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The electricity and transportation industries are the main sources of greenhouse gas emissions on Earth. Renewable energy, mainly wind and solar, can reduce emission from the electricity industry (mainly from power plants). Likewise, next-generation plug-in vehicles, which include plug-in hybrid electric vehicles (EVs) and EVs with vehicle-to-grid capability, referred to as “gridable vehicles” (GVs) by the authors, can reduce emission from the transportation industry. GVs can be used as loads, energy sources (small portable power plants), and energy storages in a smart grid integrated with renewable energy sources (RESs). Smart grid operation to reduce both cost and emission simultaneously is a very complex task considering smart charging and discharging of GVs in a distributed energy source and load environment. If a large number of GVs is connected to the electric grid randomly, peak load will be very high. The use of traditional thermal power plants will be economically and environmentally expensive to support the electrified transportation. The intelligent scheduling and control of GVs as loads and/or sources have great potential for evolving a sustainable integrated electricity and transportation infrastructure. Cost and emission reductions in a smart grid by maximum utilization of GVs and RESs are presented in this paper. Possible models for GV applications, including the smart grid model, are given, and results are presented. The smart grid model offers the best potential for maximum utilization of RESs to reduce cost and emission from the electricity industry.