Ashley Nunes is a research fellow at Harvard Law School and director of competition policy at the R Street Institute. In this post, he argues that hybrid vehicles should be at the heart of the Biden government’s plans to combat climate change.
It’s worth owning a car. Research suggests that when a car is in the driveway, revenue increases. But car ownership also has its price. Transportation is a major source of greenhouse gas emissions, and most of these emissions come from coupes, vans and rail cars that take consumers anywhere from work to the grocery store to weekend soccer practice (Editor: Soccer).
Electrification should help. Electric vehicles are less reliant on fossil fuels, and less reliance on fossil fuels means fewer greenhouse gas emissions. This makes electric vehicles a more environmentally friendly alternative to the status quo. But they are also a delicate challenge. The technology remains more expensive than gasoline-powered cars. And few things affect car sales like sticker price.
The solution is supposedly subsidies. Nothing alleviates sticker shock like government handouts. Joe Biden is convinced of it. America’s 46th President recently announced $ 174 billion federal funding to help bring electric vehicles to nirvana. The move, Biden argues, will “unify and mobilize the country” and “reduce the impact of climate change on our children.”
Biden’s efforts have a precedent. Norway has long relied on generous incentives to boost sales of electric vehicles. Since the early 1990s, potential buyers have been annoyed with purchasing benefits such as discounts on local ferries, free access to bus lanes and, above all, relief from the high import taxes on vehicles. The result? Just over 54 percent of all new car sales today are electric cars, a world record and an increase of just one percent a decade ago.
However, reducing emissions requires more than robust sales. What also matters is the intent of potential buyers; how EVs are inevitably used. The picture is not so rosy on these fronts.
Studies show that electric vehicles are largely bought as a supplement, not as a replacement – or, in non-economic terms, as a second car. For the masses, gas guzzlers remain the car of choice (which probably explains why internal combustion engine sales have continued to rise in Norway as well). Additionally, the kilometers traveled in an electric vehicle are pale compared to the miles traveled in gasoline cars, both in Norway and elsewhere.
None of this necessarily makes EV subsidies a bad idea. If the goal is simply to increase EV sales, government handouts are the way to go – in almost every way. But if curbing emissions is taxpayers’ worth (I know I sure do) then subsidizing electric vehicles is a sucker to say the least.
A more pragmatic approach would be to draw hybrid vehicle sales. These vehicles are not nearly as clean as electric vehicles. But hybrids aren’t that expensive either. This makes drawing technology a smarter use of the public purse. In addition, consumers actually enjoy driving hybrids, and these vehicles are a greener alternative to traditional cars.
The affinity for hybrid electric vehicles is particularly high among low- and middle-income households, a segment of the population that often tends to buy more polluting vehicles. Such buying habits are hardly surprising. The masses may care about the planet, but they care even more about saving money. Gas guzzlers are cheaper, at least in the first place, and feeding the family today takes precedence over saving the planet tomorrow.
Green stalwarts may not like the idea of ​​sponsoring hybrids. Combating climate change requires more than just climate policy adjustments. It takes real change. Maybe. On the other hand, big things tend to happen if you get the little things right. .