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Alan Reynolds, The Politics of Alternative Energy

Alan Reynolds, The Politics of Alternative Energy

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Published by Alan Reynolds
A crtiical review of green and geogreen arguments for subsidies for alternative vehicles (electric & hybrid) and alternative fuels (ethanol, natural gas, hydrogen). This is a draft chapter for a forthcoming anthology edited by a scholar from the Naval Graduate school in Monterey CA.
A crtiical review of green and geogreen arguments for subsidies for alternative vehicles (electric & hybrid) and alternative fuels (ethanol, natural gas, hydrogen). This is a draft chapter for a forthcoming anthology edited by a scholar from the Naval Graduate school in Monterey CA.

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Published by: Alan Reynolds on Apr 15, 2011
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09/13/2013

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[TYPE THE COMPANY NAME]
The Politics of Alternative Energy
 
Forthcoming in Robert Looney, ed., Oil Politics Handbook, Routledge.
 
Alan Reynolds2/1/2011
Unedited draft not for quotation or citation without permission of the author: aareynolds@comcast.net
 
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The Politics of Alternative EnergyAlan ReynoldsProponents of two quite different policy goals ± reduced oil imports (energyindependence) and reduced greenhouse gas emissions (climate stability) ± appear to share acommon presumption that U.S. passenger cars and the fuels they use are the single mostimportant key to solving both problems. As a result, actual and proposed energy or climate policy legislation typically puts extraordinary emphasis on tax exemptions, subsidies, andmandates for alternative fuels (94 percent of which is corn ethanol) and flexible fuel vehicles (95 percent of whichuse gasoline), as well as low-interest loans for manufacturers of electricvehicles, tax credits or rebates for buying electric vehicles, grants to state and local governmentsfor related infrastructure, as well as research grants to encourage the production and purchase of new vehicles primarily fueled by ethanol, methanol, compressed natural gas, hydrogen fuel cells,and/or lithium ion batteries.TheU.S. government is eager to give a $7,500 tax credit or rebateto those who can affordto buy a battery-powered $33,600 Nissan Leaf. The amount of that subsidy would be almostenough to buy the slightly smaller $9,900 Nissan Versa, one of the best-rated cars atgreencars.org. But people who buy a new Versa (or, more often, cheaper used cars) cannotafford the Leaf. For those who can afford a $41,000 Chevy Volt, the government will happilyhelp with a
de facto
check for $7,500. That $7,500would go a long way toward buying thesimilar gas-powered $16,995 Chevy Cruze, but the U.S. government disfavorsinexpensive carsthat use little fuel. On the other hand, Uncle Sam will kick in $7,500 toward the purchase of an$87,400 Fisker Karma or $109,000 Tesla roadster. There was a big public protest in India when
 
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their government proposed similar regressive handouts to affluent buyers of such pricey high-tech cars. American taxpayers appear more generous, or more docile.Unlike painful policy proposals that might seriously reduce greenhouse gas emissions(such as a carbon tax or cap and trade rationing plan) or painful schemes to slash oil imports(such as a tariff or quota on imported oil), the
 p
olitical 
campaign to subsidize alternative vehiclesand fuels has been enormously successful.The American Recovery and Stimulus Act of 2009 (ARRA) was the third law in fiveyears toraise subsidies foralternative fuels and vehicles. At least $90 billion in federal³stimulus´ funds were devoted to what was described asenergy technology innovation, green jobs and low-income energy efficiency assistance programs.Some $6.1 billionwas devoted toelectric cars, batteries and alternative fuels,and funds to electrify federal and state fleets. Senatemajority leader Harry Reid credited the Apollo Alliance for promoting this grab bag, which theorganization described as a down payment on the $500 billion they had had lobbied for.
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 That 2009 stimulus to energy interests followed the Energy Independence and SecurityAct of 2007 (EISA) whichrequired fuel suppliers to blend increasing quantities of biofuels intogasoline í 15 billion gallons of corn-based ethanol by 2015. That was a big increase from theEnergy Policy Actof 2005 which initiated mandates for the use of7.5 billion gallons of biofuels by 2012.In his 2007 State of the Union Address, President Bushcalled for mandating 35 billiongallons of biofuels by 2017, an incredible target equal to one-fourth of all gasoline consumed inthe United States in 2006.
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Not to be outdone, ³President Obama said during the presidentialcampaign that he favors a 60 billion gallon-a-year target.´
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