Could 2017 GOP Tax Bill — That Would End Electric Vehicle Tax Credits — Help Environment?
Republicans and Environmentalists alike Question Carbon Footprint of Electric Cars
The Grand Old Party (GOP) is planning to eliminate one of the nation’s largest electric vehicle subsidies. The effect the cut will have on the electric car industry is clear. But, the reason why the GOP is making the cut is up for debate.
Those opposed to the cut believe that the GOP is under pressure to find a means of making its tax reform bill viable. Those who agree with the cut are questioning the assumptions made about electric vehicles.
Electric Car Credits and the GOP Tax Bill
Since 2011, consumers who purchased an electric vehicle enjoyed the benefits of the IRC 30D. “Internal Revenue Code Section 30D provides a credit for Qualified Plug-in Electric Drive Motor Vehicles including passenger vehicles and light trucks.”
A tax break for electric vehicle owners, the IRC 30D also works as a subsidy for electric vehicle manufacturers. The tax break encourages the public to invest its buying power in electric cars by rewarding consumers financially for doing so.
But, the proposed 2017 GOP tax bill would put an end to the electric vehicle federal tax credit.
For consumers, that means a potential loss of $2,500 to $7,500 for those interested in purchasing an electric car. For electric vehicle manufacturers, that means fewer people will have the means to purchase their cars and trucks.
Opposition to the Elimination of the Electric Car Credit
Those who believe in the value of electric vehicles are not keen on the idea of cutting the tax credit. Opponents of the cut are voicing strong opinions about the repercussions such a cut would have. Furthermore, opponents of the proposed tax bill’s cuts have opinions as to why the electric vehicle credit is a danger.
Opinions as to “real” reason the GOP plans to eliminate the program vary. For TheHill.com’s Melanie Zanona, the proposed cut is purely political. “It’s just one of several tax breaks Republicans would end as a way to help pay for their massive bill.” But those who are in favor of the cuts cite different reasons.
Most people do agree, however, eliminating the electric car tax-break/subsidy will not be good for electric-car manufacturers.
Consequences of Ending the Electric Vehicle Tax Credit
Following the title to his article, GOP’s Move To End Electric Vehicle Incentives In Tax Plan Could Not Come At A Worse Time, Forbes contributor Sebastian Blanco goes on to explain why right now is such an inopportune time. Citing several sources, Blanco explains that the cut will have a devastating impact on the electric car industry.
Electric vehicle subsidies are imperative for the growth of the electric car industry according to Blanco. “Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles,” he quotes General Motors.
Quoting Navigant senior research director John Gartner, Blanco insists that right now is the critical threshold for electric vehicles. “The next two years are a critical time as OEMs are increasing the number of EV models available and make the technology mainstream.” And, Blanco is not alone in his assessment.
Legislators across the aisle from the GOP are particularly critical of the proposed electric vehicle tax credit cut.
“Electrification for vehicles is extremely important for the future of the auto industry,” said Sen. Gary Peters (D-Mich.). Peters believes this is especially true as vehicles become more autonomous and self-driving. According to Peters, “those vehicles will be powered by electric.”
Opponents of the cut are clear as to why the IRC 30D should not be eliminated; it will adversely affect the sale of electric vehicles. And, opponents of the cut believe they know why the GOP attempting is doing so.
“This would [reduce] revenue for states’ domestically produced electricity in favor of petroleum products. [Petroleum is] imported from a few producing states and foreign sources.” In addition to the cut increasing oil dependence, there is an assumption that electric cars are greener than traditional fossil fuel powered vehicles.
There is another possibility however, electric vehicles may not be as green as many assume.
Electric Vehicles Only Assumed to be Emissions-Free?
It may come as a surprise, but not all environmentalists believe electric car subsidies are the answer to lowering carbon emissions. There are those on both the right and left who are not convinced electric cars have lower emissions.
More importantly, the scientific data does not support the notion that electric cars are necessarily an alternative to traditional engines. With respect to emissions, electric cars may not be cleaner than combustion and compression engines. In fact, there is growing evidence that electric cars actually produce more emissions.
Contemporary combustion and compression engines produce emissions directly. Electric vehicles do not. Powered by battery cells, electric vehicles produce zero-emissions. But, the production of the electricity that powers them is not. Indirectly, electric cars emit substantial amounts of greenhouse gases.
Coal is Power Source of Electric Cars
In the U.S., 65% of all the electricity generated is a product of fossil fuels. Renewable energy sources like solar, wind, and biomass produce only 8% of the country’s electricity. Of that 8%, 6.5% is hydro-electric power.
Solar generated power accounts for less than 1% of all the electricity generated in the U.S.
In other words, the energy source used to create the electricity that powers electric cars is dirty. So by default, electric cars are dirty.
Electric Cars are Coal Cars, Coal Dirtiest Fossil Fuel
Coal is considered one of the dirtiest fossil fuels available, yet coal is responsible for 40% of the world’s electricity. Of all the CO2 emitted into the atmosphere, 39% comes from the burning of coal. And unfortunately, there are no means of making it cleaner according to National Geographic Magazine.
“It’s the dirtiest of fossil fuels [and] we burn eight billion tons of it a year. In 2012 the world emitted a record 34.5 billion metric tons of carbon dioxide from fossil fuels. Coal was the largest contributor. Cheap natural gas has lately reduced the demand for coal in the U.S., but everywhere else, especially in China, demand is surging.”
The fact that the use of coal to fuel power plants is growing is of particular concern for those weighing the value of electric cars. The idea behind electric cars is to reduce CO2 and greenhouse gas emissions. But if the electricity used to power cars is dirty, the value of electric cars is highly debatable.
Electric Cars Only as Clean as Power Source
In order for electric cars to be emissions-free, production of the electricity that powers EV must be emissions-free. And right now, the production of electricity is coal dependent. Furthermore, the production of electricity may never be emissions-free.
While Europe prides itself on generating emissions-free electricity, its efforts to do so are making one reality evident. Emissions-free electricity requires massive amounts of space. The United Kingdom set a milestone target for the near future. By 2020, the UK wants to generate one-sixth of its electricity with wind turbines.
The problem is, generating 1/6 of the UK’s electricity with wind turbines requires an area — a wind farm — the size of Wales.
Size is also an issue with solar power. While solar panel requires much less energy to produce large quantities of electricity, it’s not possible to store it. The size of the batteries required to store solar-generated power makes attempting to produce them ludicrous.
So at night, solar-generated electricity is nonexistent.
Electric Car Technology is Counterproductive
Electric car production — and the subsidizing of electric car manufacturers — is counterproductive and expensive. Until there is a means of producing clean energy on a mega scale, electric cars do very little to reduce humanity’s carbon footprint.