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Science Technology and the Economic Future edited by Susan Raymond
Robert B. Bell
Vice President, ConEdison
Based on remarks delivered to the New York Academy of Sciences, October 17, 1995.
Nothing is ever simple. Innovations often present both opportunities for change and improvement and problems for existing relationships and societal priorities. Electric vehicles, and the various means for encouraging their use, are no exception.
Competitive Implications of Mandates
It is very important to understand the competitive implications of mandates for electric vehicles. The mandate originally envisioned by the Ozone Transport Commission would have required that 2% of all light-duty vehicles sold must be zero-emission vehicles in all states from Virginia to Massachusetts. That mandate would have increased the proportion to 5% in 2001 and 10% in 2003. If the vehicles are not in demand, however, and a mandate applies in one
state and not in a contiguous state, the mandate becomes an economic burden. It becomes a cost of doing business that is not shared across state boundaries. If, for example, New York implemented mandates and New Jersey did not, New Jersey businesses would not have to bear the financial burden of retooling transport vehicle fleets, and New York businesses would be sorely tempted to move to New Jersey. For electric utilities in New York, which sell electricity to businesses, this would be among the worst of possible outcomes. It is critical to understand the long-term implications of mandate strategies before embarking on legislation.
Battery Research—United States Advanced Battery Consortium
One of the most important technology problems impeding the spread of electric vehicles is the state of research on batteries. The largest research effort is being led by the United States Advanced Battery Consortium, which is sponsored by the U.S. Department of Energy and comprises the auto industry, especially Ford, General Motors, and Chrysler; electric utilities; and battery suppliers. The research program is funded at about a quarter of a billion dollars and is divided into two parts. The mid-term battery program is focused on gradually increasing the driving range of electric vehicles in all types of weather and temperature conditions. The long-term program is targeted at strategies to develop batteries that will allow electric vehicles to perform at a level near that of gasoline-powered vehicles. In either case, however, the research is not likely to produce marketable results by 1998. We just do not yet have the research answers that will allow us to solve the battery problem. As the U.S. Government Accounting Office noted in 1995, "the benefits of long term electric vehicle batteries are as yet uncertain, while the benefits of mid-term batteries are unclear although their feasibility has been demonstrated... [H]owever, it remains unclear whether the feasibility of a long-term battery will be demonstrated." 1 Rushing to mandates will force the production of cars that do not have the capacity that the market expects, and hence will both disappoint the market and force the purchase and use of vehicles that will be less efficient than gasoline alternatives.
Conflicts in Goals
It is important to recognize that, as much as everyone supports the development of electric vehicles, there are and will continue to be conflicts over goals in the short term (Table 1). There are conflicts between interested parties. For example, utilities would like to sell the electricity needed to charge EV batteries. All-electric vehicles would use the most electricity. Nevertheless, from the point of view of the industry, hybrid vehicles, which use both electricity and gasoline, may make more market sense. Interested parties are also experiencing internal conflicts. For example, within the automotive industry, electric vehicles would compete with existing product lines both in domestic and foreign markets.
| Table 1. Conflicts over Short-Term Goals | ||
| Goal | Conflict areas | |
| Environmental groups | Clean air | Regional versus curbside impacts Costs versus effectiveness |
| Automotive industry | New Markets | Competition with existing products Domestic versus foreign markets Hybrids versus all-electric vehicles |
| Utilities | New applications for electricity | Regional competitiveness of business Hybrid versus all-electric market effects |
U.S. trends reveal an even more significant conflict between where the market is actually going and anyone's goals regarding electric vehicles. As Figures 1 and 2 illustrate, sales of light trucks, sport utility vehicles, vans, and recreation vehicles are soaring as sales of passenger cars have declined. Yet, the "light truck" category of vehicle is much less fuel-efficient than the passenger car. Since the early 1980s, fuel efficiency in the nation has declined to 24.8 miles per gallon. Less efficiency means more emissions and poorer air quality. These market trends are so pervasive and significant that they will overwhelm the air quality effects of electric vehicle deployment. The effects of zero emission vehicles will be swamped by the opposite emission effects of current market preferences.
Regulatory Choices
As the nation considers the alternative regulatory approaches to reduce motor vehicle emissions, it is important to consider costs. What would it cost to reduce a ton of volatile compounds from the atmosphere using various regulatory approaches? The Washington research organization Resources for the Future has examined that question under two regulatory rubrics: command-and-control approaches, which use government mandates and requirements to change automotive behavior, and economic-incentive approaches, which provide incentives for change within the marketplace itself. The results are striking. Under command-and-control strategies, a nationwide mandate to deploy electric vehicles could cost as much as $108,000 per ton of volatile compounds reduced. Under economic-incentive strategies, using emissions levels to determine vehicle registration rates, with higher charges for registering higher emission vehicles, would cost under $2,000 per ton of reduced volatile compounds.
What is striking is not the absolute numbers, but the orders-of magnitude differences. Reducing emissions and improving air quality is and must be a priority. But the approaches taken must carefully consider the price tags for alternative strategies, as well as their subsequent technological and market effects.
Endnotes
Note 1: Government Accounting Office, EV Update, September 29, 1995, Washington, D.C. Back.
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