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Our Post-Carbon Future Depends on Electric Vehicles—Our Congress Controls Their Economic Lifeline

The fossil fuel industry is working hard to eliminate a tax credit that reduces emissions and creates jobs

How quickly that cleaner future becomes the present in the United States depends at least in part on defeating the oil and gas industry’s self-serving campaign to eliminate the EV tax credit.

How quickly that cleaner future becomes the present in the United States depends at least in part on defeating the oil and gas industry’s self-serving campaign to eliminate the EV tax credit.

There are a few competing electric vehicle-related bills kicking around Capitol Hill right now. One, a bipartisan bill aptly titled the Driving America Forward Act, would keep the country moving in the right direction to address the worldwide climate crisis. Another, dubbed the Fairness for Every Driver Act, would slam us into reverse.

The forward-looking bill proposes to extend a tax credit—currently pegged at $7,500—for electric vehicles (EVs) that currently phases out once an automaker has sold 200,000 of them. Tesla and General Motors have already exceeded the cap. Introduced in April, the legislation would raise the cap to 600,000 vehicles per manufacturer, providing a $7,000 tax credit to purchasers after the original 200,000-unit threshold is met. It is sponsored by two Democrats from Michigan, Debbie Stabenow and Gary Peters, along with Republicans Lamar Alexander of Tennessee and Susan Collins of Maine.

Stabenow says the legislation—which has the support of 60 organizations and companies, including all of the automakers—will reduce toxic emissions, combat carbon pollution and help create American jobs. She’s right on all counts.

The backward-looking bill, introduced last fall and again in February by Wyoming Republican Sen. John Barrasso, would eliminate the EV tax credit altogether. Barrasso argues that the tax credit is costing Americans billions of dollars by shortchanging the government of tax revenue and that the EV market is “well established,” so it no longer needs federal help.

Barrasso’s efforts are backed by a coalition of some three dozen faux free-market groups organized by the American Energy Alliance, the advocacy arm of the Institute for Energy Research. The groups sent a letter to Congress calling on lawmakers to oppose raising the tax credit cap. “Electric vehicles, like all other products in the marketplace,” they wrote, “should succeed or fail on their own merits” without government assistance. The letter also cites a discredited 2018 Manhattan Institute study that inaccurately asserts that gasoline-powered vehicles are cleaner than EVs.

Given that the transportation sector has surpassed the energy sector as the leading source of U.S. carbon emissions—and that transportation sector emissions rose last year after three years of decline—the stakes over the EV tax credit’s future are high.

EVs Are Technologically Superior—and a Lot Cleaner

The rationale behind the EV tax credit, which Congress passed in 2009, is to create a stable market much in the same way government policies helped the gasoline-hybrid market grow. There are now more than 40 EV models on the market in the United States, and last year sales crossed the 1 million mark, thanks to an 81 percent jump in 2018. Even so, the number of EVs is minuscule as a percentage of total vehicles on U.S. roads. Because the current climate crisis requires us to transition from the internal combustion engine as rapidly as possible, the EV tax credit provides a necessary and effective incentive.

The good news is EVs are cheaper to run and maintain than comparable gasoline-powered vehicles and are significantly quieter. More important, they emit no toxic tailpipe pollution, while gasoline and diesel exhaust increase the risk of cancer as well as cardiovascular, respiratory and neurological diseases, and disproportionately harm low-income communities near industrial facilities and highways. As one of only three medical doctors in the Senate, Barrasso should appreciate EV public health benefits.

Likewise, EVs are responsible for considerably lower life-cycle carbon emissions than vehicles powered by internal combustion engines. The Union of Concerned Scientists’ most recent analysis, based on 2016 U.S. electricity generation data, found that the average EV produces carbon emissions equivalent to that of a gasoline-powered car that gets 80 miles per gallon (mpg). In parts of the country that rely less on coal-fired power plants, notably California and the Northeast, EVs are even cleaner, and EV-related carbon emissions will continue to drop nationwide as electric utilities retire their antiquated coal plants and add more renewable energy to their portfolios.

Phony Free-Marketeers

What about Barrasso’s contention that the “pricey” EV tax credit is ripping off taxpayers and doesn’t deserve federal support?

Let’s look at the facts.

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According to U.S. government estimates, the cost of subsidies for “clean-fuel burning vehicles and refueling property,” which includes EVs and vehicles that run at least partly on biodiesel, compressed natural gas, ethanol, hydrogen or kerosene, averaged $545 million in 2015 and 2016. By comparison, U.S. oil and gas subsidies in 2015 and 2016 averaged an eye-popping $15 billion, according to a Natural Resources Defense Council study. And while the EV tax credit has been in existence for only a decade, taxpayers have been subsidizing the oil and gas industry for 100 years. From 1918 through 2010, federal oil and gas subsidies averaged $4.86 billion per year in 2010 dollars, according to a 2011 study by investment firm DBL Partners.

The oil and gas industry’s anti-EV tax credit campaign is a prime example of how fossil fuel interests construct a disinformation echo chamber to drown out government efforts to address the climate crisis.

Why would Barrasso and the American Energy Alliance coalition, which is ostensibly against federal intervention in the marketplace, denounce the EV tax credit but say nothing about a century of massive fossil fuel subsidies?

Because they represent the interests of the oil and gas industry.

Since 2013, the industry has given $1.36 million in campaign contributions to Barrasso and his bill’s cosponsors, Republican Sens. Mike Enzi of Wyoming and Pat Roberts of Kansas, according to the Center for Responsive Politics database. The two top oil and gas industry campaign contributors in 2018, oil refiners Marathon Petroleum and Charles Koch’s Koch Industries, funded all three of them.

What’s more, between 2012 and 2017, Koch-related funds donated more than $32 million to 16 of the 34 signatories on the American Energy Alliance letter, including American Commitment, ALEC (American Legislative Exchange Council) Action, Club for Growth and Heritage Action for America. More than a quarter of that funding—$9.07 million—went to American Energy Alliance and the Institute for Energy Research, whose president, Tom Pyle, is a former lobbyist for Koch Industries and the National Petrochemical and Refiners Association.

The Lynde and Harry Bradley Foundation—a $900-million charity that promotes fossil fuel development and climate science denial—gave more than $10 million to 11 of the groups, including the Competitive Enterprise Institute, Independence Institute, Mackinac Center for Public Policy and the Texas Public Policy Foundation. And the Mercer Family Foundation—run by billionaire Robert Mercer, whose hedge fund has millions of dollars in oil and gas investments—donated $8.9 million to four of the letter’s signatories: the CO2 Coalition, E&E Legal, Heartland Institute and Heritage Action.

The think tanks that produced fraudulent studies cited by Barrasso and the American Energy Alliance coalition to make their case also are generously supported by the same funders. The Manhattan Institute, for instance, received $3.14 million from the Bradley Foundation, $1.24 million from Koch foundations, and $2.03 million from the Mercer Family Foundation between 2012 and 2017. ExxonMobil, which has been funding the Manhattan Institute for two decades, kicked in another $650,000.

The oil and gas industry’s anti-EV tax credit campaign is a prime example of how fossil fuel interests construct a disinformation echo chamber to drown out government efforts to address the climate crisis. This is basically how it works: The industry underwrites a network of faux free-market groups to surreptitiously advocate on its behalf; it pays seemingly independent think tanks to publish deceptive studies; and it bankrolls the campaigns of federal legislators, who then cite industry-funded studies and invite industry-funded spokespeople to testify before Congress.

It would take some doing to calculate just how many millions the industry and its supporters have spent on think tanks and advocacy groups to parrot its line. The $57.3 million that the Bradley Foundation, Mercer Family Foundation and Koch-controlled foundations gave to the Manhattan Institute and the American Energy Alliance coalition groups between 2012 and 2017 is but a drop in the barrel. Thanks to federal disclosure laws, however, we do know how much the oil and gas industry spends to influence Washington. In 2018, alone, it spent $84.4 million on federal candidates, parties and outside groups, and another $125 million on lobbying.

Exposing these connections is the first step to foiling them. As my colleague David Reichmuth, an auto engineer, likes to say, the future of transportation is electric. How quickly that cleaner future becomes the present in the United States depends at least in part on defeating the oil and gas industry’s self-serving campaign to eliminate the EV tax credit.

This article was produced by Earth | Food | Life, a project of the Independent Media Institute.

Elliott Negin

Elliott Negin

Elliott Negin, a senior writer at the Union of Concerned Scientists, was a foreign news editor at National Public Radio, the managing editor of American Journalism Review, and the editor of Nuclear Times and Public Citizen magazines. His articles have appeared in the Atlantic Monthly, Columbia Journalism Review, the Hill, Mother Earth News, the Nation, the Progressive, Roll Call, Washington City Paper, the Washington Post and other publications.

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