenivasan, Ajith Viswanath & Sharp, Basil & Du, Bo, 2021. "Well-to-wheel analysis of greenhouse gas emissions and energy consumption for electric vehicles: A comparative study in Oceania," Energy Policy, Elsevier, vol. 158(C).
    12. Lukanov, Boris R. & Krieger, Elena M., 2019. "Distributed solar and environmental justice: Exploring the demographic and socio-economic trends of residential PV adoption in California," Energy Policy, Elsevier, vol. 134(C).
    13. Sovacool, Benjamin K. & Turnheim, Bruno & Hook, Andrew & Brock, Andrea & Martiskainen, Mari, 2021. "Dispossessed by decarbonisation: Reducing vulnerability, injustice, and inequality in the lived experience of low-carbon pathways," World Development, Elsevier, vol. 137(C).
    14. Lucas W. Davis & Catherine Hausman, 2022. "Who Will Pay for Legacy Utility Costs?," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(6), pages 1047-1085.
    15. Peng, Wei & Yang, Junnan & Lu, Xi & Mauzerall, Denise L., 2018. "Potential co-benefits of electrification for air quality, health, and CO2 mitigation in 2030 China," Applied Energy, Elsevier, vol. 218(C), pages 511-519.
    16. Li, Guodong & Walls, W.D. & Zheng, Xiaoli, 2023. "Differential license plate pricing and electric vehicle adoption in Shanghai, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 172(C).
    17. Stephen P. Holland & Erin T. Mansur & Andrew J. Yates, 2021. "The Electric Vehicle Transition and the Economics of Banning Gasoline Vehicles," American Economic Journal: Economic Policy, American Economic Association, vol. 13(3), pages 316-344, August.
    18. Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2019. "Distributional Effects of Air Pollution from Electric Vehicle Adoption," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(S1), pages 65-94.
    19. Langbroek, Joram H.M. & Franklin, Joel P. & Susilo, Yusak O., 2016. "The effect of policy incentives on electric vehicle adoption," Energy Policy, Elsevier, vol. 94(C), pages 94-103.
    20. Lucas Cain & Danae Hernandez-Cortes & Christopher Timmins & Paige Weber, 2023. "Recent Findings and Methodologies in Economics Research in Environmental Justice," CESifo Working Paper Series 10283, CESifo.
    21. Li,Shanjun & Zhu,Xianglei & Ma,Yiding & Zhang,Fan & Zhou,Hui, 2020. "The Role of Government in the Market for Electric Vehicles : Evidence from China," Policy Research Working Paper Series 9359, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Ye & Yu, Feng & Lin, Faqin & Feng, Kuo, 2025. "Air quality impacts of EV promotion: Evidence from local charging pile adoption in China," Journal of Asian Economics, Elsevier, vol. 98(C).
    2. Li, Guodong & Walls, W.D. & Zheng, Xiaoli, 2023. "Differential license plate pricing and electric vehicle adoption in Shanghai, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 172(C).
    3. Leslie A. Martin, 2022. "Driving on Sunbeams: Interactions Between Price Incentives for Electric Vehicles, Residential Solar Photovoltaics and Household Battery Systems," Economic Papers, The Economic Society of Australia, vol. 41(4), pages 369-384, December.
    4. Shanjun Li & Xianglei Zhu & Yiding Ma & Fan Zhang & Hui Zhou, 2022. "The Role of Government in the Market for Electric Vehicles: Evidence from China," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(2), pages 450-485, March.
    5. Li, Ping & Zhang, ZhongXiang, 2023. "The effects of new energy vehicle subsidies on air quality: Evidence from China," Energy Economics, Elsevier, vol. 120(C).
    6. Hanming Fang & Ming Li & Long Wang & Yang Yang, 2025. "High-Speed Rail and China’s Electric Vehicle Adoption Miracle," PIER Working Paper Archive 25-006, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    7. Kenneth T. Gillingham & Marten Ovaere & Stephanie M. Weber, 2025. "Carbon Policy and the Emissions Implications of Electric Vehicles," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(2), pages 313-352.
    8. Huang, Robert & Kahn, Matthew E., 2024. "An economic analysis of United States public transit carbon emissions dynamics," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    9. Pascal Heid & Kevin Remmy & Mathias Reynaert, 2024. "Equilibrium Effects in Complementary Markets: Electric Vehicle Adoption and Electricity Pricing," CRC TR 224 Discussion Paper Series crctr224_2024_615, University of Bonn and University of Mannheim, Germany.
    10. Roberto Amaral-Santos & Ariaster Chimeli & Joao Paulo Pessoa, 2023. "Natural Gas Vehicles: Consequences to Fuel Markets and the Environment," Working Papers, Department of Economics 2023_07, University of São Paulo (FEA-USP).
    11. Aldy, Joseph E. & Burtraw, Dallas & Fischer, Carolyn & Fowlie, Meredith & Williams, Roberton C. & Cropper, Maureen L., 2022. "How is the U.S. Pricing Carbon? How Could We Price Carbon?," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 13(3), pages 310-334, October.
    12. Adler, David & Severnini, Edson, 2023. "Timing matters: Intra-day shifts of economic activity and ambient ozone concentrations," Journal of Public Economics, Elsevier, vol. 223(C).
    13. Timothy Fitzgerald & Kevin Hassett & Cody Kallen & Casey B. Mulligan, 2020. "An Analysis of Vice President Biden's Economic Agenda: The Long Run Impacts of its Regulation, Taxes, and Spending," Working Papers 2020-157, Becker Friedman Institute for Research In Economics.
    14. Zhang, Junjie & Jia, Rongwen & Yang, Hangjun & Dong, Kangyin, 2022. "Does electric vehicle promotion in the public sector contribute to urban transport carbon emissions reduction?," Transport Policy, Elsevier, vol. 125(C), pages 151-163.
    15. Landry, Joel R., 2025. "How heterogeneity in perceived external benefits differently affects federal and state efforts to address climate change," Energy Economics, Elsevier, vol. 146(C).
    16. Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2020. "Decompositions and Policy Consequences of an Extraordinary Decline in Air Pollution from Electricity Generation," American Economic Journal: Economic Policy, American Economic Association, vol. 12(4), pages 244-274, November.
    17. Soongil Kwon & Yoon-Seong Chang, 2025. "A Study on CO 2 Emission Reduction Using Operating Internal Combustion Engine Vehicles (ICEVs) and Electric Vehicles (EVs) for Rental Vehicles, Focusing on South Korea," Energies, MDPI, vol. 18(11), pages 1-16, June.
    18. Xiao, Xu & Chen, Zi-Rui & Nie, Pu-Yan, 2020. "Analysis of two subsidies for EVs: Based on an expanded theoretical discrete-choice model," Energy, Elsevier, vol. 208(C).
    19. Peter Haan & Adrián Santonja & Aleksandar Zaklan, 2025. "Effectiveness and Heterogeneous Effects of Purchase Grants for Electric Vehicles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(1), pages 185-223, January.
    20. Hill, Alexander, 2025. "The social welfare implications of electrification in the U.S. residential energy market," Journal of Environmental Economics and Management, Elsevier, vol. 131(C).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:198:y:2025:i:c:s0301421524004932. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.