Vehicles significantly impact the environment. According to the United States Environmental Protection Agency (EPA), 29% of the total greenhouse gas emissions in the country in 2021 were from transportation activities. These emissions contribute to environmental degradation — specifically air pollution, climate change and global warming — and impact your health and finances.
The financial impacts may be direct or indirect, from your bills — including food, utilities, gas, health costs and insurance — to possible loss of income or home due to extreme weather events. As we face different challenges brought about by climate change, making more responsible choices is necessary, especially concerning vehicle usage.
Understanding how driving habits contribute to global warming, as well as the auto insurance perks of going green with environmentally-friendly vehicles, is a good start. Although more significant action from government and companies is needed, these individual actions could still make a big difference.
Vehicles and Global Warming Statistics
Vehicle emission is one of the largest contributors of greenhouse gas emissions in the country. The impact of climate change poses environmental, economic and financial risks.
The U.S. recorded a total of 5.6 million metric tons of carbon dioxide (CO2) equivalent in net greenhouse gas emissions in 2021. Transportation was 29% of total emissions.
In the U.S., about 79% of total emissions are from CO2. A typical passenger vehicle emits 4.6 metric tons of CO2 per year, on average.
Aside from CO2, motor vehicles emit other greenhouse gases like methane and nitrous oxide. In the U.S., methane contributed 12% of emissions and nitrous oxide accounted for 6%.
Since 2010, we've seen the 10 warmest years on record, nine of which were between 2014–2022. Countries across the globe continue to record higher-than-average temperatures and weather anomalies.
Climate change poses an economic threat in terms of agricultural productivity, energy use and demand, labor supply, mortality and storm activity. Severe heat waves, coastal flooding and other weather disasters cost the country more than $165 billion in 2022.
On a personal level, climate change heightens financial risks in real estate, insurance, asset values, investments and cash flows.
Sources:
Board of Governors of the Federal Reserve System; Brookings Institution; Environmental Protection Agency: Inventory of U.S. Greenhouse Gas Emissions and Sinks; Environmental Protection Agency: Tailpipe Greenhouse Gas Emissions from a Typical Passenger Vehicle; National Centers for Environmental Information; White House
How Much Greenhouse Gas Is Released by Vehicles?
Greenhouse gas emissions, including carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O) emissions, contribute to environmental degradation. In the U.S., transportation activities cause the most emissions at 29%. According to the EPA, a typical passenger vehicle emits 4.6 metric tons of CO2 annually.
Net emissions increased by 6% compared to the 2021 total, mainly due to increased economic activity after the slowdown at the height of the COVID-19 pandemic. Overall, total emissions from the transportation sector grew 19% from 1990 to 2021.
Carbon dioxide emissions from energy consumption fluctuate as consumption levels regularly change. Petroleum remains the highest contributor to CO2 emissions in the industry. Although much lower, emissions from natural gas showed a consistent increase throughout the years.
Sources of CO2 Emissions in the Transportation Sector
Greenhouse Gas Emissions by Sector
In 2021, the transportation industry had the highest greenhouse gas emissions in the country among all economic sectors, up 18.6% since 1990. Year-over-year, emissions increased as economic activity grew, dropping after the COVID-19 pandemic slowdown in 2020. The 2021 total is slightly lower than the 2016, 2017, 2018 and 2019 numbers but trends upward. Historically, greenhouse gas emissions in the transportation sector peaked in 2007 when it recorded 1,967.25 million metric tons of carbon dioxide equivalent.
Transportation Contributes the Most Greenhouse Gas Emissions in 2021
Transportation CO2 Emissions by State
In 2020, Texas recorded the highest energy-related CO2 emissions in the U.S., with 624 million metric tons, including 192.7 million metric tons from transportation. Vermont had the lowest total CO2 emissions, recording only 5.6 million metric tons, with transportation-related emissions accounting for 2.9 million metric tons.
The map below shows total CO2 emissions per state.
Emissions Across Vehicle Types
Vehicles are among the highest contributors of greenhouse gas emissions, but not all vehicles emit the same amount. Factors such as engine technology, fuel type, usage patterns and vehicle size all affect emissions. Among on-road vehicles, light-duty trucks have the highest greenhouse gas emissions in 2021 at 671.8 million metric tons of CO2 equivalent. They're followed by medium- and heavy-duty trucks (417.1 million metric tons), passenger cars (374.2 million metric tons), buses (25.7 million metric tons) and motorcycles (7.5 million metric tons).
Passenger cars
These include light-duty vehicles, which have a maximum gross vehicle weight rating (GVWR) of <8,500 lbs., and medium-duty vehicles (8,501–10,000 lbs.). Generally, the EPA considers a vehicle a passenger car if it’s primarily used for transporting 12 people or less. In 2021, passenger cars recorded the third-highest greenhouse gas emissions among on-road vehicles at 374.2 million metric tons. Aside from vehicle type, emissions also vary per fuel type.
Here's a breakdown of light-duty vehicle emissions reported by the Bureau of Transportation Statistics (BTS).
Estimated Average Emission Rate (Grams per mile) | Gasoline | Diesel |
|---|---|---|
Total hydrocarbons (HC) | 0.280 | 0.143 |
Exhaust carbon monoxide (CO) | 4.152 | 3.640 |
Exhaust nitrogen oxides (NOx) | 0.192 | 0.129 |
Exhaust particulate matter with diameter <= 2.5 micrometers(PM2.5) | 0.004 | 0.002 |
Brake wear PM2.5 | 0.003 | 0.003 |
Tire wear PM2.5 | 0.001 | 0.001 |
Light-duty trucks
Light-duty trucks refer to vehicles that carry passengers and cargo. These include sport utility vehicles (SUVs) and minivans. In 2021, light-duty trucks across the country produced 671.8 million metric tons of CO2 equivalent emissions. The EPA also reported that light-duty trucks traveled more than 1,492,200 million miles in the same year.
The table below shows the differences in estimated average emission rates between gasoline- and diesel-fueled light-duty trucks.
Estimated Average Emission Rate (Grams per mile) | Gasoline | Diesel |
|---|---|---|
Total HC | 0.339 | 0.308 |
Exhaust CO | 5.422 | 2.458 |
Exhaust NOx | 0.376 | 1.804 |
Exhaust PM2.5 | 0.007 | 0.078 |
Brake wear PM2.5 | 0.003 | 0.003 |
Tire wear PM2.5 | 0.001 | 0.002 |
Medium- and heavy-duty trucks
Total emissions of medium- and heavy-duty trucks in 2021 reached 417.1 million metric tons of CO2 equivalent, making them the second-largest contributor among on-road vehicles. During the same year, these vehicle types traveled 317,245 million miles. Falling under this category are single-unit trucks, combination trucks, tractor-trailers and box trucks used for freight transportation and some vehicles not typically used for freight movement, such as service and utility trucks.
The table below shows the differences in emission rates between gasoline- and diesel-fueled heavy-duty vehicles.
Estimated Average Emission Rate (Grams per mile) | Gasoline | Diesel |
|---|---|---|
Total HC | 1.161 | 0.269 |
Exhaust CO | 14.894 | 2.000 |
Exhaust NOx | 0.875 | 4.169 |
Exhaust PM2.5 | 0.026 | 0.106 |
Brake wear PM2.5 | 0.006 | 0.009 |
Tire wear PM2.5 | 0.002 | 0.004 |
Buses
Buses were the fourth-highest contributor of greenhouse gas emissions. They totaled 25.7 million metric tons of CO2 equivalent or 1.3% of all emissions. Specifically, bus emissions include 25.1 million metric tons of CO2, 0.2 million metric tons of nitrous oxide and 0.4 million metric tons of various hydrofluorocarbons (HFC).
Motorcycles
Motorcycles had the lowest greenhouse gas emissions among on-road vehicles. In 2021, motorcycles totaled 7.5 million metric tons of CO2 equivalent. Specific emission rates for typical motorcycles are as follows:
Estimated Average Emission Rate (Grams per mile) | Gasoline |
|---|---|
Total HC | 2.624 |
Exhaust CO | 13.411 |
Exhaust NOx | 0.642 |
Exhaust PM2.5 | 0.021 |
Brake wear PM2.5 | 0.002 |
Tire wear PM2.5 | 0.001 |
Far-Reaching Impacts of Automobile Emissions
In 2022, the world recorded its sixth-warmest year since 1880, ten of which have occurred since 2010. During this period, the world has witnessed climate anomalies like rising seas, droughts and severe flooding. Temperature changes throughout the years can be attributed to global warming caused by greenhouse gas emissions. Although there are multiple sources of emissions, motor vehicles produce some of the highest emissions. In the U.S., the transportation industry has the highest impact among all energy sectors.
The devastating effects of car emissions aren't restricted to weather-related events. Climate change also has an indirect effect on the economy, health and personal finance. Home values may decrease, utility bills may increase, and even insurance costs may go up due to higher risk of property damage from extreme weather events.
Air pollution
Burning fossil fuels, such as gasoline and diesel used for cars, releases various pollutants like particulate matter (PM) and volatile organic compounds (VOCs) into the air. Vehicle emissions also cause greenhouse gases like CO2, NOx, CH4, N2O and HFC to build up, all of which contribute to poor air quality and the warming of the Earth's atmosphere.
Health impacts
Exposure to pollutants like PM and VOCs, as well as greenhouse gases, may lead to various health issues, including respiratory problems, cardiovascular diseases and increased cancer risks.
Environmental degradation
Pollution from vehicle emissions also spreads to soil and water. Greenhouse gases deplete the ozone layer, reducing the Earth's protection against ultraviolet radiation. Greenhouse gases mixing with rainwater create acid rain, which harms flora and fauna. Oil spills from vehicles penetrate the soil and PM from emissions contaminate bodies of water.
Noise pollution
Humans and wildlife may develop health issues due to vehicle-caused noise pollution. Regular exposure can disturb sleep patterns, cause stress and even increase the risk of developing heart disease.
Economic costs
Economic implications of vehicle emissions include more expensive health care costs due to pollution-related diseases, additional expenses for infrastructure maintenance, material losses due to extreme weather events, higher utility bills and increased in home insurance premiums.
Driving Green: How to Reduce Emissions
Cars, including passenger vehicles, play a massive role in global warming. They're among the major sources of greenhouse gas emissions. This isn't exclusive to the U.S. The transportation sector contributes 16.2% of all greenhouse gas emissions globally. Of these, 11.9% are from on-road vehicles.
Although it may seem minuscule, an individual's efforts can significantly impact if more people participate. With more responsible car owners opting for more sustainable choices, such as choosing a fuel-efficient vehicle, reducing vehicle usage and practicing eco-friendly driving habits, car emissions may decrease, air quality may improve, dependence on fossil fuels may reduce and overall environmental sustainability may be enhanced. The United Nations further highlighted the need to take action as achieving sustainable transport is also part of the sustainable development goals under the Paris Agreement on Climate Change.
Here are a few steps car owners can take to reduce carbon footprints:
Regular vehicle maintenance
One of the best ways to keep a car efficient is to ensure proper maintenance. Plan regular tune-ups, follow your manufacturer's maintenance schedule and use only recommended products like motor oil.
Eco-friendly driving practices
Being an efficient driver can significantly reduce emissions in the long run. Take it easy on the gas pedal and brakes. Avoid unnecessary idling, which causes air pollution and excess wear and tear. You should also monitor your car's temperature. If possible, reduce the use of your air conditioner as this further contributes to emissions.
Finding alternative transportation options
Ask yourself if taking your car out and driving to your destination is necessary. For short distances, consider walking or riding a bicycle. Try taking public transit or carpooling with colleagues or friends for longer commutes.
Supporting renewable energy sources
If you're thinking of buying a car or replacing your current vehicle, consider more fuel-efficient vehicles with low emissions like EVs, plug-in hybrid EVs, hydrogen fuel cell vehicles and cleaner burning gasoline vehicles. These won't only help lower emissions but may also help you save money on fuel costs.
Raising awareness and advocating for change
Supporting advocacies can help increase public awareness and entice more people to participate. You may start with small steps like sharing information materials and public service ad campaigns from government agencies and nonprofits.
CARBON FOOTPRINT CALCULATORS
Calculating your carbon footprint can help you visualize the extent of your emissions, especially regarding home energy, waste and transportation. This can help you better plan how to reduce your carbon footprint.
You can visit the EPA's Carbon Footprint Calculator and enter your ZIP code and the number of people in your household to get a quick estimate. You may also download a spreadsheet version to see how emissions are calculated. Another option is The Nature Conservancy's online interactive tool.
Reducing Your Carbon Footprint With Green Auto Insurance
Auto insurance provides financial protection against unexpected incidents. But depending on the policy, this may come at a high price. Many auto insurance providers offer green or eco-friendly auto insurance, in which green efforts are rewarded with discounts. Green car insurance may also refer to programs that allow you to pay premiums based on how much you drive.
Benefits of Green Auto Insurance
The principle behind green auto insurance is to promote sustainable driving practices by offering incentives to drivers who adopt environmentally responsible practices. Among common offers by green insurance providers is a specialized coverage option for low-emission vehicles like hybrid and electric cars. For instance, insurers may provide higher coverage limits for replacement parts and repairs than traditional policies. Carriers might also offer additional coverages, such as batteries and power cables, or create incentive programs to help green drivers save money on insurance.
Usage-Based Auto Insurance
For some insurance companies, green auto insurance comes from usage-based policies. With this, you'd only pay insurance for how much you drive. For example, the fewer miles you accumulate, the lower your premium. This is a way to reward drivers who reduce their car emissions and practice eco-friendly driving, such as smoother acceleration and braking and avoiding peak traffic hours.
Pay-as-you-drive programs generally work by installing a mileage-tracking device in the vehicle. Those enrolled in these programs usually get policy discounts if they drive fewer miles than average.
Additional Incentives for Sustainable Driving
Incentivizing more environmentally-friendly transportation choices is a way to encourage more individuals to go green. Aside from pay-as-you-drive programs and specialized coverages, insurance providers that promote green auto insurance also offer other rewards.
Green vehicle premium discounts
Choosing to drive a hybrid or EV may help lower the cost of auto insurance.
Alternative fuel premium discounts
Some insurance providers offer significant discounts to drivers using alternative energy sources, such as biodiesel, natural gas, hydrogen, ethanol or electricity.
Green vehicle replacement
If your gasoline-powered vehicle gets totaled in an accident and you decide to replace it with an electric or hybrid car, green vehicle replacement coverage will help cover the costs.
Paperless discount
Another way to reduce car insurance costs is to opt for paperless billing. Many insurance providers offer this type of discount.
Green Wheels: How to Choose an Environmentally-Friendly Vehicle
Throughout the years, efforts to address climate change have expanded to various industries. In the transportation sector, the availability of more eco-friendly vehicles in the automotive market provides consumers with more sustainable alternatives. Eco-friendly vehicles run using alternative energy options or are more fuel efficient.
There are various benefits to an eco-friendly vehicle. Energy-efficient cars tend to have less greenhouse gas emissions. They may also help reduce expenses in the long run as you decrease fuel consumption. Here's what to consider if you're thinking about making the switch to an eco-friendly vehicle.
1
Size and weight
Generally, eco-friendly cars are lighter than traditional vehicles. That's because lighter vehicles have more aerodynamics and provide better gas mileage. That said, it's still important to consider your transportation needs when deciding on the car's size and weight.
2
Personal needs and preferences
Evaluate your transportation needs. Select a vehicle that will accommodate them. Consider your commuting habits. You can start shopping online by comparing different classes and models.
3
Safety features
Safety should be one of your priorities when choosing a car. Find a car with accident prevention devices like radar alerts and lifesaving seat belts.
4
Fuel efficiency and emissions
Check if you can access alternative fuel sources, such as biodiesel. This tends to help reduce greenhouse gas emissions from renewable resources. The availability of charging stations can also expand your options to include EVs. Meanwhile, a hybrid car allows you to drive using gas and electricity.
5
Vehicle lifespan and maintenance
A well-maintained car is more efficient. So, maintenance and lifespan are among the essential considerations you need to consider when choosing a car. For instance, a conventional car running on fuel has an internal combustion engine that requires regular maintenance. This could cost you a lot in the long run. On the other hand, an EV may require you to purchase a replacement battery pack after a certain period.
6
Financial considerations
Another important factor to consider is your financial situation. When comparing cars, make sure you already have a budget in mind. This will help narrow down your options.
Expert Insight on Vehicles and Climate Change
Choosing to go green is a huge decision that requires commitment. MoneyGeek asked a few industry experts to provide some insights to help you better understand the correlation between vehicles and climate change.
- What resources and tools do you recommend to people who want to reduce their greenhouse gas emissions?
- Driving green may come with expenses. Any tips to help drivers reduce emissions without breaking the bank?
- How can drivers best maximize the benefits of driving green?
Robert K. KaufmannProfessor at Department of Earth & Environment at Boston University
Gilbert Michaud, Ph.D.Assistant Professor of Environmental Policy at the School of Environmental Sustainability at Loyola University Chicago
Kartik AriyurLecturer, School of Mechanical Engineering at Purdue University
Shakaya CooperElectrify Your Ride Program Associate at Generation180
Andrew KuttowEditor-in-Chief of lambocars.com
Additional Resources
Being informed about how cars affect global warming and educating yourself about possible solutions can help you start your journey to driving green. MoneyGeek listed some resources you may find helpful.
- AAA Electric Vehicle Range Testing: Compare the driving range of different EVs in the country. Find out what factors affect their driving range.
- AirNow: Enter your ZIP code, city or state and get air quality data.
- Center for Climate and Energy Solutions: Get tips on reducing transportation emissions. Check out other ways to reduce your home and work carbon footprint.
- Fueleconomy.gov: Compare cars' EPA ratings and features and see which is best for your needs. Access driving and gas mileage tips to become a more efficient driver.
- Health Effects Institute: Read studies about air pollution, common sources and health effects of long-term exposure.
- Kelley Blue Book: Search for cars for sale near you. Read reviews and compare different car types, models and prices.
- NASA Global Climate Change: Learn more about climate change, its causes, effects, global warming and what can be done to solve the problem. Monitor global temperature changes and carbon dioxide levels.
- National Conference of State Legislatures: Check out state policies on hybrid and EVs. Learn which states offer incentives.
- U.S. Department of Energy: Find resources on energy and fuel efficiency.
- U.S. EPA's Green Vehicle Guide: Find out what SmartWay Certified vehicles are and how they can help reduce greenhouse gas emissions. Search for SmartWay vehicles based on model year, make and vehicle class.
- U.S. EPA's Vehicle Emissions Inspection and Maintenance: General information for motorists: Learn about vehicle inspection and maintenance programs. Access relevant state and local government websites.
About Nathan Paulus
Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.
Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.
sources
- Board of Governors of the Federal Reserve System. "Climate Change and Financial Stability." Accessed June 15, 2023.
- Brookings Institution. "Ten Facts About the Economics of Climate Change and Climate Policy." Accessed June 15, 2023.
- Harvard Health Publishing. "How Noise Pollution May Harm the Heart." Accessed June 16, 2023.
- National Centers for Environmental Information National Oceanic and Atmospheric Administration. "Global Temperatures." Accessed June 15, 2023.
- Our World in Data. "Sector by Sector: Where Do Global Greenhouse Gas Emissions Come From?." Accessed June 16, 2023.
- United Nations Department of Economic and Social Affairs. "Sustainable Transport, Sustainable Development." Accessed June 19, 2023.
- United States Department of Transportation Bureau of Transportation Statistics. "Estimated U.S. Average Vehicle Emissions Rates per Vehicle by Vehicle Type Using Gasoline and Diesel." Accessed June 16, 2023.
- United States Energy Information Administration. "June 2023 Monthly Energy Review." Accessed June 15, 2023.
- United States Environmental Protection Agency. "Data Highlights: Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990–2021." Accessed June 15, 2023.
- United States Environmental Protection Agency. "Green Vehicle Guide: Tailpipe Greenhouse Gas Emissions from a Typical Passenger Vehicle." Accessed June 15, 2023.
- United States Environmental Protection Agency. "Greenhouse Gas Inventory Data Explorer." Accessed June 15, 2023.
- United States Environmental Protection Agency. "Sources of Greenhouse Gas Emissions." Accessed June 15, 2023.
- United States Environmental Protection Agency Office of Transportation and Air Quality. "Fast Facts: U.S. Transportation Sector Greenhouse Gas Emissions 1990–2021." Accessed June 16, 2023.
- Whitehouse.gov. "The Importance of Measuring the Fiscal and Economic Costs of Climate Change." Accessed June 15, 2023.
