Climate Compass Blog
The state of New York has passed a budget that includes a new EV purchase incentive that will provide up to $2,000 for eligible buyers of an all-electric vehicle, a plug-in hybrid EV, or a hydrogen fuel cell vehicle. Meanwhile in Minnesota, legislators have been considering an EV purchase incentive.
The CEO of the Freedom Foundation of Minnesota criticized EV purchase incentives as “a reverse Robin Hood scheme,” without the green tights, that takes money from the many (taxpayers) and subsidizes the purchases of the few (elites who buy EVs). How accurate is the assertion that the wealthy benefit the most from purchase incentives?
A free EV data tool from the New York State Energy Research and Development Authority can provide some insight. Developed with support from C2ES, EValuateNY gives users access to wide-ranging data sources from New York State’s EV market and allows easy comparisons of the factors that affect EV sales. You can find more about the tool in a previous blog post.
Our initial assessment, examining the period before the purchase incentive program has been implemented, shows that the EV market extends well beyond New York’s wealthiest counties.
Using the U.S. Census Bureau’s data on median household income by county, we established three income brackets to compare wealth between counties. Next, we broke down EV registrations by county and income bracket from the beginning of the EV market (2010) to the most recent data in EValuateNY (2014). The results show that counties with high median incomes account for slightly less than half the state’s total EV registrations.
Figure 1: Distribution of EVs by Income Bracket and County (2010-2014)
Therefore, EVs are not solely purchased in high-income counties, though households with high incomes are found in each county. However, EV registrations in three high-income counties (Suffolk, Nassau, and Westchester) account for more than 43 percent of the state’s total registrations, but only about 22 percent of the population. Clearly, these high-income counties have a higher rate of EV registrations. To dive deeper, we used EValuateNY to plot the rate of EV purchases per 1,000 vehicle registrations by county and income level, shown in Figure 2. Using a rate of EV purchases helps eliminate other factors that may affect the data, such as population or the rate of vehicle ownership. We also added the total number of EV registrations as the size of the bubble representing each county.
Figure 2: Household Income with Rate of EV Purchases and EV Registrations by Income Bracket and County (2010-2014)
This chart indicates that income may have a positive effect on the rate of EV registrations. High-income counties’ rate of EV purchases per 1,000 vehicles is higher than the range of low-income counties. With some notable exceptions, it’s also higher than the range of medium-income counties.
EValuateNY helped establish two findings[i] about the effect of income in New York State’s EV market:
1. Counties with low and medium median incomes make up more than half of the market; and
2. Residents of high-income counties may be more likely to purchase an EV than residents of low- and medium-income counties.
So, would New York’s forthcoming purchase incentive rob from the poor and give to the rich? This could not be entirely true, since more than half of all registered EVs are in low- and middle-income counties, and residents in these counties would arguably benefit more from $2,000 than residents from high-income communities. However, there may be some validity to the argument that on an individual basis, residents of high-income counties would benefit more from the purchase incentive because they may be more likely to buy an EV.
From a policy perspective, the purchase incentive is designed to promote EV deployment, reduce greenhouse gas emissions, and invest in the state’s economy. The program is not designed with any specific social equity goals, but New York legislators could address any potential wealth disparity by instituting an income cap, as California recently did.
The value of purchase incentives in spurring the EV market should not be lost in the discussion of income, though. A recent report by the Stockholm Environment Institute highlights the need to reduce EV price premiums as a means of encouraging consumer adoption. The effect of purchase incentives on state EV markets has been demonstrated over the past year after Georgia eliminated its $5,000 all-electric vehicle tax credit, and EV sales fell sharply.
New York State’s purchase incentive is a helpful tool for putting more electric vehicles on the roads. All New Yorkers, not only the wealthy, benefit from the reduced greenhouse gas emissions from having EVs using some of the least carbon-intensive electricity in the nation.
[i] The strength of any correlation is difficult to establish, as EValuateNY’s user interfaces are designed to provide high-level insights. A regression analysis that provides confidence intervals may be required to better understand the significance of income on counties’ rate of EV uptake. Users may conduct advanced analyses by directly accessing EValuateNY’s databases.
It’s strawberry season!
The first fruits of our family’s membership in a community-supported agriculture (CSA) program are starting to come in. This weekend, our kids will get back to the Earth (and get some of it on them) by picking a quart of berries at a farm just up the road from our house. And that will be just the start of a weekly harvest of fresh produce that’s locally and organically grown.
CSA is one model for locally-based agriculture and food distribution. It’s essentially a cooperative arrangement between a farmer and the local community. Members of a CSA program buy shares of the eventual harvest from the farmer at the beginning of the growing season and receive a portion of what the farmer produces in return.
The farmer gets help with the upfront costs of running a business that has a lot of uncertainty, like the weather, insects, or blight. The consumer gets a regular supply of produce fresh from the farm, sometimes at a discount over what they might pay at the grocery store.
Of course, with the shared benefits comes shared risk. If the growing season is bad for a certain crop, or an unexpected storm hits, that will affect the harvest. It can be disappointing. But the fact that the community is helping the farmer with costs could mean that the farmer can stay in business despite a bad harvest or devastating storm.
It made sense for my family, which includes two vegan teenagers, to give it a try this year. Each week, we’ll get up to eight items from the farm, such as a head of lettuce, a bag of spinach, a bundle of carrots, or a pound of green beans. We hope the experience will diversify the whole family’s food choices.
Being a CSA shareholder feels good because not only are we supporting our own community, but we are teaching our children where their food comes from and the work it takes to produce it.
You can find a CSA farm or other sources of locally grown food here.
CSA could be right for you if:
- Eating locally grown food is important to you.
- You cook the majority of your own meals.
- You like a variety of different and fresh vegetables.
- You can commit to picking up your produce share on the same day and at the same location each week. (Although some CSAs now offer door-to-door delivery).
- You can tolerate some risk of not getting crops or crops not coming in as planned.
- You want to support the local economy and small farm/agriculture industry.
Not all CSA farms are certified organic, although many do have a USDA certified organic seal. If this is a priority for you, ask about the farm’s growing practices before committing. Another important consideration is to find out what a CSA will provide. Some grow fruit, and others even include meat, eggs and honey.
If you want to eat fresh from the farm but can’t commit to CSA, you have other easy options:
- Farmers’ markets: Many communities set aside places for farmers to sell their produce directly to the public.
- Recovered food: Businesses like Hungry Harvest in the Washington, D.C., area take food that is perfectly edible but might be discarded by a restaurant or a grocery store because of a cosmetic imperfection. Some is sold to customers and some is donated to food banks or farmer’s markets.
- Grow your own: It doesn’t take much space in your backyard or balcony to plant a few tomatoes, bell peppers or squashes—especially if you grow them vertically. If you pull the weeds and water the plants, you’ll have tasty produce you can call your own.
|Our "Beyond Paris" panelists (l to r): C2ES President Bob Perciasepe, Tamara "TJ" DiCaprio of Microsoft, Steve Harper of Intel, Alex Liftman of Bank of America, and Cathy Woollums of Berkshire Hathaway Energy.|
The Paris Agreement is a roadmap for action on climate change, but how exactly will we get to the destination: a low-carbon economy?
Participants at a recent event (see video) co-hosted by C2ES and Microsoft, the newest member of our Business Environmental Leadership Council, at Microsoft’s Innovation and Policy Center in Washington, D.C., agree that business leadership will play a key role.
At the event, White House Director of Private Sector Engagement Rob Diamond praised companies for sending a strong signal of support for climate action in the run-up to Paris. More than 150 companies, including those on our panel – Bank of America, Berkshire Hathaway Energy, Intel, and Microsoft – have joined the American Business Act on Climate Pledge.
Diamond said he hopes more will follow their lead in pledging to reduce greenhouse gas emissions, expand clean power, improve energy efficiency, and finance climate action. “The amount of effort the private sector has taken is fantastic,” Diamond said. “Keep it up.”
Business leadership has moved far beyond saving energy in a company’s own facilities. It now means investing in clean energy projects, reducing emissions throughout the supply chain, helping customers reduce their carbon footprint, and making an economic case for policies that address climate change.
As Steve Harper, Intel’s global director of environment and energy policy, put it: “The price of leadership has gone up. You need to do more, and you need to say more, and you need to advocate for more in order to continue to be seen as a leader in the corporate world on the climate issue, which we agree is society’s biggest challenge.”
Here’s what some leading companies are doing to step up to that challenge:
Bank of America: Alex Liftman, global environmental executive at Bank of America, said the Paris Agreement signals markets about the direction to go and provides a global roadmap for how countries plan to invest. Bank of America has increased its investment in low-carbon activities from $50 billion to $125 billion by 2025. The bank is also partnering with other financial institutions on an $8 billion Catalytic Finance Initiative to advance innovative financing structures for investments in clean energy and sustainability. Liftman said, “We’re trying to bring financial scale to the equation.”
Berkshire Hathaway Energy: Berkshire Hathaway Energy is the largest regulated owner of renewable energy generation in the U.S. It has invested more than $15 billion in renewable energy projects, and has pledged to invest up to $15 billion more going forward. Cathy Woollums, senior vice president for environmental services and chief environmental counsel, said the Environmental Protection Agency’s Clean Power Plan created a roadmap forward, and the Supreme Court’s stay creates uncertainty. “We wish that hadn’t happened,” she said, but there are still opportunities to move forward in the interim. “Rather than litigating, we are leading.”
Intel Corporation: Intel is one of the largest purchasers of renewable energy in the U.S. Since 2005, Intel has also cut in half its use of fluorinated gases, which contribute to global warming. As a technology company, Intel uses energy to make products, but Harper noted those products can also help others reduce their energy usage. Intel is engaging with states to incorporate intelligent efficiency into plans to implement the Clean Power Plan, and is working with countries such as China to push the development of markets for renewable energy.
Microsoft: Microsoft has been carbon neutral since 2012. Tamara “TJ” DiCaprio, senior director of environmental sustainability, said the company set an internal price on carbon that has helped it increase operational efficiency and invest in clean energy. Microsoft has purchased more than 10 billion kilowatt hours of green power, and reached more than 6 million people through the purchase of carbon offsets from community projects. The company is also engaging with customers to reduce their energy and resource use.
Existing and expected policies can get the United States close to its Paris Agreement goal of reducing net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. But to get the rest of the way will take more – including business action. Through platforms such as the Business Environmental Leadership Council, C2ES will continue to work with leading businesses to support strong climate policies and show climate leadership.
After witnessing the historic signing of the Paris Agreement by 175 nations, we now need to turn our attention to fulfilling its promise.
As its nationally determined contribution to the agreement, the United States set a goal of reducing net greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025. In a new paper, C2ES outlines how expected and in-place policies could get us close to the goal line -- reducing emissions by as much as 22 percent. Getting the rest of the way can likely be achieved through a mix of additional policies, city and business action, and technological innovation.
First, let’s look at how we can get to a 22 percent reduction.
U.S. net emissions are already down more than 9 percent from 2005 levels due to market- and policy-related factors, including a shift in electricity generation from coal to natural gas, growth in renewable energy, level electricity demand, and improved vehicle efficiency.
The C2ES business-as-usual forecast, drawn from a number of analyses, projects an additional 5.6 percent reduction in net emissions through such policies as greenhouse gas standards for vehicles and the Clean Power Plan.
The rest of the anticipated emissions reductions is expected to come from new, higher estimates of future carbon sequestration and additional measures under development, including steps to strengthen fuel economy standards for medium- and heavy-duty trucks, reduce methane emissions in the oil and gas sector, and reduce hydrofluorocarbons (HFCs).
Now, how will we address the remaining gap of at least 270 million metric tons carbon dioxide equivalent?
Additional federal policies would help. For example, greenhouse gas standards could be set for major industrial sectors under section 111(d) of the Clean Air Act, the same section that underlies the Clean Power Plan.
Technological advances that lower the cost of emissions reduction will also undoubtedly play an important role. Over the next five to 10 years, battery storage technologies are expected to improve by a factor of 10, which would support the integration of more renewable generation. A promising design for a natural gas power plant with nearly 100 percent carbon capture will enter the demonstration phase next year and could be commercialized soon after. And agricultural advances are leading to more sustainable crops able to sequester more carbon dioxide in their root systems.
Stronger efforts by cities will also be critical to filling the gap. A growing number of cities are working to improve the energy efficiency of residential and commercial buildings, which account for for 41 percent of total U.S. energy consumption. Greater adoption of Property Assessed Clean Energy (PACE) programs, which help finance energy efficiency and renewable energy projects, could significantly reduce city energy demand. Similarly, city programs to build out infrastructure to increase the adoption rate of electric vehicles will, in-time, appreciably lower transportation-related emissions.
Companies, too, will play a key role. Twelve leading companies signed the C2ES statement calling on governments to quickly join the Paris climate pact and pledging to work with countries toward the domestic measures needed to achieve their national emissions-cutting contributions. More than 150 U.S. companies with a combined market capitalization in excess of $7 trillion joined the American Business Act on Climate Pledge – committing to reduce emissions, increase renewable power, or finance climate efforts. And the White House is calling on more companies to join the initiative.
The United States has significantly reduced its greenhouse gas emissions over the past decade. Cutting emissions 26 to 28 percent below 2005 levels by 2025 is a challenging goal. But many options remain untapped, and concerted efforts across multiple fronts can get us across the goal line.
C2ES recently headed to Anchorage, Alaska, for a two-day Solutions Forum workshop to help Mayor Ethan Berkowitz launch an effort to make the city more climate resilient.
While many cities have undertaken resilience efforts, Anchorage is integrating the corporate community into its efforts as few others have done. About 50 business leaders, city, state, federal and tribal officials, nonprofit organizations, and other experts shared their experiences addressing climate change impacts and enhancing resilience.
Alaska is on the front lines of climate change. Businesses, cities, and Alaska Native communities are all experiencing the impacts. Alaska has warmed at more than twice the rate of the rest of the United States, and Anchorage experienced its two warmest years on record in 2014 and 2015. The region has also seen less snow than normal, with 2015 snowfall totaling about half the average.
These changes have already affected winter recreation activities, important to the economy and also the spirit of a city that prides itself of having fun in the cold. This year, a trainload of snow had to be dumped on Anchorage’s streets for the ceremonial start of the iconic Iditarod sled dog race.
More frequent icing conditions and low visibility caused by warming are affecting aviation—an important mode of transportation in a state where more than 80 percent of the communities are not served by roads. Warming temperatures have also contributed to earlier snowmelt, which can lead to a month-longer fire season.
Anchorage is no stranger to preparing for extreme events. Because of Anchorage’s experience with disasters, from earthquakes to wind storms, many aspects of the city are well prepared with existing planning structures, coordination efforts, and ongoing tracking in place.
The private sector also is keenly aware of how external events can affect their employees, customers, and community. Companies’ experience with risk management and emergency management plans and drills can be coordinated with city and state agencies to build and maintain local resilience.
Workshop participants worked through the Disaster Resilience Scorecard, a tool developed by IBM and AECOM and used around the world. The scorecard helps cities establish a baseline of their current level of disaster resilience, identify priorities for investment and action, and track their progress in improving their disaster resilience over time.
Now that Anchorage has developed this baseline, C2ES will continue to work with stakeholders to explore these insights and questions that follow to helping businesses, states, and cities in Anchorage and beyond collaborate on climate resilience.