Why is America's oil consumption approximately back to 1999 levels? Expensive oil is driving technological and consumer change.
For example, in the same month that the Prius became the best selling vehicle in California, the Chevy Volt set a new monthly sales record. www.plugincars.com/chevy-volt-sales-set-record-october-2012-nissan-leaf-rises-occasion-125104.html. And the same people who predicted confidently that the Prius would flop have said the same about the Volt.
Yet, in October, 2,961 Volts sold! That's the third month in a row that Volt sales have exceed 2,800 cars or nearly triple the 1,108 that sold in October 2011. The Volt already is on its way toward being among the better selling vehicles in the US.
Booming sales of hybrids and plug-in vehicles as well as rising use of gas and biofuels to power vehicles show that our addiction to oil can be beaten!
But that's not the point, We could take money from taxpayers and gave it to people who made, and bought, cars running on yak dung. The result would be more cars running on yak dung and fewer on oil based fuel.
ReplyDeleteIt's obviously possible; the point is, does it make economic sense?
I'm happy to see taxes on oil products to account for external costs, but subsidising specific technologies (and therefore effectively penalising others) is not how to help true innovation.
How about the US government developing nuclear energy and commercializing it? How about government's role in electrification? How about government's role in developing the internet? Just about all innovation is rooted in major public private collaboration. And government protects intellectual property and creates monopoly power for patent holders. Is that a bad idea? The US reliance on oil puts our national and economic security at risk. Money wisely invested--pulic or private--that accelerates a reduction in the use of oil pays back many times over.
DeleteThere is an empirical literature in economics that addresses some of these claims. Beyond directly evaluating "how true" any of those are (I tend to agree with you), that is missing the ball a bit on what the legitimate concerns are.
DeleteFirst, the right probability is not to point out the success of those projects and then infer that government investment is a good thing. But rather the probability should be examined the other way: what is the likelihood of a government investment producing a valuable outcome? Those are very different. To take an analogy, one would not want to point to the current economic success of China as evidence that Communism produces economic growth.
A second issue is that which is harder to see. Take nuclear. While I support that technology (despite it, as you know, being costly), it is surely the case that the massive resources poured into nuclear could have been put to better use, and that government investments in nuclear came at the expense of developing other clean and cost effective alternatives. It also is no small irony that one can "blame" the government's nuclear promotion for an increase in carbon and other pollution emissions in the 1980s as the 1970s crisis encouraged us to burn more coal to ensure energy efficiency since nuclear was demonized due to some accidents.
I think Alex was making a serious (and empircally supported) observation that output based standards are more efficient and more consistent with the rule of law and the limits of human cognition than government picking particular standards to invest in. And it is surely plain as day that by picking winners, that creates interest groups that make it hard to do away with them.
Government is also responsible for the ethanol boom, to make just one dramatic comparison.
Finally, while I'd like myself to be able to afford a Volt, it is just not possible right now. The car still relies on an outdated "3rd world country" electrical grid (how well did the government maintain and innovate the grid in partnership with the private sector) and the effective mileage and emissions of the Volt vary greatly in different regions in the country. I don't think a Kentucky Volt can save the planet.
Finally, some people are legitimately reasonable to point out that the projections for the Volt by GM and the government are far greater than even the "record" sales we see today. They were projecting, for this year, 60,000 in sales. They are going to be nowwhere near that. Just because sales tanked a year or so ago and are now rebounding nicely, it makes it easy to point to the astonishing growth and success of the vehicle. But it is still massively underselling based on the original projections - projections which are likely to have been used to influence the amount of support we give to that car, the consumers and the company.
There are other issues too.
Nonetheless, I am glad to see the sales increase and I hope that increased sales lead to economies of scale in future production that can bring the cost of the entire car down so that it outcomes the ICE counterparts on its own. It is not clear right now if that is going to be likely.
By any realistic measure the Volt has been a disaster. Ideological junk...
ReplyDeleteThe Volt was Motor Trend's Car of the Year. No junk in that measure. And sales are ahead of where the Prius was at the same point in its introduction cycle.
DeleteThe 10th best selling vehicle in Sep '12 was the Hnonda CRV with 22k, 10 times the volt. 55k Ford F-Series. I would say the Volt still has a way to go to be a "best seller"
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