Understanding Clean Car Incentives (Part One)

Julian Barragan and Lisette Jones

Date: 10/14/2022

Hi Let’s Green CA! readers, we’re Julian and Lisette, two research interns with Let’s Green CA! as well as college seniors graduating with degrees in Environmental Studies from UC Santa Cruz.

In our time interning for LGCA, we’ve had the opportunity to delve into research on subsidies and incentive programs for clean cars — right as Let’s Green CA!’s very own clean car equity bill SB 1230 became law! Understanding what clean car incentives are, why we need them, and what effective incentive programs look like will help to shape California’s clean car revolution. We are excited to share all we’ve learned in this three-part blog series!

So What Are Clean Car Incentives and Why Do We Need Them?

Clean car incentive programs offset the cost of clean cars with financial incentives (typically in the form of a rebate or stipend) so that purchasing a gas car makes less financial sense than purchasing its clean counterpart. The goal of clean car incentives is to accelerate our transition to clean cars to protect our people and planet rather than wait for that eventual shift to occur.

Zero-emission vehicles (ZEVs) include battery-electric vehicles (BEV), plug-in hybrid electric vehicles (PHEV), fuel-cell electric vehicles (FCEV), and hybrid electric vehicles (HEV). While these clean cars have a much lower carbon footprint than gas cars, their use has historically been limited to an affluent consumer base that can afford to purchase these vehicles and install private charging stations. The 2017 National Household Travel Survey found that clean car adoption is primarily occurring in the $200k+ income bracket — the nation’s highest income category. This financial barrier to clean car adoption is compounded by a geographical barrier: clean car use is geographically limited to regions where there is strong institutional support and infrastructure for them. Many low-income drivers living in urban zones are financially unable to adopt clean cars; furthermore, rural communities that lack clean car infrastructure are altogether excluded from this market.

Source: The Conversation, CC BY-ND

Why We Need to Boost Adoption of Zero-Emission Vehicles

The global climate crisis is not slowing down, nor are the vehicles on our roads that fuel it. Our dependence on fossil fuels is leading us down a dangerous path with disastrous implications for rising sea levels, more frequent and intense droughts, shrinking biodiversity, and societal instability. Despite many nations’ efforts to curb global warming, the production and burning of gas by traditional, gas-powered vehicles continue to warm our planet. In California, 40% of total emissions come from the transportation sector, making it the single largest source of GHG emissions. Tailpipe emissions from gas-powered vehicles are not only heating up the planet, it’s also one of the leading sources of toxic air pollution. Today, 135 million people live in communities affected by toxic air pollution in the U.S., and people of color are nearly three times as likely to be exposed to heavily polluted air compared to white Americans. Disadvantaged communities, who often reside near high-traffic zones and drive older cars, unequally experience the worst effects of vehicle pollution. A total transition to zero-emission vehicles and renewable energy by 2035 would avoid 110,000 premature deaths, 3 million asthma attacks, and over 13 million workdays lost due to air pollution, according to the American Lung Association.

Are Clean Car Incentives Catching On?

Some U.S. states, like California (which has the strongest tailpipe standards in the U.S.), as well as many other nations, have spearheaded the global movement to reduce the world’s GHG emissions through the promotion of environmentally friendly zero-emission vehicles. These vehicles and the infrastructure they require can have high up-front costs however, so government-run financial incentive programs (i.e., giving people money to incentivize a specific purchase) have become a popular and successful strategy to promote clean car adoption over the years.

Vice President Kamala Harris was instrumental to the Inflation Reduction Act’s passage by providing the tie-breaking vote in the Senate.

But Clean Car Incentives Aren’t Enough By Themselves

One final hurdle for clean car adoption is the availability and accessibility (especially to rural and marginalized communities) of EV charging stations. The EV charging infrastructure has to exist first before transitioning to an EV makes sense.

Now that we’ve covered what clean car incentives are, why we need them, and the many barriers preventing a clean car revolution, stay tuned for our next blog where we’ll look at some of the best clean car incentive practices implemented across the US and around the world and see what lessons we can learn!

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