Budget (3) – More on the Prius/Hummer issue

The “feebate” program to reward people who buy fuel-efficient cars and punish those who buy gas-guzzlers is officially called “ecoAUTO,” which must set some kind of record for government violence against the language. Nevertheless, it’s what’s getting the most attention of any enviromental measure built into Jim Flaherty’s latest budget. I’ll pile on a little more.

Automobile back endsCBC radio’s afternoon show here had on a fellow they credited with writing the study that advised the government on feebates, Greg McGuire (sp?). The only independent reference I can find to him is as a workshop facilitator; CBC twice got wrong the name of the National Roundtable on the Environment and the Economy (a government-sponsored think-tank on, well, the environment and the economy, which Liberal enviro critic David McGuinty used to head), so I’m not sure we can count on the detail that he actually wrote a study, but he certainly seemed to know the file.

In any event, here‘s the NRTEE conclusion from October 2005, which would be maybe two-and-a-half pages printed out. Key quote:

The NRTEE does not believe a vehicle feebate would be the optimal instrument for shifting consumer purchasing to more fuel-efficient vehicles. There are significant unknown factors with the introduction of a vehicle feebate, including issues external to the modeling exercise, which could result in an increase in vehicle GHG emissions. (An example is the risk of vehicle arbitrage.) These issues would need to be addressed through a more integrated and comprehensive strategy.

Most of the rest is backpedalling from this fairly clear conclusion, along the lines of “Well, maybe it would work if you did a bunch of other stuff, too,” and “Let’s keep looking at it.”

In today’s interview, which is not online, McGuire didn’t actually mention the conclusion that feebates aren’t a super-hot idea, but he did say:

  1. The results of the feebate program need to be watched very closely and the program recalibrated if it’s not working right;
  2. It’s a shame the feebate program exempts trucks, which some people might buy instead of guzzler cars to avoid the inefficiency levy;
  3. It’s an extra shame that the rebates and levies only kick in at the extreme ends of the efficiency scale. He’d prefer a graduated system that would reward or punish drivers for buying even slightly above or below a midline.

All of which makes a lot of sense. Don’t hold your breath for magic in the auto market, in other words.

Point two: discouraging to me as a journalist are the number of stories (of which this one in the Globe is only one example) that appear to conclude that the feebates will be damaging to our beleaguered auto industry and also quite ineffective. Here’s the second paragraph of the Globe story:

Gas guzzler taxes in Ontario and British Columbia — emulated by Ottawa in the budget on Monday — have failed to push drivers to downshift to smaller, more fuel-efficient vehicles, statistics compiled by DesRosiers Automotive Consultants Inc. show.

and here’s a later passage in the same story:

When viewed against the backdrop of the struggles the three companies currently face, the feebate scheme comes at precisely the wrong time, said Dennis DesRosiers, president of DesRosiers Automotive Consultants. “GM, Ford and Chrysler are all making decisions on what plants to keep open,” Mr. DesRosiers said. “I think it sends the wrong message. It doesn’t send the right message through to these boardrooms.”

Now, I could understand if the auto industry were saying the feebates will be damaging and environmentalists were saying they don’t go far enough, but here it’s the same source sucking and blowing. Damaging or ineffectual, please, not both at once.

Increasingly, as I see more, I’m thinking ineffectual.

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One response to “Budget (3) – More on the Prius/Hummer issue

  1. Pingback: ecoSCRAPPED « The EcoLibertarian

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