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How did federal policy undo the beneficial effects of alternative-fuel vehicles?

Answer: By allowing regular-fuel vehicles to be dirtier

All automakers in the U.S. are required by federal policy to keep their fleets beneath an average fuel consumption level. But automakers that include alternative-fuel vehicles in their fleets are permitted incentives, including one that relaxes that standard of average fuel consumption.

The result, according to new research from Carnegie Mellon University, is that alternative-fuel vehicles indirectly cause more greenhouse gas emissions, because companies that sell them are allowed to make their other vehicles dirtier. Each time an alternative fuel vehicle is sold, U.S. fleet-wide emissions grow by up to 60 tons of carbon dioxide, and gasoline consumption increases by up to 7,000 gallons, depending on the vehicle.

"This effect peaks for electric vehicles in 2017, when the policy has its largest incentives," Inês Azevedo, an associate professor of engineering and one of the paper’s publishers, told Phys.org. "When one consumer buys an electric vehicle, it enables other consumers to buy higher-emitting vehicles than they would have been able to otherwise. In total, we estimate about 30 to 70 million metric tons of extra carbon dioxide emitted."