Ecofriendly wheels can't get a break

Despite being ultra-low-emission vehicles, hybrids are denied government incentives, while dirtier competitors get the OK.

By Damien Cave
September 11, 2000 11:00PM (UTC)
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When Daanon DeCock discovered that the Toyota Prius qualified as an ultra-low-emission vehicle -- meaning that it burns about 90 percent cleaner than a traditional car -- he rejoiced. Not only could the Arizona resident help the environment by purchasing a car that mixed electric motors with a high-tech, internal-combustion engine, but by doing so, he figured he could cut the $21,000 sticker price by more than half, qualifying for a $2,000 federal tax credit and an Arizona state rebate of up to 50 percent of the cost of the car.

Unfortunately for his checkbook and the Arizona air, he figured incorrectly.


"It doesn't make any sense," says DeCock, a 30-year-old software tester in Tempe. "These incentives seem to be based on the emission rating, but here's a car that has an extremely low emission rating and it didn't qualify. It's extremely frustrating."

What gives? Why is the federal government unwilling to offer incentives for environmentally friendly hybrids like the Prius or the Honda Insight? And why aren't states like Arizona and California eagerly subsidizing these ecofriendly cars as they're doing for other options, like Ford F-150 trucks that run on propane?

The Department of Energy's Office of Transportation Technologies Web page offers an answer, stating that "because the [hybrid vehicles] on the market today do not use alternative fuels (they use gasoline), they can't be considered for credits" under Energy Policy Act.


And Richard Varenchik, spokesman for the California Air Resources Board, the state agency that regulates emissions, says that hybrids don't deserve special treatment because gasoline is simply a dirtier fuel than alternatives such as propane. So even hybrid advances like bladder gas tanks -- which contract and expand according to the fuel level, thus decreasing evaporative fumes that are precursors to ozone -- don't do much good. Plus, because of gasoline's more complex chemical makeup, it will soil everything it touches.

"A gasoline-powered vehicle will suffer some degradation," he explains. "It won't be as clean at 40,000 miles as it was at 4,000, which is why anything that has a gasoline engine can't be as clean as one that doesn't."

But experts insist that energy departments are dodging the issue, focusing more on politics and legal technicalities than on the environment. By accepting the "alternative fuels" language of the law, they're eyeing what goes into a car at the expense of what comes out. And in the process, they're perpetuating a system that hampers the rise of ecofriendly cars and essentially punishes consumers like DeCock who would like to help, but don't want to spend over $20,000 for what is essentially a low-budget compact.


"There are no compelling reasons not to make these cars eligible," says Dan Kammen, professor of energy and society at the University of California at Berkeley. "It's ridiculous. These hybrid vehicles are significantly cleaner and they should be supported."

In fact, they represent the dominant innovation for the next decade in terms of fuel efficiency and pollution reduction, says David Nemtzow, president of the Alliance to Save Energy, a Washington nonprofit that lobbies for energy efficiency. Zero-emission options like cars that run solely on electricity are years away from being viable, and the infrastructure isn't in place. That's why only a fraction of the cars on the road -- 2,000 out of millions in California, for example -- run on alternative fuels.


"You simply can't recharge a battery as easily as you can fill a tank with gas," he says. "That's why hybrids are so vital. You can just fill them up, which is to say that their weakness is their greatest strength. They make for a perfect transition."

And if laws aren't rewritten to subsidize them, the country faces two big risks: "One is that hybrids will not catch on quickly. Therefore, we'll be wasting gas and creating pollution that's completely unnecessary," he says.

"The second risk is that we'll relive the '70s, which is to say that Toyota and Honda will outpace the domestic car companies." In other words, when the public -- perhaps disgusted with pump prices of $3 per gallon -- gives up once again on gas hogs, Japanese carmakers will be the ones that benefit.


Indeed, the legal technicalities that allow hybrids to be singled out appear to be rooted in the '70s. When the oil-producing nations of OPEC drastically cut production in 1973, causing world oil prices to double, Americans realized their dependence on foreign oil and sought to overcome it with policy. Over the past 20 years, several amendments to the Clean Air Act set increasingly high standards of fuel efficiency for the car industry, while federal funding went toward non-gasoline research and development.

More recently, the legacy of this stance can be seen in the Energy Policy Act of 1992 (EPAct). This is the the law governing which vehicles receive federal rebates, and according to the Department of Energy Web site, Congress passed it not to help the environment but rather "to accelerate the use of alternative fuels in the transportation sector."

Another document goes even further, stating explicitly that in implementing the EPAct, "the U.S. Department of Energy's primary goals are to decrease the nation's dependence on foreign oil and increase energy security through the use of domestically produced alternative fuels."


"Emissions," "environment," "pollution" -- these words don't seem to appear anywhere in the act. "Congress was looking backward not forward in 1992," Nemtzow says. "There were enough people in Congress then who remembered the embargo of the '70s, and that's why the language reads as it does."

The U.S. Department of Energy didn't return phone calls requesting a response.

Meanwhile, Arizona's stance mirrors the federal law. "Diversifying our fuel source, moving away from foreign oil, was a major goal when we enacted the rebate legislation eight years ago," says Amanda Ormond, energy director of Arizona's Commerce Department. Thus, the hybrids are not covered under the rebate plan precisely because they do not meet this criterion.

"The hybrid is a very clean vehicle and it goes very, very far on that gasoline, but it's not an alternative fuel," she says. "We subsidize alternative fuels for two reasons -- to increase fuel diversity and to clean the environment. Hybrids cover one of these, but not the other."


Toyota and Honda, the only two companies with hybrids on the market, don't seem worried about seeing their high-tech darlings left out. One Toyota spokesperson says the company isn't lobbying for legislative change, although another says it is. Honda is maintaining a hands-off approach. "That's a question for the government to decide," says Honda spokesman Art Garner of the incentives system.

Perhaps this is because both companies are treating hybrids like concept cars. They expect to sell fewer than 20,000 combined, a number that looks especially weak considering that Toyota expects to sell 230,000 Corollas in the same period. And Garner says Honda is happy with its hybrid model even if it sells only a few of them because they portray Hondas as "the most fuel-efficient, cleanest-burning cars in the industry."

But by diminishing these cars' potential and adhering to a '70s-inspired law, the automakers, Congress and state governments are all sitting back and allowing an environmentally unfriendly system to thrive. At the very least, they're perpetuating a confusing state of affairs, one that could put off people who are considering an ecofriendly vehicle.

Consider DeCock's story. When the air conditioning died in his 1991 Corolla, he found himself in the market for a new car. He didn't intend to save the environment; he just wanted a reliable, four-door car for about $15,000. But while checking out the Honda Civic, he discovered its natural gas model. It cost just over $20,000, but the state promised a 40 percent rebate. The car would have cost about $12,000.


But when DeCock test-drove the Civic, his 6-foot-5 frame didn't fit comfortably. Plus, his wife, Michelle Aron, heard about a Harvard University study pointing out that compressed natural gas could be even more dangerous to human health than diesel fuel.

So the couple kept looking. "I didn't want a bigger American gas hog like the [Ford] Taurus," DeCock says. And since he'd been happy with his Corolla, he headed for the Toyota Web site. "And there it was -- a four-door, five-passenger, practical hybrid-electric vehicle, the Prius."

He tried one out, found it comfortable, marveled at the average efficiency of 45 miles per gallon and then did the rebate math. He knew that the Ford F-150 truck -- which many owners convert after purchase into a bifuel vehicle that can use both natural gas and traditional gas -- burns only 60 percent cleaner than a traditional gas vehicle, but still qualifies for a rebate. Even though there was no way for the state to force people to fill its tank with natural gas instead of regular unleaded, this was the case -- and still is, according to Ormond -- which is why DeCock believed that the gas element wouldn't be a problem. He didn't expect any trouble getting a rebate or the federal tax credit. But of course, he did run into trouble. Both incentives apply only to cars that gain 70 percent of their power from sources other than gasoline. And since, unlike the Civic or the Ford truck, the Prius' gas-to-electric ratio varies beyond measurement (highway travel requires more gas than stop-and-go traffic), it qualified for neither.

None of this drove DeCock away. He ended up putting money down on a Prius. But he says that he would have traded in his wife's Saturn, too, if he could have received a rebate. More Americans, he believes, would do the same if the Prius didn't cost $5,000 more than comparably equipped cars like the Corolla or Civic. And ultimately, he says, costs matter less than the law's misplaced focus. We have a Clean Air Act, not a Reduce Dependency on Foreign Oil Act, he says, noting that what comes out of the tailpipe should matter more than what goes into the gas tank.


There is little chance that this xenophobic focus of the law will change. Although Congress is considering a bill that would offer a $2,000 tax credit to hybrid buyers, and several states, including New York, California and Connecticut, are also discussing the topic, these plans largely keep intact the outdated overemphasis on foreign-oil dependency.

"It doesn't make any sense," DeCock says. "If you can have a car that reduces emissions by anywhere from 70 to 90 percent, there should be an incentive. It should be that simple."

Damien Cave

Damien Cave is an associate editor at Rolling Stone and a contributing writer at Salon.

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