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By Ben Jervey
As federal support for electric vehicles (EVs) is expected to wither under the Trump administration, state-level policies will play the biggest political role in how quickly battery powered motors replace the internal combustion engine.
Yet, at this critical moment when state governments should be supporting zero-emission vehicles, many states are cutting their incentives, while others are penalizing EV drivers outright.
In a recent article for the New York Times, Hiroko Tabuchi explores a number of efforts underway in state capitals across the country that are making the transition to electric cars a steeper uphill climb.
These speed bumps take two main forms:
1. The canceling of tax credits that support EV sales and leases.
2. New registration fees that disproportionately penalize battery-powered vehicles.
These legislative attacks on EVs bear the fingerprints of Big Oil, which sees the electrification of the transportation sector as the biggest single threat to the oil industry. Groups funded by the likes of ExxonMobil and the Koch brothers are supporting the measures and in some cases, even writing the bills.
State Financial Support for EV Sales Slacking
Over the past decade, nearly half of all of the states and the District of Columbia have had some kind of financial incentive for EV sales on the books—typically in the form of an income tax credit or a straight-up rebate. But this support is fading, as some states cancel the incentives and others let them expire.
Today, only 16 states (plus the District of Columbia) still offer tax credits or rebates and at least two states are voting in the current legislative session on whether or not to extend or repeal the benefits.
In Utah, a bill that would have extended the state's EV tax credit (of up to $1,500) through 2021 was just voted down, failing by a single vote. Meanwhile, in Colorado, which had offered the country's most generous EV incentive, legislators will soon vote on a bill that would cancel the $6,000 tax credit for purchasers of EVs.
As Tabuchi noted:
"The measure in Colorado has been backed publicly by Americans for Prosperity, an advocacy group founded by the conservative billionaire brothers David H. and Charles G. Koch, whose wealth is founded on their petrochemicals empire."
The rollback of sales incentives has come at the same time as many states are introducing new fees that directly penalize plug-in owners for their choice to drive zero emission vehicles that charge off the local electric grid.
Registration Fees for EVs
Coming into the 2017 state legislative sessions, 10 states impose extra fees to register electric vehicles.
This year, policymakers in nine states have introduced legislation that would charge a higher rate for EV registrations than for conventional internal combustion vehicles. (Another state, Illinois, is debating a bill that would raise the EV registration rate, which is currently lower, to match gas-powered vehicles).
Kansas and Indiana are both debating a $150 annual fee. Montana started out with a bill featuring a $300 annual fee, but that was negotiated down to $95 per year, which passed their house and has moved into the state senate. New Hampshire, South Carolina, Minnesota, Arizona and even California have some sort of EV fee winding through the legislature.
Proponents of higher EVs fees say that they are necessary to ensure that plug-in cars pay their fair share for the roads. Typically and universally within the U.S., highway funds are raised from revenue from gasoline taxes. Because EV drivers don't buy gas, they aren't chipping in for those highway funds.
However, the Sierra Club's Electric Vehicles Initiative director, Gina Coplon-Newfield, told DeSmog that this argument fails the tests of basic math, saying, "When you look at the financial numbers, they don't add up at all."
First of all, Coplon-Newfield noted, "conventional vehicles have become far more efficient" and aren't consuming as much gasoline and therefore aren't generating as much revenue for the highway funds. Second, "gas tax charges have not been in sync with inflation."
Coplon-Newfield gives the example of North Carolina, where the state is hoping to raise millions for their highway fund. If you raised the gas tax by one cent per gallon, the state would raise an extra $7.5 million. Contrast that with the total revenue raised from EV registration fees in 2014: $440,000. Even if the state is registering three times as many EVs today, it's still millions short of the goal.
There are other reasons that EVs should be given a break on registration fees—they actually cause less road damage given their light weight and improve air quality and benefit public health because they don't have tailpipes.
Georgia: A Cautionary Tale
For a look at what happens when a state both kills incentives and starts charging EV drivers extra fees, you only have to look to Georgia.
Just three years ago, Georgia was an unlikely national leader in electric vehicle sales, boosted by one of the nation's most generous state-level EV tax incentives that offered drivers a tax credit of up to $5,000 when buying a plug-in vehicle. By early 2014, Georgia trailed only California in EV registrations. Then, in January 2015, a new measure slipped into the state's $1 billion transportation bill which killed the credit and added another $200 annual fee for EV drivers.
Electric car sales immediately fell off a cliff.
Overall EV sales dropped by 90 percent and sales of the Nissan LEAF are off nearly 95 percent, according to Don Francis, the coordinator of Clean Cities-Georgia and executive director of the Partnership for Clean Transportation.
"In January 2015, state Representative Chuck Martin, an Alpharetta Republican, introduced a bill to kill the state credit partly on the argument that it gave electric vehicles an unfair advantage over other low-emission cars such as the Chevrolet Volt. Martin's measure got lumped into the $1 billion transportation bill, which raised the state's gas tax to pay for road improvements. As if that weren't enough, lawmakers slapped electric vehicle owners with an additional $200 annual fee on the logic that it wasn't fair to make drivers of gas-powered vehicles bear the entire cost of road maintenance. When the new laws went into effect on July 1, the emerging electric vehicle market was immediately eviscerated. Statewide registrations plummeted from 1,338 in June to 115 in October."
But there's more to the story. Martin's bill looks similar to model bills that have been pushed by the American Legislative Exchange Council (ALEC), a Koch-funded entity that pushes fossil fuel–friendly agendas through state legislatures.
As the Center for Media and Democracy has noted, ALEC recently began pushing the Koch's anti-EV agenda:
"At the American Legislative Exchange Council (ALEC) meeting in Scottsdale, Arizona in December 2015, the Energy, Environment and Agriculture Task Force heard a presentation on 'State and Federal Subsidies for Electric Vehicles,' then voted on a resolution to discourage states from providing subsidies, the 'Resolution Regarding Subsidies for Electric Vehicles.' The Kochs have long funded ALEC. Koch Industries has had a seat on ALEC's 'Private Enterprise' board for years, while Koch network entities like Freedom Partners, Americans for Prosperity and Koch-funded 'think tanks' have seats on a number of task forces where they get a vote on bills."
Meanwhile, also in 2015, Georgia started charging EV drivers extra registration fees. The extra $200 per year to register the vehicle probably doesn't have the impact of losing the $5,000 tax credit. But it sure doesn't help.
As evidenced in the registration numbers pictured in the chart above, Georgia is no longer a national leader in electric car sales. In Georgia and nationwide, the transition to electric cars seems inevitable. It just might take a decade or two longer if left to market forces alone. In terms of public health and the climate, those years shouldn't be wasted.
As Coplon-Newfield put it, "Now is the time to be incentivizing, not penalizing, electric vehicles."
Reposted with permission from our media associate DeSmogBlog.
EcoWatch Daily Newsletter
By Randi Spivak
Slashing two national monuments in Utah may have received the most attention, but Trump's Interior Department and U.S. Forest Service have been quietly, systematically ceding control of America's public lands to fossil fuel, mining, timber and livestock interests since the day he took office.
A new report by Greenpeace International pinpointed the world's worst sources of sulfur dioxide pollution, an irritant gas that harms human health. India has seized the top spot from Russia and China, contributing nearly 15 percent of global sulfur dioxide emissions.
By Sue Branford and Thais Borges
Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:
Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.
Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."
According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.
The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.
But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.
The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.
Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.
An Uncertain Future
The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.
Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.
There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.
Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).
Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.
One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).
Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."
Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.
The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.
The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."
Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.
Hydro / Halvor Molland / Flickr
Alternative Amazon Funding
Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.
In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.
Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."
Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."
Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.
Council of Hemispheric Affairs
Looming International Difficulties
The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.
In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.
But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."
The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."
Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.
Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.
Senado Federal / Visualhunt / CC BY
Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."
Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.
Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."
- Brazil's New President Could Spell Catastrophe for the Amazon ... ›
- Amazon Deforestation Increase Prompts Germany to Cut $39.5M in ... ›
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By Simon Mui
States across the country are stepping up to make clean cars cheaper and easier to find. Colorado's Air Quality Control Commission (AQCC) voted Friday to adopt a Zero Emission Vehicle (ZEV) program that will increase the availability of electric vehicles in the state, improve air quality and increase transportation affordability.