Yale economist William Nordhaus puts it well in his new book on the economics of climate policy:
Whether someone is serious about tackling the global-warming problem can be readily gauged by listening to what he or she says about the carbon price. Suppose you hear a public figure who speaks eloquently of the perils of global warming and proposes that the nation should move urgently to slow climate change.
Suppose that person proposes regulating the fuel efficiency of cars, or requiring high-efficiency lightbulbs, or subsidizing ethanol, or providing research support for solar power — but nowhere does the proposal raise the price of carbon. You should conclude that the proposal is not really serious and does not recognize the central economic message about how to slow climate change.
To a first approximation, raising the price of carbon is a necessary and sufficient step for tackling global warming. The rest is at best rhetoric and may actually be harmful in inducing economic inefficiencies.
There are two ways of viewing hybrid cars. From a hardline carbon abatement position, they’re a distraction from the real challenge of dealing with climate change, which requires a significant increase in the price of carbon. They’re only slightly more fuel efficient than most vehicles, and anyway, plug-in hybrids in a country like Australia will use coal-generated electricity to charge up.
The critical challenge in transport — which must be included in an emissions trading scheme — is to ensure people have access to viable alternatives to cars, which means investment in mass transit, enabling them to respond to increases in the cost of transport by switching modes.
A realist position probably accepts all that, but acknowledges that Australians are still too wedded to their cars and Governments are too slow to provide public transport, to seriously consider alternatives to an entire lifestyle based on motor vehicles. Hybrid vehicles, especially if they pave the way for lower or no-emission vehicles in the future, can provide a transitional mechanism to a low-carbon future while we carbon junkies make the mental leap to other forms of transport, or wait for our politicians to do so.
We wealthy carbon junkies, that is, because the poorer amongst us probably can’t quite stretch their budgets to afford a hybrid. And many low-income earners live in areas with the worst public transport.
Problem of course is that our policy settings don’t really reflect either of these positions. In fact, they’re a self-contradictory mess. As Greens Senator Christine Milne says, while welcoming the hybrid announcement, the Government has “a policy platform which is still skewed very heavily in favour of the polluting and gas-guzzling options.”
We’re still investing heavily in roads over rail and public transport. We encourage company car use via fringe benefit tax concessions. We still subsidise the manufacture of regular, petrol hungry automobiles. And in the meantime, we wait for the Government to work out what’s in and what’s out of an emissions trading scheme that won’t kick off until 2010.
Democracies, it seems, aren’t very good at coping when one of the basic parameters of their entire social and economic framework changes. The unedifying spectacle of our politicians arguing the toss over 2 cents a litre versus 5 cents a litre the other week confirms that. Attracting hybrid manufacturing to Australia is undoubtedly a canny political ploy by the Government. Quite apart from anything else, those vehicles come with a green aura that seems impervious to any scepticism. But they’re not going to do much to address climate change.
Shame that Kev the Rudd’s timming to bless Toyota with such a generous amount was a little premature when the ‘good oil’ round town is that the compnay had intentions to move into the local hybrid market anyway… A few interesting facts on hybrids and the local elec energy market, given that the ideal is to move away from coal fired relics to gas fired base load stations planned for the future with supplimentary supply from current & proposed wind farms into the eastern seaboard grid.
The hybrid cars being produced with their current design limitations (“no-plug & play”) can be converted relatively straight forwards to a ‘plug-in’ & drive with the petrol engine as a back up.
But of course as the realists would argue that is an option for only the green enthusists & eccentrics rather than a solution for the masses who couldn’t ever afford to it, however such a conversion would be only slightly more expensive as converting a petrol powered car to LPG/CNG.
Thanks ad astra – that’s why I said plug-in hybrids WILL use electricity. I don’t believe there are any plug-ins commercially available currently, but are expected in the next few years. Sorry for the lack of clarity.
I drive a Honda Hybrid and am very happy with it. I do not understand why they are so expensive. My car has no normal generator or starter motor and uses a conventional CV transmission similar to a Mitsubishi Lancer. The electric drive motor shouldn’t cost very much more than the combined savings from deleting the generator and starter. That only leaves the high voltage battery pack and the computer control components (which would be similar in cost to the cards in my computer). Admittedly there are a few other goodies fitted to my car but I would be reasonably sure that the actual production cost for a basic hybrid would be more that 4-5% more expensive than a basic car. I think it is like the automatic versus manual pricing. In my view a clutch mechanism with a gear box with five speed and synchromesh would be as expensive to produce as the metal pressings of a toyque converter and powder metallurgy gears and forgings etc of an automatic gear box.
A small correction. Toyota hybrids do not require charging from coal-generated electricity. They charge their batteries by converting kinetic energy generated during braking to electrical energy. It would be a pity if your otherwise well-researched articles were depreciated by inaccurate facts.
Democracy could mean the people agreeing to follow a leader in a particular direction. We are woefully beset by governments who expect that you can run the country as a giant focus group.