Gasoline Car Bans Show Why Market Forces Aren’t Always Enough

Green Automotive

Old habits and old technologies often find a way to stick around

t’s been a strange year, so you’d be forgiven for missing an odd thing that happened in the U.K. last month. When Prime Minister Boris Johnson, leader of the Conservative Party, banned sales of new internal combustion engine cars from 2030, the decision was supported by the likes of oil giant Royal Dutch Shell Plc and the Confederation of British Industry, a powerful business group.

How did these champions of market-driven policies and fewer regulations become promoters of such a heavy-handed intervention?

Perhaps the ban is simply something any competent government, regardless of its political bent, should be doing. The U.K. has a legally mandated goal to reach net-zero emissions by 2050. That means quickly cutting emissions from all sectors, including transport. Last year, the government’s independent advisor, the Climate Change Committee, recommended the 2030 ban as a way of meeting the U.K.’s climate targets. Maybe Johnson just accepted the wise advice.

But there’s likely a deeper reason, too. “As long as established sources work well, are readily available, and are profitable, their substitutes, even those with clearly superior attributes, will advance only slowly,” writes Vaclav Smil, one of the world’s foremost scholars on the energy transition (and one of Bill Gates’s favorite authors).

Electric vehicles (EVs) are superior to their ICE cousins. They’re quieter, more powerful and more comfortable. They don’t clog up the air with tailpipe emissions, and they are vastly more energy efficient. For many people, such as those with daily long-distance commutes, an EV’s lifetime cost including upfront purchase price and fuel spend is already lower than ICE cars. The CCC showed that the U.K. banning new ICE car sales 10 years earlier than it previously planned would save Britons more money sooner.

Put another way, the U.K. has left incentivizing clean transport so late that only a ban on new ICE car sales may now provide the push needed. Johnson’s move is certainly a heavy-handed intervention, but at least it’s not going against the tide of technology and economics. It’s pushing the transition to go faster in the direction that market forces were already heading.

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