An initiative to clean up the air in California

California has the worst air pollution in the country. According to the California Air Resources Board, over 90% of us live in areas where the air is unsafe to breathe. These areas violate both State and Federal clean air standards. That's why California is the only state in the union authorized to pass it's own environmental laws. And 75% of our air pollution comes from motor vehicles. It's been this way for over 30 years.

Today, the real controversy is whether the current federal and state standards are strict enough to really protect public health. There is some evidence that the current standards are too lax, particularly in protecting the most sensitive groups, like children, senior citizens, and individuals with respiratory problems (asthma, etc.). The point is, even the 90 percent figure may be TOO LOW if it is determined that the current standards are too lax.

So that's why the California Air Resources board mandated that 10% of the vehicles sold in California in 2003 must be Zero Emission Vehicles (ZEVs).

Unfortunately, it simply isn't going to happen by merely requiring car manufacturers to sell more ZEVs. The adoption rate of ZEVs is tiny. Only about 500 are sold each year. The goal is sell 100,000 vehicles per year to meet the 10% requirement (the 10% is based on the million new vehicles sold in California each year by just the big seven).

So if you want to fix the problem, you must provide a reason for consumers to purchase these cars and eliminate or reduce their objections. Namely, you must do two things:

  • reduce the cost of ZEVs to be equal to or less than a gas vehicle, and
  • compensate for the inconveniences (6 hour recharge time and 120 mile range) by providing compensatory special "privileges"

California just recently did something to address the convenience issue. Thanks to work done by California Assemblyman Jim Cunneen, CalETC, and the Kirsch Foundation, we passed a law in California (AB 71) that enables single occupant ZEVs to drive in the HOV lanes starting mid-2000. In addition we are currently working with various cities (San Jose and San Francisco) to provide free parking for ZEVs  at parking meters and airports.

But not enough has been done to address the cost issue. There is a small subsidy now, but the cost of an EV is still about double that of the equivalent gas vehicle model. So that's why we need legislation to seriously subsidize the cost of ZEVs. Once we have that, the special incentives and inherent advantages of a ZEV should be sufficient to really launch these vehicles.

Is promoting ZEVs the right way to clean up the air in California?
Since most of our pollution is caused by motor vehicles, this is a logical starting point.

Consider this. Suppose we got up to the dream rate of 10% of the cars sold each year being electric cars. Since there are 25M gas vehicles, and ZEVs are virtually pollution free, and there are about 1.5M vehicles sold each year, it would still take 16 years before we'd see a 10% improvement in our air quality (assuming the number of vehicles in California remain constant which of course is not likely, but since gas vehicles get cleaner every year, this should compensate for this). That's insignificant.

So it's pretty clear that if you want to see a measurable impact on the air quality in California, you need to do three things:

  • make sure that new vehicles are cleaner and cleaner ever year
  • really encourage people to drive hybrids which emit half the pollution of a gas car
  • encourage as many people as possible to drive ZEVs

So let's take the extreme case. Suppose every single new car sold in California was a ZEV. Then in roughly 8 years, we'd see a 50% reduction in pollution in California. And in 16 years, we'd have the cleanest air in the country (assuming we continue to regulate industrial sources of pollution).

So you really want to incentivize ZEVs because they are so much more dramatically cleaner than hybrids, and because hybrids already have advantages over gas cars (longer driving range, higher mileage), they don't need special subsidies. ZEVs are about 100 times cleaner than a gas car, even when you consider the pollution caused by the electricity generation (in California, about 30% of our power is from green, renewable sources), which is the only pollution that there is since the ZEV vehicle itself is 100% clean. And if you choose to buy your power from a green source, ZEVs are truly virtually pollution free through their lifetime.

Note: I say "virtually pollution free" since although an EV1 never needs an oil change and the car and batteries are recyclable, there is probably some residual pollution and other ZEVs may not be as recyclable as the EV1, so it is never truly zero.

The proposal
The concept behind the proposal has been around for a long time. It's the concept of "feebates." Namely, you charge the polluters a small fee and return that money to people who are not polluting.

The practical problem of passing such a program is that California governors always veto it. Gray Davis is no exception to the rule. He will veto it because he has pledged "no new taxes." So the initiative is the only way to get something passed. But an initiative wouldn't likely pass the voters since virtually everyone drives a gas car and although air quality is important to everyone and in their long term best interest, it's too easy to vote against something that costs you money.

So I came up with a unique twist on the idea. Since you only need a majority of voters to vote for the initiative, make sure you have a clear majority of support by introducing one small little change: Don't charge everyone a fee. Just charge an additional $35 annual "pollution fee" to the 35% of vehicle types that are the worst polluting at the time you renew your DMV registration. Then you take this pot of money and pay up to $3,500 per year to ZEV owners (subject to the size of the pot). So the bad guys subsidize the good guys in a zero sum game. Excess funds stay in the pot and can be used in subsequent years .

So in the early days, where there are few ZEVs, everyone gets the $3,500 maximum subsidy (you don't want to subsidize at a higher level than this because it isn't required and you want to maximize the number of people who can get the maximum subsidy) which, by making ZEVs cheaper than gas cars, really helps drive ZEV demand and kick start the production volumes. As the installed base of ZEVs grows above around 100,000 vehicles, the subsidy per vehicle decreases from the maximum amount simply because it is divided among more ZEV owners. But by that time, mass production learning curves have reduced the price of a ZEV making it still more attractive to purchase than a gas car. The NRDC website on EVs reveals this is a very plausible argument.

Why an initiative
Davis won't pass any "new taxes". So the only alternative for passing a new tax is to do it through the initiative process. And since 65% of the voters will NOT be taxed under this initiative, the "sales pitch" to those 65% is:

"This won't cost you a dime. The worst polluting vehicles will pay a $35 subsidy each year to the cleanest vehicles. You'll be able to breathe cleaner air at no charge to you. California has had the worst air quality in the US for over 30 years. Are you ready for change?"

Arguments against the initiative
Truckers won't like it. Rich people who drive SUVs won't like it. Poor people who drive older polluting vehicles won't like it. The truckers will say that this new tax will increase the price you pay for goods because they'll have to raise their salaries an extra $35 per year to pay the tax. Not very credible.

Since it affects rich and poor people, it doesn't target a socio-economic class. It is completely class blind. You pollute, you pay. It's that simple.

How we will make it happen
We are looking into hiring a great political consultant to get it drafted so that it won't be challenged as unconstitutional or attacked as unworkable. And then we'll spend a few million dollars our own money for TV campaigns and press tours to get the word out (since this sort of thing can't be paid for by a non-profit foundation).

How you can help
Would you vote for this? If not, is there a way to modify the proposal so that you would? Let me know via e-mail:



Why not index the $35 to inflation?
Good idea.

Are ZEVs really practical?
We own two; one for my wife (an electric RAV4), one for me (EV1). We drive them all the time. I drive my EV1 59 days out of 60.

Why not include ULEV hybrids?
The more vehicles you include, the lower the subsidy per vehicle. ULEVs get better gas mileage than a regular car and are competitively priced, so they don't need a subsidy.

EV California, which contains a bar graph comparing the emissions of the ULEV Hybrid Honda Insight to a battery EV. The Insight produces 587.5 kilograms of pollutants over its lifetime, but the pure EV produces only 2.9 kilograms. In other words, the pure EV produces less than 1% of the pollution of the ULEV hybrid Insight, even when powerplant emissions and similar "upstream" emissions for the Insight are factored in.

Why not tack on bumping up the schedule for requiring SUVs to meet passenger car emission standards?
It complicates the decision process to include more than one issue at a time. Also, CARB is already pursuing this goal.

Why not just mandate that vehicles should be cleaner and cleaner every year and leave it at that?
We've already done that in California for the past 20 years, haven't we? It hasn't worked, has it? So incremental improvements don't buy you much. This makes perfect sense. Even if ALL new vehicles were 100% clean, it would still take 12 years before you see a 50% reduction. So you really want to incentivize ZEVs to be sold if you really want to see a difference in our lifetime. The other thing about ZEVs is that they stay pollution free over their lifetime unlike gas vehicles which can be de-tuned or break and emit 10 times or m
ore pollution as a normal vehicle. 

From NRDC website on EVs

No single measure can solve the complex problems of urban smog, air toxics, and fine particle pollution. But electric vehicles are a critical component. ZEVs and other alternative vehicles such as fuel cells are among the only measures which become cheaper over time (as the technology becomes more widespread and efficient), become cleaner as the utility mix becomes cleaner, and address smog, air toxics, fine particle pollution and greenhouse emissions simultaneously.

Large numbers of EVs are part of California's State Implementation Plan to meet federal and state standards for healthy air. We literally cannot meet these standards without EVs. But this just means that if you take EVs out of the Plan then we will not meet the standards, unless they are replaced with some other way to reduce emissions. At this point, however, the State does not know how to get additional emissions reductions. In fact part of the Plan is a reserved "black box" of future emissions reductions based upon technological improvements which are yet unforseen. We don't even know how to fill the "black box" at this time, much less add to it.

Isn't this just taxing the poor to provide a subsidy for the rich, who are the only ones who can afford ZEVs?
Rich people won't abandon the comfort and luxury of their Ferraris, BMWs, and Mercedes for a ZEV for an extra few thousand dollars. Instead the subsidy will allow normal and poor people the choice of which vehicle they want to drive: an inexpensive, non-polluting, but somewhat inconvenient ZEV, or a normal gas vehicle. And the tax affects rich SUV drivers (which there are a lot of it seems) as well as poor drivers of older cars.

What modifications have been suggested to the original proposal?
a) allow the 65% who drive the cleanest vehicles an option to contribute to the fund as well
b) allow wealthy ZEV drivers the ability to refuse the subsidy
c) don't pay the subsidy to anyone earning over a certain amount of income
d) exempt really poor people from the $35 fee, e.g., if they drive a really old car, exempt them
e) increase the $35 annually based on inflation
f) base the fee on the actual measured pollution of their last smog check
g) just re-allocate where the smog check fees go
h) instead of doing this tax, just make the initiative into a $3,500 tax credit if you own or lease a ZEV! that makes it simple and hard to argue against.

So if you are reading this and would vote against the measure as originally drafted, which of the above modifications would cause you personally to vote for the measure? If none apply, please create a modification and I'll add it to the list.

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How we plan to clean up the air in California
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