Tax carbon, don't subsidize electric cars, and we all win

Visitors watch the Audi E-Tron electric-powered sports concept car at this month’s Paris Auto Show. Electric cars have come and gone. A carbon tax would make them prove their merits.

Associated Press

Visitors watch the Audi E-Tron electric-powered sports concept car at this month’s Paris Auto Show. Electric cars have come and gone. A carbon tax would make them prove their merits.

Designed especially for city and suburban motoring, this handsome automobile is smooth, quiet and easy to drive, and being powered by electricity it can be charged up at home. Tempting? The sales pitch is not for one of the new electric cars from General Motors, Nissan or Renault, but for a 1905 Victoria Phaeton from Studebaker of South Bend, Ind.

Electric cars have come and gone over the years. Usually an oil crisis has given them a boost; this time it is a combination of oil prices, fears about energy security and climate change.

A decade ago the Toyota Prius took hybrid cars into the mainstream. Two years ago Elon Musk's Tesla all-electric sports car made them sexy. Now the big car firms are pushing all-electric cars for the mass market. At the Paris Motor Show this month they unveiled electric vehicles of all shapes and sizes. Some go on sale in the next few months.

This represents a huge leap forward for the industry, but the showroom patter will be misleading, for two reasons. First, although electric cars are nippy, stylish and as easy to drive as conventional vehicles, electric motoring has some distinct disadvantages. Second, they are not really as green as their promoters claim.

The idea of recharging an electric car at home for only a few dollars and never again having to visit a filling station is enticing. For most journeys, the limitations of battery capacity are irrelevant. As salesmen will be quick to point out, 99 percent of the time people do only short runs — the daily commute, trips to the shops and to pick up the children — all of which are well within the range of most electric cars.

But that final 1 percent of journeys presumably includes the summer holiday when people pile into the car and head off for the coast. Hopping on the train or plane laden with suitcases and children may not be an attractive alternative. And even the relatively short ranges that salesmen advertise may be optimistic. On a cold, wet night when lots of electrical systems are running and the vehicle is laden with passengers and luggage, a car may lose around a third of its supposed range.

Carmakers are taking different approaches to these limitations. The Nissan Leaf is powered only by a battery. Once it has traveled 100 miles or so, the battery needs recharging, which can take some eight hours. By contrast, the Chevrolet Volt's battery has less than half that range, but it carries a gas-powered generator which gives the car another 300 miles. Micro cars with just two seats and ranges of only around 30 miles are also coming: They will charge quickly and work well in crowded cities. But for a combination of cheapness and efficiency, a gasoline-powered car is hard to beat.

And what of electric cars' environmental credentials? Electric cars are being hugely subsidized by taxpayers — up to $7,500 in America — on the ground that they are zero-emission vehicles. Makers of electric cars claim that this is an efficient way to reduce greenhouse-gas emissions. Road transport accounts for a tenth of such emissions worldwide; the sorts of biofuels currently in use are not much greener than gasoline; and next-generation bio-fuels are proving slow to come to the market.

Although electric cars may not themselves produce greenhouse gases, generating the electricity they use does. How green they are depends on the fuel mix at the power plants in the country in which they are driven. Even if the generating mix gets greener, electric vehicles are so expensive to produce, that they will still be a relatively costly way of abating CO2 emissions.

Skeptics therefore doubt that the subsidy is a good use of public money. The only efficient way to cut greenhouse-gas emissions is to impose a carbon tax. If electric cars are a good way of reducing emissions, a carbon tax will enable them to flourish. Taxes, of course, are not as popular as subsidies. But subsidies are almost always a waste of public resources. At this particular time, throwing more taxpayers' money at the car industry seems a daft thing to do.

Tax carbon, don't subsidize electric cars, and we all win 10/10/10 [Last modified: Sunday, October 10, 2010 5:30am]

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