The Unpopular Step That Would Popularize Electric Vehicles

Two words: tax carbon.

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Reuters

Electric vehicles continue to make inroads, if you will, into the American car market. Tesla's Model S — test-driven in a delightful Nate Berg profile for Cities earlier this week — is the car of the moment. The Nissan Leaf had its best month ever in March, selling more than 2,500 cars. But in the larger scheme of U.S. car-ownership, EVs still represent just a fraction of the cars sold each year, and a smaller fraction of all the cars on the road.

There is a pretty direct way to popularize zero-emission cars, but in political terms it would be a very unpopular step: issue a carbon tax. Owning a traditional fuel-engine car would become much less appealing if its sticker or gas prices included the cost done to the environment. Transport scholar David Levinson makes the argument in the May-June issue of Foreign Affairs:

A better, although more politically difficult, policy would be to charge those who burn gasoline and diesel fuel for the full economic and social cost of their decision. Right now, pollution is essentially free in the United States; drivers don’t pay anything for the emissions that come from their tailpipes, even if they’re driving a jalopy from the 1970s. If the government were to charge people for the health-damaging pollutants their cars emit and enact a carbon tax, the amount of pollution and carbon dioxide produced would fall. Consumers would drive less, retire their old clunkers, and be more likely to purchase electric vehicles.

Right now American drivers do pay a gas tax every time they stop at the pump. The gas tax could deter fuel consumption in an indirect way, but it's far too weak to do so at the moment. That's because the gas tax hasn't been raised in decades, despite inflation and rising construction costs. As a result, the tax is no longer capable of handling its primary job — paying for roads — let alone a secondary one like disincentivizing carbon emissions.

The most likely outcome of the current gas tax crisis will be modestly raising the gas tax. That will delay the problem, rather than solve it. One of the most promising long-term solutions is a vehicle-miles fee, in which drivers pay for the amount they travel rather than the gas they consume. This reduces driving at large but fails to favor EVs over traditional cars; still, in this less-than-hypothetical scenario, there's nothing to stop policymakers from imposing a carbon tax directly at the pump.

Even without an overhaul to the gas tax or the implementation of a carbon tax, electric vehicles will keep gaining interest among American consumers. Range anxiety is the biggest barrier at the moment, but it's not an insurmountable one. Studies show the fears of running out of power diminish considerably with just three months experience in an EV. As more Americans gain that experience and share it with others, this cultural concern only stands to decrease.

Construction of a network of (preferably high-speed) charging stations, especially in and around metro areas, would also do the job. There's always been a bit of a chicken-and-egg dilemma to that idea: no one wants to build such a network until there are enough EV owners, and no one wants to own an EV until such a network is built. But the two sides have been meeting in the middle of late, with Tesla's Supercharging network leading the way, and meanwhile portable charging stations have emerged in some cities as a viable option.

Levinson concludes that cars are at a historical juncture similar to the one they faced a little more than a century ago. Back then the fuel-engine (thanks largely to invention of a self-starter) emerged from a group of competitors that included electric- and even steam-powered cars. Tomorrow's winner may not be clear, but the mere fact that the contest has reopened is some form of progress.

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