SEVA response to “Phony Math and Ironic Economics Used to Justify Electric Car Tax Breaks”
SEVA’s mission is to educate, demonstrate and proliferate the adoption of electric vehicles. We are a volunteer run organization with no paid staff. The primary reason we support legislation such as the Washington State electric vehicle sales tax exemption is that point of sale incentives have been very good at getting ordinary people to buy or lease electric vehicles. While most SEVA members also support reducing CO2 in the atmosphere, our primary goal is to grow the number of electric vehicles in the State of Washington. We further advocate for policies and legislation that ensure a safe, reliable, and plentiful ecosystem for electric vehicle owners to operate and charge their vehicles in Washington.
While we might agree that there could be less expensive ways to reduce CO2 in Washington, SEVA supports HB 2087 because it helps remove a major barrier to the adoption of electric vehicles – their higher up front purchase costs. If the Legislature were to propose an equivalent $11m appropriation this biennium to reduce the most amount of carbon in the cheapest possible manner, SEVA would definitely support that. So far such a proposal is not available.
Specifically addressing Mr. Meyer’s assertions:
1) JJ McCoy has testified in his capacity as the volunteer legislative director for the Seattle Electric Vehicle Association, not the Northwest Energy Coalition. To our knowledge, there is no mechanism by which the electric companies are pushing this work.
2) Contrary to Mr. Myers’ assertions, not all carbon measurements use metric tons. The Regional Greenhouse Gas Initiative (RGGI), one of the largest carbon markets in the world, prices carbon units in short tons. Perhaps metric tons are not as “universal” as we think.
3) The Keybridge study estimate of 63% market share loss is not an assumption. Rather it’s an estimate derived from the average market share of all the other states that lack state incentives, with 50% weight on Oregon, since it shares some key demographic characteristics with Washington. This is clearly described in the methodology section of that study. The difference in cars is 2,163 next year, which was inflated 10% per year to be consistent with the assumptions of the state’s fiscal note on HB 2087. The Keybridge estimate is fully consistent with other, fuller econometric estimates of the effects of state-level incentives surrounding the last new vehicle rollout we saw: hybrids. After controlling for income, demographics, gas price and many other factors using the most robust multivariate statistical methods, several studies (sent under separate cover) have concluded that state-level incentives account for about half the market share of the alternative vehicles since they help buyers surmount the higher upfront costs of alternate vehicles.
4) As for the differences between the EVangelism flyer and the carbon memo and as the author of both, JJ McCoy confesses that the two don’t exactly match. A more recent and more elaborate analysis was used in the carbon memo that took into account both upstream emissions from oil production and the carbon intensity of Washington’s power mix. JJ’s parameters are all clearly laid out in his carbon reduction page. We will update the EVangelism flyer to match the memo.
5) The Social Cost of Carbon methodology and the year-by-year price schedule used is the one adopted by the Office of Financial Management for lifecycle cost analysis. While there are undoubtedly other social costs, this is the one that the State will use to evaluate such proposed legislation so we felt it prudent to use their values. You will find the dollar values are all correct at http://ofm.wa.gov/budget/
6) Mr. Myers’ assertions about the effect of the tax break on the economy are similarly confused and wrong. The benefit is not related to the tax break directly. The tax break is what gets drivers behind the wheel to enjoy significant and ongoing fuel savings. Keybridge and other macroeconomists have found that these fuel savings allow families at every income level to save on gas costs, allowing them to devote more of their income to other uses. These other uses (food, entertainment, personal services, etc.), in turn, create far more jobs in the state economy than the petroleum sector. For more research of this type see http://are.berkeley.edu/~
7) Both the 12-year life and 15-year life are reasonable. We chose 15 years in consultation with State staff who use the same parameter value in lifecycle cost analyses involving vehicle purchases.
In summary, SEVA’s primary mission is to promote the adoption of electric vehicles. It just so happens that electric vehicles have the very attractive benefit of producing virtually no CO2 emissions in their lifecycle given Washington’s very green electric power mix. We came to the conclusion long ago that if we want to significantly reduce CO2 in transportation in Washington citizens need to drive a radically different type of vehicle on Washington roads. We believe electric vehicles will be those vehicles.