There is a lot of push back against the proposal to ban Fossil fueled Internal Combustion Engined (ICE) cars in 2030, 2035, 2040 or whenever.
For context, small vehicles are one of the lowest hanging fruit in terms of climate mitigation.
It is listed as part of the first step (A) on the electrification staircase from Michael Liebreich and fellow experts in electrification.
It is low-hanging fruit because there is already an alternative (Battery electric vehicles) which are a better vehicle in almost every way. I've got an EV and it is much nicer to drive, much cheaper to own and much more convenient when you can charge it outside your house.
The only downsides of EVs are
- They can cost slightly more up front (though the gap is rapidly reducing and in some cases there is already price parity)
- They cannot be refueled as quickly (except when the vehicle is plugged in while the user is doing something else, which is how EVs are usually refilled).
From a liberal perspective banning things isn't ideal unless the product is really dangerous. Climate change is of course very dangerous, but the impact of emissions aren't immediate - it will affect people at some point in the future.
Why not abandon the ban and just make passenger cars net zero in another way?
I've got two alternative proposals for that...
Option 1: Require all fuel on sale to be net-zero e-fuels
People assume that they can continue to pollute without paying the cost. That is essentially the problem here.
My first alternative proposal is to insist that all fuels for sale get made in a clean fashion.
It is possible to make synthetic e-fuels (hydrocarbons) out of air (carbon), water (hydrogen) and renewable electricity.
Essentially, this means reversing the combustion process.
It would require huge amounts of renewable energy sources (wind and solar), of course. That might not be popular.
However, it is possible and it is the net zero future for combustion vehicles.
How much would it add to the cost of fuel?
The reason is physics. Combusting hydrocarbons releases a huge amount of energy, so doing the opposite requires a lot of energy.
Nature has made the fossil fuels for us. To make it ourselves will require huge amounts of renewable power and will cost a fortune.
The cost difference between running an efficient EV on cheap clean electricity and running an inefficient ICE car on expensive clean fuels will be such that you'd have to be an idiot to prefer the ICE car.
To make things worse, ICE cars would still cause more local pollution in noise and air pollutions (though e-fuels should have fewer impurities so might burn cleaner).
If people want to drive fossil cars so much then giving them the option to drive on e-fuels and let the various powertrains compete on a level playing field.
Makes sense to me.
However, the problem is that this proposed regulation could be removed just as easily as a carbon price might be removed by a future pollution-happy government.
Option 2: Add the carbon charge to the up-front cost
Calculating the up-front charge
It would be necessary to make assumptions in order to calculate an up front charge.
We don't know how many miles a car will drive. It might be written off in an accident after 200 miles, or it might last for decades and do 150k miles. It would be necessary to pick an 'anticipated milage' charge for each vehicle.
Different vehicles have different efficiencies as well, which could be factored in to mean that different vehicles would have a different charge.
The other factor would be the cost of carbon to input into the calculation.
But let's assume for my purposes here that an ICE car will generate 39 tonnes of CO2, going by this IEA analysis.
The big question, then, is how much it will cost to sequester a tonne of CO2 during the life of the vehicle.
That is also speculative.
At the moment, CO2 "carbon credits" are relatively cheap. This is because there is - again - low hanging fruit available.
Replacing coal or gas electricity with solar and battery reduces emissions and is also economically sensible.
As time goes on, those easy wins will be exhausted and we will end up having to suck carbon out of the atmosphere (with trees or big machines), turn the CO2 into a stable element (like a liquid, such as a fuel).
How much would it add to the cost of a car?
I'll give some rough figures depending on what the carbon price is...
- At £100 per tonne it would add £3,900 to the cost of a petrol car.
- At £256, then the charge would be £10,000.
- At £500, the charge would be £19,500.
- At £1,000 per tonne of carbon it would add £39,000 to the cost of the vehicle.
How much is the cost of carbon going to be in the future?
It will gradually increase over time, but where will it stop?
At some point the only option will be to suck carbon out of the air (direct air capture), convert it to a liquid or something and then to bury it underground. Essentially, this means making E-fuels and burying them in the places where we used to get fossil fuels from.
How much will this cost? No idea, but it will be somewhere between £500 and £1,000 per tonne of CO2. I expect it will be at the upper end of that, but if it is the lower end then we are still talking about £20k added to the cost of an ICE car.
Clearly no-one is going to buy an ICE car if they are charged even a few thousand pounds more for the privilege of polluting, let alone £20k.
Conclusion
Economists would generally agree that charging for pollution is better than banning things. Then people can choose which option they prefer.
The problem with carbon emissions is that people don't think that they will be charged for their carbon emissions because they haven't been in the past. People are used to passing on the costs of their pollution to future generations and poor people.
Perhaps that is reasonable. Maybe politicians will continue to give in to short-termist pressure from voters to reduce pollution costs.
Charging up-front for pollution is one way to achieve that.
What do you think?
How should we go about achieving net zero when it comes to passenger vehicles?
- Should we ban things that obviously have no future whatsoever in a net zero world?
- Or, should we only allow for fuels are clean?
- Or, should we add the cost on up front so that buyers doing make their choices expecting to avoid the cost of their pollution?
