Picking Favorites
According to the St. Louis Post-Dispatch, a bill is being pushed that, if passed, would give tax breaks up to $2,000 for owners of hybrid vehicles. This move would serve as an incentive for Missourians to buy these greener cars and help out the environment. But do people really need another incentive to buy a hybrid? It’s already the cool thing to do. All the celebrities drive hybrids, and who wouldn’t want a car with much better gas mileage?
I fear there are political motivations behind this tax break idea, and that the well-being of the environment is not the primary concern. A tax break to buy hybrids does two things: First, like so much green legislation, it gives the policymakers a green image in the eyes of the public. With green policies being so popular, especially with young voters, they have a political incentive to pass it. I’ll just call this a positive externality, regardless of whether the intentions are positive. The new law would act as a Pigovian subsidy, encouraging individuals to reduce the emissions they might otherwise create by, in this case, buying more hybrids. The second result is obvious: Creating an additional incentive to purchase new, American-made cars will cast policymakers as heroes to automakers — companies that are more than willing to fund future campaigns if it will lead to legislation that increases their sales.
Like so many green ideas out there, hybrids are seen as flawless vehicles, but there are drawbacks, some of which do not apply to standard cars. For instance, materials used in hybrid car batteries are known carcinogens, and some materials in these batteries are quite rare; an increase in demand will drive up the costs still further. Of course, standard car batteries aren’t exactly safe for consumption either, being composed primarily of lead. But that is neither here nor there. What is surprising is that throughout the lifespan of both types of vehicles, including production and disposal, hybrids require more energy than traditional vehicles. This is reflected in their higher production cost. People are still willing to pay this extra cost if means staying green, and that’s the beauty of choice. But the proposed subsidy takes only one set of externalities into account, and so may not be promoting real efficiency.
Just to make the issue personal, signs like this are popping all over the place — including down the street from the Show-Me Institute’s office. Where will this end? I, for one, am tired of being villainized because I drive a regular vehicle. Where’s my reserved parking spot and tax break? I blame all of this on Stan Marsh’s stupid little song.
