The Nissan Leaf: an affordable electric car?
The environmentalist’s dream seems tantalizingly close today with the unveiling of the Nissan Leaf, a plug-in car that will go 100 miles on a single charge, priced at $25,000.
Yes, there’s a catch. What drove the price down was a breakthrough in battery technology -- plus federal tax credits for consumers. So while they’re relatively affordable, they’re still pretty expensive to produce.
Sure, tax credits might actually get people to buy the cars. But is this the best strategy for cutting emissions? The answer is probably “no.”
A recent study from Harvard’s Belfer Center for Science and International Affairs finds that purchase tax credits are pretty ineffective at actually cutting transportation-sector emissions, and they “require excessive government expenditure.” Among other things, the report’s modeling finds that purchase tax credits tend to “impede conventional fuel economy improvement.” That’s because car makers have to meet fuel economy standards that average across their vehicles. Stimulating the purchase of some extremely clean cars means that manufacturers can produce conventional cars that have relatively low fuel economy and still meet those standards.
In terms of emissions reduction, doing nothing isn’t better than providing such tax credits. And in the long term, there are more efficient ways to bring down transportation emissions and oil use: imposing stronger fuel-efficiency standards, putting a reasonable price on carbon or, by far the most effective, steadily raising the gas tax.
Environmentalists claim that alternative cars will be cost-competitive with conventional cars, once you factor in savings on gas. Perhaps -- but if that’s so, it should be without tax credits distorting the price of the vehicles, and with a higher gas tax. That arrangement would simply encourage people to use less gas and provide incentives for researchers to come up with the sorts of technological breakthroughs -- such as better batteries -- that make cleaner cars more affordable to produce.
| March 30, 2010; 3:52 PM ET
Categories: Stromberg | Tags: Stephen Stromberg
Save & Share: Previous: President Obama still wants to work with Republicans
Next: Will Haiti tap its overseas talent?
Posted by: gary4books | March 31, 2010 5:56 AM | Report abuse
Posted by: mv2005 | March 31, 2010 2:15 PM | Report abuse
Posted by: steven14 | March 31, 2010 7:57 PM | Report abuse
The comments to this entry are closed.