Electric Vehicle Subsidies Hurt the Poor and Help the Rich

Electric Vehicle Subsidies Hurt the Poor and Help the Rich
Stephanie Zollshan/The Berkshire Eagle via AP

I support government policies to reduce the production of greenhouse gasses, because the worst aspects of climate change more harshly impact the poor. After all, the wealthy can more easily adapt to adverse climate events likes wildfires, droughts and hurricanes.

However, the government also has a responsibility to ensure that environmental policies protect low income Americans — a large percentage of our population. In fact, the U.S. Census Bureau says that 12.7 percent of our nation lives in poverty. According to a report by the Brookings Institution on the lower middle class, more than half of American families live on under $60,000 per year, and nearly one-third of those families rely on government support.

Clearly, much of this country is struggling to make ends meet. Yet our environmental policies sometimes fail those Americans with fewer financial resources. 

Large federal and state government subsidies have been a boon for green energy, especially the rooftop solar business. But I have expressed concerns about bad actors in that industry that may target lower-income customers. Shady salespeople sometimes urge customers to make financial decisions against their own best interest. Purchasing solar panels can cost $20,000 or more, reduce the value of the home and make the house harder to sell.

Now, I also have concerns about the state of California pushing most drivers in the state to purchase electric vehicles. To be clear, I am supportive of electric vehicles, and believe like many others that they may be the future of automotive transportation. But I say the “may” be the future, and not “will” be the future, because I don’t have a crystal ball. Trying to predict developments in transportation technology more than a decade away is difficult, if not impossible.

Today, 45 states and the District of Colombia provide incentives to purchase electric or hybrid vehicles. But I am concerned that massive government expenditures in California — and across the country — to ensure that we all own electric vehicles is a mistake. This initiative will drive ever dwindling government resources away from programs to help the less fortunate, and steer government dollars to the wealthy.

The average Tesla driver makes $320,000 dollars a year, according to a report cited by the Los Angeles Times in an 2015 article. The Times detailed how Tesla has secured nearly $3 billion dollars in government subsidies. In California, where consumers get a rebate for purchasing an electric vehicle, 83 percent of the rebate recipients had incomes over $100,000. Americans in the top 20 percent of income earners received about 90 percent of the federal tax credits for electric vehicles. 

It should also be noted that while California is currently in good shape from a budget standpoint, the man who put them in that position, Governor Jerry Brown, has insisted that the state could soon face tough times. “Make no doubt about it,” warned Brown, “cuts are coming in the next few years, and they’ll be big.” I believe states, must prioritize shoring up social welfare programs now while the economy is strong. They must act before the new federal tax cuts add trillions to our national debt and erode Washington’s ability to help state’s meet their financial obligations to the poor. 

Currently, California has a waiver from the Environmental Protection Agency (EPA) on the Clean Air Act. It will allow California to dedicate more resources to mandate electric car use across the Golden State. While California means well, the EPA should revoke the waiver if the state insists on using it to direct billions of dollars to promote electric vehicles rather than social programs to protect the most vulnerable members of our society. 

Lastly, if we wanted to invest in clean technology that also helps the less fortunate, we should invest in public transportation. Subway and bus systems across the nation are suffering from lack of funding and disrepair. A recent report by the American Society of Civil Engineers gave the nation’s public transportation system a D minus. It only stands to reason that if we want to help the poor and reduce production of greenhouse gasses, the government should focus on improving public transportation — not ensuring wealthy Tesla drivers have enough charging stations. 

Silvestre Reyes represented Texas’ 16th Congressional District from 1997–2013.

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