by Ryan Avent
Speaking of green jobs and the carmakers, the Post reports today that the Volt, GM’s electric savior, will finally debut in 2010, though only in two metropolitan areas and probably after Toyota releases a plug-in version of the Prius. San Francisco and Washington are the lucky winners of the Volt sweepstakes. The car will probably flop without improvements in infrastructure (namely, plugs in all the places people tend to park their cars), and since the government has committed to keeping GM in business for the time being, it will probably mandate that SF and DC pay, out of local budgets, to make the changes.
But even if GM gets the Volt ready by 2010 (which assumes that GM survives until 2010), and Toyota hasn’t already sucked up much of the plug-in market, and the initial cities make the necessary infrastructure changes, GM will have its work cut out for it. The Volt is likely to debut at a price between $30,000 and $40,000. That’s a lot to ask for what is basically an experimental car. One might think that something like carbon pricing could give the Volt a big cost advantage, but an optimal (and politically acceptable) carbon price level would probably increase gas prices by no more than 20 cents. The bulk of the emission reductions from carbon pricing aren’t going to come from personal automobiles.
High gas prices resulting from supply and demand shifts could increase demand for the Volt, but this is a double-edged sword for GM. Volt sales will rise, but the biggest market shift, at least in the short term, will be (as was the case last summer) from big, and largely American made, trucks and SUVs to small cars — a market in which American companies have been destroyed by foreign competition. It will be hard for Volt sales to offset continued deterioration in Detroit’s bread and butter markets.
One bit in the Post piece in particular got my attention:
It also helps to have an iconic car like the Volt close to Washington’s power brokers, who will soon be considering additional federal loans for the struggling automaker, said Roland Hwang, vehicle policy director at the Natural Resources Defense Council. After all, when natural gas debuted, buses using the alternative fuel ran regular routes past California’s state capital in Sacramento.
“You want your clean technologies to be very visible and build trust with public policy makers, even if city isn’t the ideal in demographics or in terms of infrastructure,” he said.
The punchline here is that Washington is home to one of the nation’s most successful heavy rail transit systems. Everyday, hundreds of thousands of workers are carried around the nation’s capital. Billions of dollars in private investment has been made near Metro stations. Just last month, Metro managed to carry over a million riders, well beyond its normal capacity, to and from the Inauguration. And the density facilitated by Metro has helped to make Washington and the inner suburbs extraordinarily green, with transportation emissions well below the national average (and well below those of their exurban counterparts in the metropolitan area).
Which isn’t to say that electric vehicles won’t be a part of the solution to climate change and a greener transportation system. They will be. It is to say that there might be far better uses of scarce government resources than piles of subsidies and assistance for the Chevy Volt and the company that makes it (which, it can’t be stated enough, devotes millions in lobbying dollars to fighting climate change legislation). If we’re going to support technologies, let’s at least support those with a record of success and proven demand.