Two ways to drive the electron economy

Choice: always a good thing?

First the good news: the new generation of lithium-ion powered electric cars are here. Nearly all mainstream auto manufacturers now have a development programme for electric vehicles and many governments see electric vehicles as an important part of their economic (jobs) / energy security / climate change / city pollution strategies. Some governments and municipalities have already implemented grant and incentive programmes. The price of electric cars will decrease as volume increases (EVs are forecast to be cheaper than ICE by 2020)< whilst performance - particularly range - will increase as the technology matures.

Now the potentially bad news: spread betting by the auto manufacturers who are developing a range of drive train options from 'clean' diesel, to highly efficient petrol and dual fuel engines, to plug-in hybrids and range extenders, may delay the transition to the electron economy, delay the end of our addiction to oil, delay the achievement of energy security and clean air in our mega cities. Governments understandably have a reluctance to pick winning technologies, preferring to set targets (the 'what') and let the market decide the method (the 'how').

The issue we face here is time. We just don't know how long we have before things 'tip'. Whether it is an economically dangerous surge in oil prices (already happening with increasing speed and frequency), a series of climate events (2010 was the hottest year on record and we experienced some very extreme weather events around the globe), or an energy security crisis (such as a successful terrorist attack on oil supplies that send prices into orbit).

Caroline Lucas, UK Green Party Member of Parliament believes we need a government led programme similar to that experienced in the UK in the 1940's, when wartime rationing was introduced. This time, Ms Lucas argues, it is just as urgent and important, this time it would be carbon rationing. Every citizen would receive a free carbon allowance, those wishing to consume carbon above this universal level would pay for the privilege. This would be underpinned by a very focused government communication programme to explain the what and why.

Another  way of speeding up the shift to the electron economy is to increase the reward for good behaviour and simultaneously increase the penalty for bad behaviour. A powerful and cost neutral way to encourage the purchase of pure electric cars is to introduce a Feebate system such as that launched in France in 2008. Electric vehicles are incentivised with subsidies whilst more polluting cars are penalised with additional taxes.  The result in France was an immediate lowering of new car emissions by 7g CO2 / km. This type of programme sends out a very simple and strong signal to manufacturers and motorists and nothing is more effective at changing behaviour than purchase price signals.

Is it time for governments to up the ante with stronger measures?