Are elec­tric ve­hi­cles our best bet for a low-car­bon fu­ture?

The Globe and Mail (Prairie Edition) - - NEWS - ERIC REGULY

Atrans­porta­tion rev­o­lu­tion is in the mak­ing and bets worth hun­dreds of bil­lions of dol­lars are be­ing placed. Who might the win­ner be? Will it be the Tesla-style elec­tric car, the Toy­ota-style hy­brid or the hy­dro­gen car? Will per­sonal trans­porta­tion of the Uber ilk, pos­si­bly in self-driv­ing form, re­place pub­lic trans­porta­tion as we know it? Might the gaso­line en­gine sur­priseusal­lan­den­dure­fora­n­other 20 years, or even a cen­tury?

It’s im­pos­si­ble to know, but we do know the game changed more than a lit­tle this week when the Unit­edNa­tion­spub­lishedafright­en­ingre­port­that­saidthe­p­lan­etis warm­ing at a far faster rate than the cli­mate-change sci­en­tists had sus­pected. We’re on course for a 1.5-de­gree av­er­age warm­ing, over prein­dus­trial lev­els, by 2040, and even that in­crease might be op­ti­misti­cally low. Whole­sale en­vi­ron­men­tal dam­age – hor­ren­dous floods, droughts, star­va­tion, mass mi­gra­tion, bio­di­ver­sity die­offs and other night­mares – might soon not be the pre­serve of Hol­ly­wood hor­ror flicks.

In the same week, William Nord­haus be­came the co-win­ner of the No­bel Prize for eco­nom­ics. He’s a pi­o­neer in the in­ter­ac­tion be­tween the en­vi­ron­ment and the econ­omy, and has ar­gued for­ever that putting a price on car­bon­is­the­most­ef­fec­tive­way­tore- duce the out­put of planet-warm­ing green­house gases.

The mes­sage: The UN and Mr. Nord­haus are telling us that car­bon taxes are the way to go, and should be launched with alacrity. Such taxes can be an ef­fi­cient way for the users of fos­sils fu­els pay for the “ex­ter­nal­i­ties costs” – the dam­age they im­pose on the en­vi­ron­ment and so­ci­ety.

Which brings us to trans­porta­tion – typ­i­cally the first- or sec­ond-big­gest source of green­house gas emis­sions in the de­vel­oped world (in the United States, trans­porta­tion was tied with elec­tric­ity gen­er­a­tion, at 28 per cent of to­tal emis­sions out­put in 2016, ac­cord­ing to the En­vi­ron­men­tal Pro­tec­tion Agency).

Car­bon taxes ex­ist, or are be­ing en­acted, in sev­eral coun­tries, in­clud­ing Bri­tain, Swe­den and Ire­land. Bri­tish Columbia’s 10-yearold car­bon tax, now set at $35 a tonne of car­bon-diox­ide-equiv­a­lent emis­sions, has been hailed as the “stan­dard bearer” for such taxes in the Western world. It is seen as fair, trans­par­ent and ef­fec­tive. Be­tween 2007 and 2015, real pro­vin­cial gross do­mes­tic prod­uct grew more than 17 per cent while net emis­sions de­clined by 4.7 per cent, putting the lie to ar­gu­ments that car­bon taxes are au­to­matic growth and job killers.

Car­bon taxes, how­ever, are still rel­a­tively rare world­wide or of­ten priced at such a low level that they are next to use­less. The fed­eral govern­ment wants to launch a pan-Cana­dian car­bon tax. If it ever gets off the ground – a big if given that Doug Ford’s new On­tario govern­ment and Man­i­toba’s want out, and that Al­berta could join the ex­o­dus – it would be ini­tially priced at $10 a tonne, low enough to barely move the nee­dle.

But given the UN re­port and pub­lic­ity gen­er­ated by Mr. Nord­haus’s No­bel, a big re­think on car­bon taxes is prob­a­bly al­ready un­der way. Po­lit­i­cal pres­sure for their in­tro­duc­tion can only in­crease. The trans­porta­tion in­dus­tries are try­ing to fig­ure out who the win­ners and losers will be.

What is ab­so­lutely cer­tain is that car­bon taxes will raise the cost of driv­ing any ve­hi­cle that burns fos­sil fu­els, or rid­ing in any ve­hi­cle that does. That lit­tle re­al­ity might clob­ber the taxi ser­vices and Uber be­cause their busi­ness model is built on fre­quent, cheap trips with low profit mar­gins. How long will they last if car­bon taxes raise the price of a fare by 20 per cent or more? Car­bon taxes are de­signed to be Pigo­vian, that is, they are de­signed to change be- haviour that cre­ates un­de­sir­able ef­fects. In this case, the Pigo­vian re­sponse is to avoid a form of trans­porta­tion made too costly by the car­bon tax.

But won’t elec­tric cars save the day? Pos­si­bly not. First of all, ecars are still rare be­cause they are highly ex­pen­sive com­pared with cars pow­ered by in­ter­nal com­bus­tion en­gines, have rel­a­tively short ranges and are re­liant on charg­ing net­works that are in­ad­e­quate in most coun­tries. That’s one big prob­lem.

The other is that e-cars would getswept­in­tothe­car­bon­taxnetif the elec­tric­ity used to charge their bat­ter­ies comes from dirty sources, such as coal-pow­ered gen­er­at­ing plants.

Those higher costs mean it might make no sense to buy an ecar in, for in­stance, Ken­tucky, West Vir­ginia, Wy­oming, Ohio, In­di­ana and Utah, where burn­ing coal sup­plies 70 per cent or more of elec­tric­ity. In states with scads of clean en­ergy, such as Wash­ing­ton and Ore­gon, where hy­dro power is preva­lent, e-cars make a lot of sense. Ditto in Que­bec, where al­most all the power comes from hy­dro and other re­new­able sources, such as wind vanes. But in­somere­gion­sofNorthAmer­ica, e-cars might be even dirt­ier than cars equipped with the new­est gaso­line en­gines.

As car­bon taxes are rolled out, the safest bet is pub­lic trans­porta­tion – the most ef­fi­cient form of trans­porta­tion of all. Too bad not enough peo­ple talk about it. The tech­nol­ogy and the in­vest­ment is gush­ing like mad into elec­tric cars and their off­spring, self-driv­ing cars. Imag­ine if all that tal­ent, tech­nol­ogy and money were put into pub­lic trans­porta­tion – buses, trains, sub­ways – pow­ered by elec­tric­ity from low- or zero-car­bon sources? We’d have a cleaner, more liv­able cities whose res­i­dents wouldn’t get crushed by car­bon taxes.

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