Earlier this month, over at the Energy Institute at HAAS, economist James Bushnell had an interesting post on the way economists and climate hawks clash on the subject of electric cars. It also offered a window into broader clashes between those groups.
As Bushnell points out, economic research — see here, here, here, and here — is generally not supportive of current subsidies for electric vehicles (EVs). It finds that the environmental benefits of EVs are, for now at least, marginal, and worth less than the subsidies paid for them. Current subsidies are also regressive, going primarily to upper-income taxpayers.
From the point of view of many economists, this makes electric car subsidies bad policy. If the goal is to reduce greenhouse gas emissions, policy ought to seek out the cheapest reductions first. (And what’s the best way to find the cheapest reductions? You guessed it: a price-based instrument like a carbon tax.)
Via David Levinson.