Perspective: Government Leadership Needed for Electric Vehicles to Succeed
26 February 2010
Perspective by Chris Hill, Manager, Central Fleet for the City of Hamilton, Ontario, Canada, and author of Hamilton’s Green Fleet Implementation Plan.
[Mr. Hill is currently chair of the Ontario Chapter of NAFA Fleet Management Association, and a Green Party candidate for Canada’s Parliament in the next general election. The opinions expressed in this article do not necessarily reflect those of these organizations.]
The critical need for government leadership in the emergence of electric vehicles dominated a recent Green Fleet Management discussion in Toronto, hosted by Fleet Challenge Ontario.
Jack Rosebro, founder of Perfect Sky in Los Angeles [and a contributor to Green Car Congress], spoke of the need for government policy makers to move beyond incremental changes that are not providing enough incentive for the market to produce alternatives to oil as the almost exclusive source of energy for road and rail transportation.
Jeffery Immelt shares this point of view. In an interview published in Maclean’s, a Canadian news magazine, the chairman and CEO of General Electric said, “Government should be a catalyst for change. In energy, a momentary signal on the price of oil doesn’t necessarily create the genesis for a 40-year investment. That’s where government comes in...only the government can help influence [change] by having a price for carbon and technical incentives.”
Mr. Immelt’s point is that the spike in oil prices to $147/barrel in 2008 is not enough on its own to get automakers to make electric vehicles. But combined with the world’s concern about climate change and the increasing possibility that peak oil is not just a theory, there is greater cause to believe that electric vehicles are going to be well received.
The forty cities that are in the Clinton Climate Initiative’s C40 group have municipal fleets with the capacity to buy every EV produced in 2011 and possibly 2012 as well. City vehicles are highly visible and EVs are most practical in an urban setting. The number of potential buyers of electric vehicles is at the tipping point for success and maybe beyond.
Whether or not cities, or anyone else for that matter, can afford to buy electric vehicles is a real concern. As production increases, prices will come down but no one knows how long that will take. This is “where government is needed, to create clarity and certainty around the investment environment”, Mr. Immelt said.
There is an interesting precedent for this, when government action revolutionized transportation. Following the end of World War I, there was a significant decline in aircraft production in the United States. The US government, convinced that aircraft were critical to winning the war, wanted to expand civil transport to create a demand for airplanes. So it intervened through the US Post Office by passing the Kelly Act to contract air mail service to commercial carriers. It didn’t work very well at first. Trains were very efficient at moving long distance mail. In the end, the market responded by creating scheduled airlines and better airplanes.
Our current governments in North America seem to be content with announcing what they say are significant changes in environmental policy that are nothing more than adding blue dots to the soap powder, to use a famous analogy. They need to do much better than this.
The fear that a carbon tax is unworkable must be overcome. Reducing government revenue from income tax and increasing revenue from a gas tax is a concept most consumers can understand and may accept if it is well presented. Investment in products that use less gas will increase and a post-petroleum society will begin to emerge.
This could be another air mail idea. As fantastic as air mail must have sounded years ago, it worked and transformed our lives.
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