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Tesla Continues to Use Government to Rob the Poor to Pay the Rich

August 14, 2017

Climate Change Weekly #258

Electric car

Federal largesse is finally running out for Tesla buyers, who will no longer be able to claim a $7,500 per-vehicle tax credit. The company expects to sell its 200,000th luxury vehicle anticipated sometime in 2017.

Years ago, Tesla promised the masses an affordable electric vehicle getting more than 200 miles between charges. Instead it developed $110,000 sports cars for millionaires who could afford to pay the full freight for their vehicles but instead took money from the poor and middle income to help fund their “green lifestyle” purchases.

Electric cars are not new. The first electric vehicles were created in different shops in 1828 and 1834, 50 years before Karl Benz put the first gasoline-powered vehicles on the road. A fleet of electric taxis cruised London’s streets in the 1890s, and the first hybrid-electric vehicle was manufactured in Chicago in 1911. So contrary to popular belief, electric vehicles aren’t novel, orphan technologies needing government subsidies to get their start.

Vehicles powered by the internal combustion engine won out in the marketplace more than 100 years ago because they were comparatively affordable, powerful, comfortable, reliable, and could go long distances between fueling, a combination of factors electric vehicles to this day cannot match, despite billions in government support.

The recent focus on climate change, however, got the federal government pushing this uncompetitive technology.

Despite a $465 million low-interest government loan to develop a cheap electric vehicle in 2009, for eight years Tesla continued to turn out expensive niche sports cars only the wealthy could afford. How niche were they? Only 159,333 electric vehicles of any brand were sold in the United States in 2016, accounting for less than 1/10 of 1 percent of the 17,557,955 vehicles sold nationwide. Tesla accounted for just 46,550 of those vehicles.

In addition to the federal tax credit and the low-interest loan, Tesla and its wealthy customers also benefit from other substantial subsidies at the expense of poor and middle-income taxpayers, including state tax incentives, free (to the user, not the taxpayer) charging stations, and the use of high-occupancy vehicle (HOV) lanes. A 2015 study found the richest 20 percent of Americans received 90 percent of the billions in taxpayer subsidies to electric vehicle manufacturers, buyers, and owners.

The future of Tesla is not assured. It misses both its sales and production targets each year. In addition, even with government support and hundreds of millions of dollars in funding from other automakers who would like to use Tesla “breakthrough” battery technology—if the breakthrough ever materializes—Tesla loses money on each vehicle it sells, consistently losing hundreds of millions of dollars each year.

And the news gets worse. While Tesla has announced its relatively low cost ($30,000 to $50,000) Model 3 will hit the sales floor this year, and more than 500,000 people have paid $1,000 to be put on a waiting list for the vehicle, Tesla is warning customers production delays could result in them not receiving their cars for years.

This comes just as the federal tax credit is soon to expire. As Paul Driessen details in Townhall, Tesla sales plunged to nearly zero in Hong Kong and Denmark when substantial government subsidies were eliminated.

Never fear, California’s climate-crazy legislature is coming to the rescue. State legislators seem intent on passing a $3 billion electric vehicle subsidy to replace the $7,500 federal rebate that is ending. California’s generous program would provide electric vehicle buyers up to $40,000 to purchase Tesla’s most expensive models. This is a tax cut for the wealthy that only liberals—and politically connected green industrialists like Tesla’s CEO and largest individual shareholder, Elon Musk—could love. It’s time to end this welfare for the well-to-do.

—        H. Sterling Burnett

SOURCES: Townhall and The Wall Street Journal (behind paywall)


IN THIS ISSUE …

Emissions underreporting threatens Paris agreementGermany, U.K. may face Paris defaultClexit prevents harmNew rules could shelve European renewables


EMISSIONS UNDERREPORTING THREATENS PARIS AGREEMENT

The BBC reports inadequate accounting for greenhouse gas emissions poses a greater threat to the success of the Paris climate agreement than President Donald Trump’s decision to withdraw the United States from the accord. Various air monitors show more greenhouse gases are actually being emitted than are counted in the official inventories submitted by various governments. The actual amount of greenhouse gas emissions from China, India, and Russia as well as a range of developing countries could be off by 50 to 100 percent—in other words, they could be emitting twice the carbon dioxide equivalent of what they are actually reporting.

For instance, a Swiss air monitoring station has for nine years measured emissions of a powerful greenhouse gas called HFC-23 coming from a location in northern Italy. The chemical causes 14,800 times more atmospheric warming than carbon dioxide on a molecule by molecule basis. The Swiss air monitors have detected 60 to 80 tons of HFC-23 emitted annually from a single Italian location. Yet official Italian government reports say only two to three tons are being emitted each year.

As another example, air monitors have traced 10,000 to 20,000 tons of emissions from China every year of the rare but powerful heat-trapping gas, carbon tetrachloride, a once-popular but now banned refrigerant and solvent. China’s official reports say it emits none of this gas. Also, China regularly revises its estimates of the amount of coal it uses and thus the carbon dioxide it has emitted each year. A 2015 report found a single error in China’s reported emissions statistics amounted to 10 percent of global emissions in 2013.

In addition, methane emissions from livestock in India, home to 15 percent of the world’s livestock, and other developing countries, could be underreported by 50 percent according to Anita Ganesan, Ph.D., who has overseen air monitoring research in India in recent years.

Poor or misleading greenhouse gas accounting threatens to doom the Paris climate agreement. Glen Peters, from the Centre for International Climate Research in Oslo, told BBC: “The core part of Paris [is] the global stock-takes which are going to happen every five years. … [W]ithout good data as a basis, Paris essentially collapses.”

SOURCE: BBC News


GERMANY, U.K. MAY FACE PARIS DEFAULT

Plans by Germany and the United Kingdom (U.K.) to meet their agreed-upon carbon dioxide emission reductions under the Paris climate accord may be scuttled before they even get off the ground. The Daily Caller reports at least two German states seem to be putting economic growth ahead of fighting climate change.

Despite German Chancellor Angela Merkel’s commitment for Germany to meet its greenhouse gas reduction targets under the Paris accord, the state governments of North Rhine-Westphalia (NRW) and Brandenburg have vowed to protect the 70,000 coal mining and power industry jobs in their states, putting those state governments “at risk of tacitly joining Donald Trump in turning its back on the Paris climate change deal,” said the Daily Caller. Germany, which gets approximately 44 percent of its power from coal, has seen its power from coal rise as it phases out the use of nuclear power. Germany’s carbon dioxide emissions have risen by 28 million tons annually. In June, NRW’s new government announced it would not be reducing coal production in the region, while Brandenburg’s government said it wanted to soften its 2030 reduction targets.

The U.K.’s carbon emission reductions are faring no better. Less than a day after Michael Gove, the U.K. Environment Secretary, announced a government plan to ban the sale of new diesel- and gasoline-powered vehicles by 2040, the National Grid reported such a plan would place unprecedented strain on the electric power grid, requiring a 50 percent increase in electric power production just to meet the demand from new electric vehicles. According to The Telegraph, the National Grid says under this scenario, “Britain will become increasingly reliant on imported electricity, which will rise from around 10 per cent of total electricity to around one third, raising questions about energy security.”

SOURCES: Daily Caller and The Telegraph


CLEXIT PREVENTS HARM

In an article in Environment Pollution and Climate Change, Arthur Viterito, Ph.D., writes President Donald Trump’s decision to pull the United States out of the Paris climate agreement was the right move. Viterito writes, “The U.S. withdrawal was based on three critical issues: questionable confidence in the science of global warming, the inability to accurately predict future climate phenomena, and the prospect of high expense yielding questionable returns on investment.”

Looking at two particular climate phenomena projected to worsen due to human-caused climate change, hurricane intensity and drought severity, Viterito shows neither has worsened. Using data from the National Oceanic and Atmospheric Administration Viterito shows the energy expended by hurricanes and other tropical storms, as measured by wind speeds and duration, did not increase in the Atlantic Basin between 1950 and 2015, nor in the Eastern Pacific from 1970 to 2015. In addition, the severity of droughts in the United States has remained flat since 1901.

Viterito concludes, “Poorly conceived policies, based on questionable scientific methods and conclusions, should be avoided at all costs. ... [T]he U.S. should steer clear of any commitments to alter economic activity for the sake of remedying dubious environmental concerns.”

SOURCE: Environment Pollution and Climate Change


NEW RULES COULD SHELVE EUROPEAN RENEWABLES

In May, European electric grid regulators proposed ending priority grid dispatch for renewable power. If the European Commission adopts this suggestion, wind and solar energy growth in Europe will stall.

During Europe’s push to reduce greenhouse gas emissions, the European Union forced grid operators to give priority access to the grid to electric power generated by wind, solar, biomass, and to a limited extent hydro and geothermal, even when doing so required curtailing the use of power generated by coal, gas, and nuclear plants—literally wasting the power they generated.

Recently the Council of European Energy Regulators (CEER) and Agency for the Cooperation of Energy Regulators (ACER) proposed ending priority access for any energy source. In a white paper on “clean energy” CEER called for exposing all generators to the “real-time value of energy.” In a joint press release, ACER agreed priority access should be ended and said renewable operators should not be compensated when their access to the grid is curtailed.

According to Craig Morris, writing at the Energy Transition website, if this policy is implemented, “[y]ou might as well say you don’t want wind or solar.”

Grid operators and generators want electricity on demand, but wind and solar can’t be switched on as needed, so wind and solar cannot be counted upon to provide either baseload or peaking power. In addition, when the wind blows and the sun shines, they generate more power, reducing the price of power on spot markets. If wind and solar operators are not guaranteed payment when their grid access is curtailed, no matter how cheap solar and wind get, they will price themselves out of the market. As a result, some wind and solar companies will likely face bankruptcy, as fossil fuel power plants have under present policies that discriminate against them.

SOURCE: Energy Transition

Author
H. Sterling Burnett, Ph.D. is a Heartland senior fellow on environmental policy and the managing editor of Environment & Climate News.
hsburnett@heartland.org

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