{"id":2082,"date":"2016-01-04T08:42:57","date_gmt":"2016-01-04T00:42:57","guid":{"rendered":"http:\/\/people.utm.my\/haslinasarkan\/?p=2082"},"modified":"2016-01-04T08:42:57","modified_gmt":"2016-01-04T00:42:57","slug":"economists-environmentalists-wrangle-over-ev-incentives","status":"publish","type":"post","link":"https:\/\/people.utm.my\/haslinasarkan\/economists-environmentalists-wrangle-over-ev-incentives\/","title":{"rendered":"Economists, Environmentalists Wrangle Over EV Incentives"},"content":{"rendered":"

The following article is taken from\u00a0this link<\/a>.<\/p>\n

January 3rd, 2016 by Steve Hanley<\/a><\/strong><\/div>\n
<\/div>\n

Last month, representatives from 200 nations around the world gathered in Paris to address the issue of climate change. Many of them believe the only hope for mankind is if the entire world transitions as quickly as possible to electric power and electric vehicles. They think the best way to get more people to buy electric vehicle is to give them significant financial incentives to do so. For them, the size of the incentive is irrelevant.<\/p>\n

How much of an incentive should be given to promote the conversion to electric cars is one that many economists have strong opinions on.\u00a0James Bushnell is an economist at the University of California \u2013 Davis. In December, he posted a long and carefully researched article on the Haas School of Business at Berkeley website.\u00a0Bushnell\u2019s primary question for environmentalists goes like this:\u00a0\u201cIs society getting good value for its money when it provides such generous incentives?\u201d That\u2019s an excellent question and one that has as many answers as the number of people who ask it. In general, the answer is, \u201cIt depends.\u201d<\/p>\n

His article is entitled Economists Are From Mars, Electric Cars Are From Venus<\/a>\u00a0and it\u2019s an interesting read. The substance of his argument is as follows. \u201c[Economists]\u00a0Archsmith, Kendell, and Rapson<\/a>, using $38\/ton as a cost of carbon, estimate the lifetime damages of the gasoline powered, but pretty efficient, Nissan Versa to be $3200. In other words, replacing a fuel efficient passenger car with a vehicle with NO lifecycle emissions would produce benefits of $3200. That puts $10,000 in EV tax credits in perspective.\u201d<\/p>\n

Obviously, no economist worthy of the name would advocate for incentives that exceed their anticipated benefit by a factor of three. To an economist, that is just crazy talk.\u00a0But who says the the cost of carbon is $38 a ton? The EPA sets it at $40, but may other researchers say it should be much higher. They think $200 to $400 a ton is more realistic. If that\u2019s true, that makes a $10,000 incentive to drive a zero emissions car look like an absolute bargain.<\/p>\n

David Roberts, writing for Vox<\/a>\u00a0on December 31, raises some cogent and troubling questions. \u201cHow much is a human life worth? You can\u2019t calculate the benefits of saving one without a number. How much is it worth to avoid a sickness? How much are intact ecosystems worth? How much are other species worth?<\/p>\n

\u201cHow much is a life this year worth compared with a life ten years from now, or 50 years from now? How much weight we give future costs and benefits relative to the present is measured by our \u201cdiscount rate.\u201d Discount rates are particularly important in climate change discussions, where the connections between cause and effect are measured in decades, sometimes centuries. The choice of discount rate can make the difference between a model that counsels urgent action and one that counsels delay.\u201d<\/p>\n

In other words, the answer to how to address climate change is all in how you frame the debate and what questions you ask. Roberts tends to favor more rather than fewer EV incentives. His justification is that EVs have intangible benefits that are difficult to put a dollar value on. More EVs mean the electric grid gets greener, faster. Since electrification of everything<\/em> is the only possible way to avoid climate disaster, let\u2019s stop arguing over numbers and get busy, he says. After all, there won\u2019t be any economists left to argue about these things if we are all dead from breathing poisonous air.<\/p>\n

Roberts last point is that electric cars are popular with voters and politicians. Greening the electrical grid is not. Since EVs enjoy a high approval rating (thanks in large measure to the constant drumbeat in favor of them by Elon Musk), why not put all of society\u2019s eggs in the EV basket, since EVs will necessarily promote the other worthy but less sexy measures the world needs? In other words, isn\u2019t it ultimately better to swim with the current rather than against it?<\/p>\n

Max Weber<\/a> said \u201cPolitics is a strong and slow boring of hard boards.\u201d Roberts calls it \u201ca draining and frustrating business.\u201d If the winds are blowing in favor of electric vehicles, isn\u2019t it wise to take advantage of those breezes, he asks, even if the precisely correct amount of incentives cannot be calculated down to the last penny? \u00a0His final word to practitioners of \u00a0economics, which Thomas Carlyle calls \u201cthe dismal science,\u201d is this: \u201cThere are more things in heaven and earth, Horatio, than are dreamt of in your economics.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The following article is taken from\u00a0this link. January 3rd, 2016 by Steve Hanley Last month, representatives from 200 nations around the world gathered in Paris to address the issue of climate change. Many of them believe the only hope for mankind is if the entire world transitions as quickly as possible to electric power and […]<\/p>\n","protected":false},"author":6477,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[],"class_list":["post-2082","post","type-post","status-publish","format-standard","hentry","category-research-blog"],"_links":{"self":[{"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/posts\/2082","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/users\/6477"}],"replies":[{"embeddable":true,"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/comments?post=2082"}],"version-history":[{"count":0,"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/posts\/2082\/revisions"}],"wp:attachment":[{"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/media?parent=2082"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/categories?post=2082"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/people.utm.my\/haslinasarkan\/wp-json\/wp\/v2\/tags?post=2082"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}