Toyota: Extend Hybrid Tax Credit

By Chris Woodyard
USA Today
January 16, 2007

DETROIT — Toyota wants an extension of a federal tax credit that has delivered savings of up to $3,150 to buyers of hybrid cars.

But some of Toyota's (TM) rivals — even those that make hybrids — aren't as enthusiastic.

Toyota, the biggest hybrid maker, is the only automaker so far to have reached the 60,000-hybrid-sales limit set by Congress in the legislation that allowed income tax breaks for buying hybrid cars as a way of encouraging fuel savings and cleaner air. The amount of the credit is based on fuel efficiency.

Even though Toyota reached the limit, buyers of its hybrids still get a credit, but it's far smaller and will disappear entirely later this year. Before hitting the limit, Toyota's Prius received the biggest tax break of $3,150. The tax incentive for buying a Prius or other Toyota hybrid fell by half last October and will be cut in half again on April 1.

"The cap should be raised for us to allow us to expand," Jim Press, president of Toyota Motor North America, said in an interview at the North American International Auto Show here. "Demand for Prius declined when there was a step down in hybrid tax credits. We need to have a certain volume to get the mainstream in for economies of scale."

Press also said support of hybrids should go beyond just the tax credits to include moves such as the purchase of hybrid cars for government fleets.

So far, Toyota appears to be largely alone in seeking reauthorization of the subsidies. The Alliance of Automobile Manufacturers, a Washington-based trade group that includes Toyota as a member, hasn't taken a stand on extending the subsidies yet. "We haven't really talked about it as an industry," says spokesman Charles Territo.

What other automakers say:

•Honda (HMC). "I'm not sure it's a good deal," John Mendel, senior vice president of Honda's U.S. division, said of extending the tax credit, because hybrids "are a bridge technology to something else."

Mendel thinks the tax breaks should go to drivers of zero-pollution hydrogen fuel-cell vehicles. Honda is beginning a program next year to put fuel-cell vehicles in the hands of more consumers. He added that "if your purpose is to push the envelope" in developing clean and fuel-saving technologies, hybrids may not be the best direction anymore. Honda sold about 40,000 hybrid versions of Civic and Accord cars last year and hasn't reached the cap yet.

•Ford Motor (F). A leading Ford environmental executive said she would be willing to go along with another tax-credit round, but she also thinks the government should be looking at other emerging technologies.

"We don't see (tax credits) as something that continues forever," said Nancy Gioia, director of sustainable mobility technology and hybrids. "It should be aimed at key technologies we think are going to be critical."

Ford makes the Escape and Mercury Mariner hybrid SUVs and plans to bring hybrid technology to some sedans, as well.

•General Motors (GM). While GM endorses incentives as a way of encouraging adoption of new technologies, they should be carefully crafted to not single out an element without looking at the issue comprehensively, said Beth Lowery, vice president in charge of environmental matters.

"To pick out one piece doesn't make a lot of sense."

GM offers hybrid versions of the Saturn Vue SUV and Chevy Silverado and GMC Sierra pickups, part of what it says will be up to 12 hybrid models.

The House could act as soon as this week on a fast-track resolution that could serve as a precursor to the kind of legislation that Toyota is seeking.

The resolution, introduced last week, would create a fund for renewable energy and conservation by cutting subsidies for oil production, part of the fast-track measures being pushed through by House Speaker Nancy Pelosi, D-Calif.

The measure represents "a shift in energy policy from the last (session of) Congress," said Kate Johnson, clean energy advocate for the U.S. Public Interest Research Group, which favors tax breaks for environmentally friendly cars available to consumers.

The dodgy numbers behind the latest warming scare.

CLIMATE CHANGE

Stern Review
The dodgy numbers behind the latest warming scare.

BY BJORN LOMBORG
Thursday, November 2, 2006 12:01 a.m. EST

The report on climate change by Nicholas Stern and the U.K. government has sparked publicity and scary headlines around the world. Much attention has been devoted to Mr. Stern's core argument that the price of inaction would be extraordinary and the cost of action modest.

Unfortunately, this claim falls apart when one actually reads the 700-page tome. Despite using many good references, the Stern Review on the Economics of Climate Change is selective and its conclusion flawed. Its fear-mongering arguments have been sensationalized, which is ultimately only likely to make the world worse off.

The review correctly points out that climate change is a real problem, and that it is caused by human greenhouse-gas emissions. Little else is right, however, and the report seems hastily put-together, with many sloppy errors. As an example, the cost of hurricanes in the U.S. is said to be both 0.13% of U.S. GDP and 10 times that figure.
The review is also one-sided, focusing almost exclusively on carbon-emission cuts as the solution to the problem of climate change. Mr. Stern sees increasing hurricane damage in the U.S. as a powerful argument for carbon controls. However, hurricane damage is increasing predominantly because there are more people with more goods to be damaged, settling in ever more risky habitats. Even if global warming does significantly increase the power of hurricanes, it is estimated that 95% to 98% of the increased damage will be due to demographics. The review acknowledges that simple initiatives like bracing and securing roof trusses and walls can cheaply reduce damage by more than 80%; yet its policy recommendations on expensive carbon reductions promise to cut the damages by 1% to 2% at best. That is a bad deal.

Mr. Stern is also selective, often seeming to cherry-pick statistics to fit an argument. This is demonstrated most clearly in the review's examination of the social damage costs of CO2--essentially the environmental cost of emitting each extra ton of CO2. The most well-recognized climate economist in the world is probably Yale University's William Nordhaus, whose "approach is perhaps closest in spirit to ours," according to the Stern review. Mr. Nordhaus finds that the social cost of CO2 is $2.50 per ton. Mr. Stern, however, uses a figure of $85 per ton. Picking a rate even higher than the official U.K. estimates--that have themselves been criticized for being over the top--speaks volumes.

Mr. Stern tells us that the cost of U.K. flooding will quadruple to 0.4% from 0.1% of GDP due to climate change. However, we are not told that these alarming figures only hold true if one assumes that the U.K. will take no additional measures--essentially doing absolutely nothing and allowing itself to get flooded, perhaps time and again. In contrast, the U.K. government's own assumptions take into account a modest increase in flood prevention, finding that the cost will actually decline sharply to 0.04% of U.K. GDP, in spite of climate change. Why does Mr. Stern not share that information?

But nowhere is the imbalance clearer than in Mr. Stern's central argument about the costs and benefits of action on climate change. The review tells us that we should make significant cuts in carbon emissions to stabilize the concentration of atmospheric carbon dioxide at 550 ppm (parts per million). Yet such a stark recommendation is not matched by an explicit explanation of what this would mean in terms of temperature.

The U.N. Climate Panel estimates that stabilizing at 550 ppm would mean an increase in temperature of about 2.3 degrees Celsius in the year 2100. This might be several degrees below what would otherwise happen, but it might also be higher. Mr. Nordhaus estimates that the stabilization policy would reduce the rise in temperature from 2.53 degrees Celsius to just 2.42 degrees Celsius. One can understand the reluctance of the Stern review to advertise such a puny effect.

Most economists were surprised by Mr. Stern's large economic estimates of damage from global warming. Mr. Nordhaus's model, for example, anticipates 3% will be wiped off global GDP if nothing is done over the coming century, taking into account the risk for catastrophes. The Stern review purports to show that the cost is "larger than many earlier studies suggested."

On the face of it, Mr. Stern actually accepts Mr. Nordhaus's figure: Even including risks of catastrophe and non-market costs, he agrees that an increase of four degrees Celsius will cost about 3% of GDP. But he assumes that we will continue to pump out carbon far into the 22nd century--a rather unlikely scenario given the falling cost of alternative fuels, and especially if some of his predictions become clear to us toward the end of this century. Thus he estimates that the higher temperatures of eight degrees Celsius in the 2180s will be very damaging, costing 11% to 14% of GDP.

The Stern review then analyzes what the cost would be if everyone in the present and the future paid equally. Suddenly the cost estimate is not 0% now and 3% in 2100--but 11% of GDP right now and forever. If this seems like a trick, it is certainly underscored by the fact that the Stern review picks an extremely low discount rate, which makes the cost look much more ominous now.

But even 11% is not the last word. Mr. Stern suggests that there is a risk that the cost of global warming will be higher than the top end of the U.N. climate panel's estimates, inventing, in effect, a "worst-case scenario" even worse than any others on the table. Therefore, the estimated damage to GDP jumps to 15% from 11%. Moreover, Mr. Stern admonishes that poor people count for less in the economic calculus, so he then inflates 15% to 20%.

This figure, 20%, was the number that rocketed around the world, although it is simply a much-massaged reworking of the standard 3% GDP cost in 2100--a figure accepted among most economists to be a reasonable estimate.

Likewise, Mr. Stern readjusts the cost of dealing with climate change. The U.N. found that the cost of 550 ppm stabilization would be somewhere around 0.2% to 3.2% of GDP today; he reports that costs could lie between -4% and 15% of GDP. The -4% is based on the suggestion that cutting carbon emissions could make us richer because revenue recycling could address inefficiencies in taxation--but the alleged inefficiencies, if correct, should be addressed no matter what the policies about climate change. The reason Mr. Stern nevertheless finds a very low cost estimate is because he only considers models with so-called Induced Technological Change. These models are known to reduce costs by about two percentage points because carbon cuts lead to an increase in research and development, which again makes further cuts cheaper. Thus Mr. Stern concludes that the costs are on average 1% of GDP, and in the summary actually claims that this is a maximum cost.

The Stern review's cornerstone argument for immediate and strong action now is based on the suggestion that doing nothing about climate change costs 20% of GDP now, and doing something only costs 1%. However, this argument hinges on three very problematic assumptions.
First, it assumes that if we act, we will not still have to pay. But this is not so--Mr. Stern actually tells us that his solution is "already associated with significant risks." Second, it requires the cost of action to be as cheap as he tells us--and on this front his numbers are at best overly optimistic. Third, and most importantly, it requires the cost of doing nothing to be a realistic assumption: But the 20% of GDP figure is inflated by an unrealistically pessimistic vision of the 22nd century, and by an extreme and unrealistically low discount rate. According to the background numbers in Mr. Stern's own report, climate change will cost us 0% now and 3% of GDP in 2100, a much more informative number than the 20% now and forever.

In other words: Given reasonable inputs, most cost-benefit models show that dramatic and early carbon reductions cost more than the good they do. Mr. Stern's attempt to challenge that understanding is based on a chain of unlikely assumptions.

Moreover, there is a fourth major problem in Mr. Stern's argument that has received very little attention. It seems naive to believe that the world's 192 nations can flawlessly implement Mr. Stern's multitrillion-dollar, century-long policy proposal. Will nobody try to avoid its obligations? Why would China and India even participate? And even if China got on board, would it be able to implement the policies? In 2002, China decided to cut sulfur dioxide (SO2) emissions by 10%--they are now 27% higher despite SO2 being nationally a much bigger health and environmental problem than climate change.

Why does all this matter? It matters because, with clever marketing and sensationalist headlines, the Stern review is about to edge its way into our collective consciousness. The suggestion that flooding will overwhelm us has already been picked up by commentators, yet going back to the background reports properly shows declining costs from flooding and fewer people at risk. The media is now quoting Mr. Stern's suggestion that climate change will wreak financial devastation that will wipe 20% off GDP, explicitly evoking memories of past financial catastrophes such as the Great Depression or World War II; yet the review clearly tells us that costs will be 0% now and just 3% in 2100.
It matters because Gordon Brown, Tony Blair and Nicholas Stern all profess that one of the major reasons that they want to do something about climate change is because it will hit the world's poor the hardest. Using a worse-than-worst-case scenario, Mr. Stern warns that the wealth of South Asia and Sub-Saharan Africa will be reduced by 10% to 13% in 2100 and suggests that effect would lead to 145 million more poor people.

Faced with such alarmist suggestions, spending just 1% of GDP or $450 billion each year to cut carbon emissions seems on the surface like a sound investment. In fact, it is one of the least attractive options. Spending just a fraction of this figure--$75 billion--the U.N. estimates that we could solve all the world's major basic problems. We could give everyone clean drinking water, sanitation, basic health care and education right now. Is that not better?

We know from economic models that dealing just with malaria could provide economic boosts to the order of 1% extra GDP growth per capita per year. Even making a very conservative estimate that solving all the major basic issues would induce just 2% extra growth, 100 years from now each individual in the developing world would be more than 700% richer. That truly trivializes Mr. Stern's 10% to 13% estimates for South Asia and Sub-Saharan Africa.

Last weekend in New York, I asked 24 U.N. ambassadors--from nations including China, India and the U.S.--to prioritize the best solutions for the world's greatest challenges, in a project known as Copenhagen Consensus. They looked at what spending money to combat climate change and other major problems could achieve. They found that the world should prioritize the need for better health, nutrition, water, sanitation and education, long before we turn our attention to the costly mitigation of global warning.

We all want a better world. But we must not let ourselves be swept up in making a bad investment, simply because we have been scared by sensationalist headlines.

Mr. Lomborg, author of "The Skeptical Environmentalist" (Cambridge, 2001), teaches at the Copenhagen Business School and is director of the Copenhagen Consensus Center.

Please comment on these articles: we accept views contrary to our position!

LEDs Mean The Light Bulb Will Soon Be A Museum Piece

LEDs mean the light bulb will soon be a museum piece

Cyberspeak- USA Today
Andrew Kantor

There's an old puzzle that goes like this: You're standing outside of a room with a tightly closed door. There are three light switches in front of you and three lamps in the room. You want to know which switch turns on which light in the room, but you're only allowed to open the door once. How do you do it?
The puzzle is solvable because today's light bulb technology is old and wasteful. Your typical incandescent bulb uses a ton of energy making heat instead of light, something you've probably demonstrated countless times by attempting to unscrew a bulb that's just been turned off. Ouch.

The incandescent bulb was invented by Heinrich Goebel in 1854. (Thomas Edison's didn't come around until 1879 and was based on a patent he bought from two other guys, for those of you who keep track of these things.) It works by heating a filament, usually made of tungsten, to around 4,000 degrees Fahrenheit—hot enough to glow. Those of you with electric stoves are familiar with the concept; the coils of the stove glow red hot. The filament in a light bulb glows white hot, but the argon gas in the bulb keeps it from burning up. The result is a cheap way to make light. Unfortunately it's a wasteful way, with all that energy going into making heat instead of light. Nor is it a terribly long-lasting way, and those tungsten filaments, which may be only .01-inch thick, have a tendency to break; how else would we have so many light-bulb jokes?

Halogen bulbs are a bit better. They embed a special filament inside a quartz "envelope" to get a strong, more efficient, longer-lasting light — like, for example, your car's headlights which probably don't need to be changed all that often. (They also get a lot hotter than standard bulbs.)

Fluorescent lights are more efficient than standard or halogen bulbs — you might have noticed they don't get terribly hot — but they also take a while to get up to full brightness, they get dim over time, and they aren't particularly sturdy.

THE COLOR OF LIGHT

When we say light is white, we mean that it closely matches the light from the sun. Using a concept called black body radiation, which I will not go into here, you can rate the color of light in terms of temperature. Sunlight's color is about 5400 degrees Kelvin.
The white light in our homes and offices isn't really white. Incandescent bulbs radiate around 2600 to 3000 degrees K. They're on the orange side, which you can easily demonstrate by taking a photo indoors that's lit only by some incandescent bulbs. It'll be very orange (unless you're using a digital camera that corrects the "white balance").

Typical office fluorescent lights are in the 3000-3500 degree range. They're greenish; try taking a photo under one to see. Many hardware and photography stores sell "daylight" fluorescent bulbs that are rated 5500 or 6000 degrees, and closely match the sun for whiteness.

But a new kind of lighting has been making its way into the world. You've probably already noticed it: LEDs, or light-emitting diodes, taking the place of light bulbs.

Unlike incandescent bulbs, which generate light essentially by heating a filament till it glows, LEDs are electronic components based on semiconductors, which have some interesting properties that happen to generate light when a current is passed through them. They've got no filament to burn out, and the electronics are encased in a tough plastic bulb. Today's LEDs last a long time. (If you want the full details on how LEDs generate light, check out How Stuff Works.)

Usable LEDs have been around since the 1960s. The early ones were weak and useful only as indicator lights (the way many still are). Reasonably bright red LEDs were developed in the 1970s; you probably remember the first digital watches came out around then using red LEDs to show the time.

LEDs are often used in traffic lights. Look for the dots.

New semiconductor materials were developed in the '80s and LEDs got cheaper and much, much brighter. They were made in red, yellow, and green. In the early 1990s blue LEDs were finally developed, and a few years later bright blue ones came out. Then, by adding some chemicals to a blue LED chip, engineers were able to create white LEDs. (In fact, they've been able to create LEDs of just about any color.)

I said earlier that you've probably noticed LED lamps. You just may not have realized it. Many traffic lights have been converted to LED lamps, and so have a lot of car and truck taillights. You can often spot them because LED-based lights typically are made up of a number of smaller lamps clumped together (see the photo). Next time you're behind a semi, look at the taillights. There's a good chance they're LEDs.

White LEDs are available in consumer products. Flashlights are one popular use because LEDs are tougher, longer lasting, and less power hungry than a typical bulb.

When my 17-month-old son discovered flashlights, I gave him a cheap one I got at a trade show. It was clearly the Coolest Thing Ever. As most parents know, once your offspring hit about eight months old it's time to buy stock in Duracell; they sell those 24-packs for a reason. So it was with Sam, as he has yet to discover the Off switch. So I swapped lights with him, and gave him an LED-based flashlight instead. It's water- and drool-proof, just about unbreakable, lasts a heck of a lot longer, and the bulb won't burn out for a long time.

Mine (rather, Sam's) is Princeton Tec's "Attitude" and goes for about $22, but you can find lots of others in sporting goods stores and places like The LED Light.com. Mini Maglite users can buy a converter kit to upgrade their flashlight to LEDs, and those of you with a lot of disposable income can even buy LED replacements for regular light bulbs. At 89 bucks for the equivalent of a 15-watt bulb, it's only for those really hard to reach places.

LIGHTER WALLETS

Americans take their lighting seriously, as anyone who's ever tried to use a telescope near a city knows. We spend about $50 billion a year just on the electricity for our lights. To put that in perspective, $50 billion would buy more than 1.6 billion elementary school textbooks. Think about that next time you leave your porch light on.


Of course, white LEDs are still relatively new and prices will drop tremendously in the coming years. It won't be long before light-bulb jokes are a thing of the past, and we're spending a lot less money to illuminate our homes and businesses. LEDs can put out a more natural glow than either incandescent or fluorescent bulbs, so we're also getting a better light.

Not too far down the pike are a cousin of today's LED: organic light-emitting diodes, or OLEDs. You're going to be hearing a lot about those soon. But not today.

(By the way, the solution to the puzzle: Turn on the first switch for a few minutes. Turn it off. Turn on the second light. Open the door and go into the room. The first switch controls the bulb that's warm, the second switch controls the bulb that's lit, and the third switch controls the bulb that's off.)

Andrew Kantor is a technology writer, pundit, and know-it-all living in Columbus, Ohio; he's also a former editor for PC Magazine and Internet World. Read more of his work at kantor.com. His column appears Fridays at USATODAY.com.

Click Here For Conservastore's LEDs