Course:ECON371/UBCO2011WT1/GROUP 7 -

Article

http://www.greenprogress.com/transportation_article.php?id=1785

Summary

This article covers the decision made by two U.S. firms, 350Green and Coulomb Technologies, to build 400 new electronic vehicle (EV) charging stations. The announcement brings the total number of charging stations operated by 350Green to over 1000. It is the largest network of independently owned charging stations. While this may not have a noticeable effect on vehicle emissions, it is definitely a step in the right direction. Projects are underway in many states such as New York, Pennsylvania, Illinois, Indiana and California and convenient locations for charging stations are being achieved through partnerships with retailers and real estate developers. The ChargePoint system that 350 Green will be adopting at all its stations will be able to track economic data such as revenues and costs. Consumers also benefit from ChargePoint, getting features like 24/7 roadside assistance and phone apps that preform tasks like locating the nearest charging station and keeping track of the car's charging status. Mariana Gerzanych, co-founder of 350Green said "this agreement...[will] provide us and our location partners with user-oriented features and host-oriented information and data".

Annalysis

There are many issues of interest here. To begin with, I assume that the planned increase in electric vehicle charging stations would be correlated with an increase in EV themselves. Analysis can be made of the costs and benefits associated with the emergence of an EV market and the supporting infrastructure it necessitates. On the cost side, an interesting question is whether the cost of waste generated by replacing gasoline cars and and gas stations would be offset, greater or lesser than the benefit of the reduction in emissions it would achieve. It would be interesting to see whether a marginal cost per replaced car could be found and computed versus a marginal benefit per replaced car, and if so, the equilibrium point of the two would give policy-makers a good objective in terms of giving incentives to reach this point. Another aspect of cost analysis is how is the electricity being generated? If it is being generated with coal or natural gas, is using electricity to power cars really more emission-efficient or less environmentally damaging than traditional fuels? If the power is being generated by renewable sources such as dams or wind turbines, are there any costs associated with these alternative means (such as destruction of ecosystems) that might outweigh the benefit achieved by an increased number of charging stations/electric cars on the roads? Assuming the emergence of an EV market decreases demand for gasoline cars and gasoline, does this have any long-term negative impacts on employment? will the emerging electric industry require as much labour as the fairly labour-intensive fossil fuels industry? If so can we assign a dollar value to the loss, perhaps based on employment insurance collected by former fossil fuel industry workers?

What are the benefits of a greater number of electrical cars and how can we calculate them? One way to quantify the obvious health benefits associated with less emissions would be to monitor hospital visits due to air-bound pollutants over time and see if they fall in relation to the increasing number of electric cars and/or the decreasing amount of emissions - and by how much relative to one-another. Is it possible, through probability calculations, to put a dollar value on the benefits gained by using electric cars and avoiding oil-related disasters like oil spills, pipe leaks and the destruction of ecosystems? In terms of the benefits associated with more charging stations, I believe this alone would act as an incentive for consumers to consider switching to EVs. However, should governments also be offering incentives to increase their appeal? if so, which method of incentive would be most effective for this particular market? I believe a tax incentive on electricity used to power electric cars could work seeing as people already readily identify with the burden of paying tax on "fuel", and would instantly see the benefit. If a government incentive to switch to electric cars were approved, I believe that a federal incentive would be most appropriate since air pollution is a non-point source pollutant and is obviously a national issue. Since air quality is a public good, to prevent free-riding governments could impose an even larger tax on gasoline, specific for purposes of dealing with emission-related costs. This would act as a double-edge sword. On one hand penalizing those who emit harmful emission, and on the other offering another incentive to switch to EVs.

Prof's Comments

Good job. Incentives could take the form of a subsidy for electricity and/or an increase in the tax on gasoline, as you say. Another approach is a subsidy to help offset the cost of purchasing an EV. If the availability of charging stations is the issue, then subsidies to help get these set up could increase the market for EVs, as people are more likely to buy them if they know they'll be able to charge them up when they are at the store, at work, etc.

10/10