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How to Get from SUVs to ZEVs

The climate crisis requires a shift to electric vehicles. Here’s how the federal government can make it happen.

Marc Jaccard 14 Oct 2021 | The Conversation

Marc Jaccard is a professor and director of the School of Resource and Environmental Management at Simon Fraser University. This article originally appeared in the Conversation Canada.

To prevent the worst of climate change, we must increasingly buy zero-emission vehicles. Transportation accounts for one-quarter of Canada’s greenhouse gas emissions, and so our cars, SUVs, pickups and vans must be battery electric, plug-in hybrid electric or hydrogen fuel cell.

Fortunately, the auto industry already sells zero-emission vehicles. Unfortunately, the auto industry keeps convincing governments that an ambitious transition to them is impossible. This sad situation might change in Canada, but only if our politicians are as climate sincere as they claimed in the recent federal election.

During the campaign, all the major parties, including the Conservatives, made ambitious zero-emission vehicle sales commitments.

The most obvious policy is the zero-emission vehicle mandate, a requirement that automakers achieve minimum percentage ZEV sales in specific years. Quebec and British Columbia already have zero-emission vehicle mandates.

But the minority Liberal government must adopt it countrywide to fulfil its election promise that zero-emission vehicles would make up 50 per cent of all vehicles sold by 2030 and 100 per cent by 2035.

The zero-emission vehicle mandate has great potential as a transformative climate policy, but only if government fully applies it. Too often, I’ve heard industry reps and even public servants describe the ZEV mandate as a market-following policy, one that consolidates the gradual shift in consumer preferences toward zero-emission vehicles.

In fact, the zero-emission vehicle mandate can and should be driving the market transformation. It does this by requiring a minimum percentage of ZEV sales and charging financial penalties to auto manufacturers that don’t comply.

With this policy, there is no reason why Canada cannot achieve 50 per cent or even 75 per cent zero-emission vehicles sales by 2030 — a target Norway reached this year.

I’ve heard auto industry representatives claim that an aggressive zero-emission vehicle mandate is impossible in Canada because consumers don’t demand enough ZEVs and even if they did automakers could not shift production fast enough.

But if the penalty is sufficient — say $20,000 for each gasoline vehicle sale that puts the seller into non-compliance — auto sellers will be incentivized to adopt a marketing strategy that accelerates growth in zero-emission vehicle sales.

How could they do this?

They could lower the higher purchase price of zero-emission vehicles with a subsidy from their more expensive vehicles. Vehicle sellers charge higher mark-ups on vehicles for which an increase in price won’t have as big an impact on sales — consumers of expensive vehicles are less price sensitive.

For example, under the zero-emission vehicle mandate, the purchaser of a $75,000 gasoline-fuelled Porsche might pay $3,000 extra to help lower the price of ZEVs. They probably won’t notice since all sellers of expensive vehicles would have to do this.

Auto industry reps say that government subsidies for zero-emission vehicle buyers need to increase to reach ZEV targets. This is incorrect. The zero-emission mandate can function without any government subsidies.

Indeed, it seems fairer that the subsidies to lower the purchase price of zero-emission vehicles come from the purchasers of expensive vehicles, most of whom burn climate-disruptive gasoline. Why should regular taxpayers, some of whom may not own a car, be tagged with most of the cost of accelerating zero-emission vehicle sales?

A strong ZEV mandate should also incentivize vehicle sellers to aggressively market zero-emission vehicles — this should have started a decade ago. Watch a sports event today on TV and there’s a barrage of ads portraying young adults enjoying nature in their nature-destroying gasoline vehicle.

If vehicle sellers lose money when they sell gasoline cars, you’ll quickly see a shift to advertising that only promotes ZEVs. Doesn’t this make sense in a climate emergency?

Yet another industry argument is that we mustn’t be too far ahead of other jurisdictions. They’ve done so well with this argument that I’ve even heard a public servant claim an aggressive zero-emission vehicle mandate would increase the price of electric vehicles.

This is backwards. If we’re in front of other jurisdictions with a strong zero-emission vehicle mandate, this will induce manufacturers to rapidly shift production to ZEVs. And this will have a policy spillover effect, as citizens in other jurisdictions ask why their politicians haven’t yet implemented a zero-emission vehicle mandate.

If our strong zero-emission vehicle mandate shows the auto industry where the puck is going, just watch how quickly the production and marketing strategies change.

To validate the climate-sincerity they promised during the election, our federally elected politicians must act immediately.The Conversation  [Tyee]

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