Commentary: Successful Energy Transitions are Facilitated, Not Forced

Governor Gavin Newsom recently ordered the California Air Resources Board (CARB) to ban the sale of gasoline-powered vehicles by 2035. Since the 1990s, sixteen states including Vermont have adopted CARB's more stringent emission standards in place of regulations enacted by the Environmental Protection Agency. Newsom's mandatory transition to zero emission vehicles will therefore have a domino effect in the CARB states, which will be legally bound to outlaw the sale of internal combustion engine (ICE) vehicles. 


Who benefits from ICE bans and electric vehicle (EV) mandates and who gets hurt? Can the government force society to give up superior forms of energy and technology? Are EVs in fact eco-friendly? In the following conversation, edited from my appearance on the Common Sense Radio show, I discuss these questions and more with host Bill Sayre.


Listen to the interview –


Bill Sayre: Let's go now to Meg Hansen. She has a particular issue that she would like to bring to our attention. And as we listen to her, let's think about what questions we might want to ask and how we can learn from her to prepare for the future. Meg Hansen, do we have you on the line?


Meg Hansen: Hi Bill, it's great to be here with you.


Bill: Well, mighty good to hear your voice. You've done several opinion pieces, and now you're working on podcasts and many other ways of getting the ‘free society’ approach into the public forum. We're kind of using the old fashioned way of the radio. But, Meg, some of us love that the best.


Tell us about this issue where we're working together with Massachusetts and other states to address energy in a way that makes sense, and how some of the ideas that seem good on paper – and you're going to tell us about a prominent one –  have unintended consequences that will unintentionally hurt many of our listeners. Get us started.


Meg: Thank you, Bill. I have to say, though, that the radio is really, really important. In the ‘80s, AM radio was the avenue through which different points of view were introduced to the average American. All forms of communication, I would say, are equally important and complement each other. So thank you for doing this show.


I’ll begin with providing some context. When it comes to fuel emission standards, states have a choice – we can either follow the federal EPA standards or we can follow California's standards. Sixteen states, including Vermont, chose to adopt California's emission standards, which are more stringent than the federal ones. In the year 2000, Vermont tied itself to California’s regulations about tailpipe emissions, but also to something known as zero emission vehicles or ZEV.


In 2020, California Governor Gavin Newsom issued an executive order requiring the Californian version of the EPA, known as the California Air Resources Board (CARB), to ban internal combustion engines or gasoline powered vehicles by the year 2035. Because the sixteen CARB states are tied to California, it has triggered a domino effect whereby this law will also have to go into effect in these states including Vermont.


In response to Newsom’s executive order, a new multi-state coalition of think tanks and advocacy groups [represented by the Ethan Allen Institute in Vermont] has come together to say that this is not right. We will get into the reasons later. The coalition had a virtual press conference on Thursday, March 10, where we supplied a letter explaining our stance. We spoke to the media, answered questions, and explained why this law automatically taking effect is wrong and how it will hurt middle class families and lower income families in our individual states. This is very true in New England. As I said, there are sixteen CARB states across the nation, but all New England states are tied to this California law except for New Hampshire. Our coalition is being led by Vermont, Maine, Massachusetts, Rhode Island, and Connecticut.


Bill: Meg Hansen is with us today on Common Sense Radio, and we sure do appreciate her tipping her hat to our preferred way of communication. But we respect all the other ways of communicating. Contrary to popular belief, Bruce Shields and I were not around at the time that stone tablets were used. We're making our way into the 21st Century, but it’s a little bit of a struggle for us.


Today, we're talking about the effect of banning internal combustion engines. All of those who are regular listeners of our community on the air will remember that many of us believe that it was the internal combustion engine that in the early 1900s paved the way – perhaps a bad metaphor – let’s say,  opened the door to tremendous improvements in the mobility of the American people and the prosperity that followed from that freedom.


And as a matter of fact, we should also remember that it improved the environment. Earlier, enormous amounts of trees were being cut down and fields left open to produce the hay for the horses, and also tremendous amounts of pollution in the urban areas of America and throughout the world where it was hard to dispose of the byproduct of using literal horsepower.


As always, important questions are complicated. What Meg is going to help us understand today is that if we try to solve a problem with massive government intervention, more often than not, we create unintended consequences that hurt the very people who were aiming to help. Keep us going.


Meg: The first point, at the regulatory level, is that Vermont is not a colony of California. We have our own elected representatives, as do they. This really should be an issue that our legislature and our own regulatory authorities discuss, and Vermonters should have a say in it.


What’s interesting is that the Californian board did not make this decision. Rather, Gavin Newsom did by issuing an executive order that compels the CA Board to ban internal combustion engines and as a result, sixteen other states must follow suit. So, it's really one person's point of view, and a lot of people take issue with it. Naturally, it’s a legitimate objection.


This matter should be returned to the states. Nobody wants autopilot laws or regulations. Making Vermont decouple itself from California when it comes to this issue at least and allowing Vermonters to have a say – that's the first point we raised at the press conference and will continue to raise in terms of building awareness about what's going on and informing Vermonters.


And then, we get into the second aspect. Enacting a technology ban or a mandate cannot succeed in the absence of affordable alternatives. An energy source is successful when it is cheap, reliable and plentiful or abundant. And that's what fossil fuels are, whether it’s gasoline, diesel, propane etc. These are reliable sources that are abundant and cheap, and as you said Bill, they transformed human civilization.


We became food sufficient, witnessed a population boom, and we now live longer. This energy source completely transformed how human civilization looks and functions. There's a lot to be grateful for when it comes to fossil fuels. We don't have to get into any ideology, just look at the picture practically and pragmatically. If you want to replace or just ban this form of energy, there needs to be an equivalent. There needs to be something that is cheap, abundant and reliable. We don't have that.


How do we get there when it comes to zero emissions? When they say zero emissions, they mean no carbon emissions, no fossil fuels. The most dominant ZEV technology available is electric vehicles. But at this point, EVs are not affordable and not readily available as far as middle class or lower income families are concerned. It's out of our reach.


I want to share a statistic. We know that the government heavily subsidizes electric vehicles. And you also get tax credits for buying them. But 82 percent of Americans who took advantage of the government tax credit have six figure salaries. This is a huge class divide. Vermont is very rural. Look at our state’s socioeconomic divide. For the vast majority of Vermonters, EVs are completely out of reach. What’s the point of choosing an arbitrary year like 2035 and commanding that we're going to ban the dominant vehicle technology by then? I don't see how it achieves anything except for political posturing. And, it does hurt middle class and lower income families.


Somebody commented on the Ethan Allen Institute website that an electric vehicle right now costs more than, let's say, various different models of gasoline powered vehicles. But he thinks that in the long term, it'll get cheaper. It's not just about the retail value. We're not talking about a Tesla versus a Toyota. There is a lot that goes into supporting an electric vehicle. It's not magic.


You have to upgrade your home electric grid, so you can charge the EV at home. How are you going to be able to afford the extra costs? The battery has to be maintained. You have to know where there are electric charging stations. If it gets too cold or too hot, the battery dies. There are many aspects to it. Never mind what happens to the battery after it's dead. That's another discussion altogether. There are a lot of costs that go into owning, maintaining, and being able to reliably drive an electric vehicle and all of those costs add up.


Bill: Today with Meg Hansen, we're taking a look at the question of whether, at some point in the future, internal combustion engines powered by fossil fuels should be banned. Second question, that Meg mentioned earlier, had to do with the idea of whether states should make their own policies or should they hitch their policies automatically to that of the biggest population state in the country, California. Why should we automatically hitch our policy to that of another state?


Meg: Right now, we have to consider the fact that we are facing record high inflation and record high gas prices. That our policymakers would try to limit our choices, instead of expanding them, I find worrisome. I think we really should be helping Vermonters, and Americans broadly, to expand choices because most of us don't have the disposable income to ride inflation waves.


I find it particularly concerning that so many people in positions of power and influence are demanding that we eat the extra costs at the gas pump. “It's just a dollar or two more,” they say and that we should “stick it to the man” or in this case, the Russian man. That's very worrisome. Unless you make $16 million a year or at least $1,000,000 a year as your annual income, these kinds of arguments are really ridiculous.


I can give you a personal example. When I was considering the cost of heating oil while estimating our annual budget, it was about $100 a month going into April, May and June. But now we're looking at over $100 a week. It has more than tripled. And that’s just heating oil for the home. When you look at gas prices, you get a huge shock every time you go to fill up the tank. All these things add up. I don't know how much extra it is but let’s say an added $5000 or $6,000 this year – most families don't have that.


We are talking about real numbers, reality, and reasoning. I think that's far more important than ideology or wishful thinking about the future and hoping that somehow by magic, in the near future, electric vehicle technology will rival that of internal combustion engines. So far, the entire EV sector has been propped up by government subsidies. We're talking about billions, and yet they cannot compete. So why not allow that technology the time and space it needs to evolve? Maybe it'll fail. Maybe another solution will come up. But we can't force something to happen, especially when we look at the record and see that it is not happening. We're not there.


Bill: One of the questions that Meg is raising and asking us to consider is: even if this is successful, how does it fall unevenly on people who live in rural areas? This is one of our principal concerns for public policy in Vermont. So give us a couple of questions you'd like us to think about.


Meg: Here’s a question I want everybody to think about. Can the New England electric grid handle a massive increase in the demand for electricity that will follow a 100% transition to electric vehicles?


Bill: And what are the other competing public policy goals that we want to achieve, and how will a profound and rapid change in advancing one goal, no matter how well-intended, affect the others? Meg, keep us going.


Meg: When the Vermont Yankee nuclear plant was shut down, the Boston Globe (not a right wing newspaper by any standard) editorialized that it would have a negative impact on the New England grid for the foreseeable future. I said earlier that we need cheap, reliable and abundant energy to run our civilization. We already know that our electric grid has weaknesses. If you put more pressure on it, as would happen if we have all electric vehicles, then what happens? What are the real consequences that we can and should expect?

Let’s look at what’s happening in other states that are placing a higher demand for electricity on their grid. One outcome is planned blackouts. In California, where I have family members, I have heard that they are asked to start using less electricity after 4:00 pm. We are seeing energy scarcity, or planned energy poverty, in the United States – a global superpower, a first world country. There should be no problems with electricity here. Yet we're seeing these issues because there's only so much that an electric grid can take.


If we want a full transition to electric vehicles or any kind of electrified society, we need to have power grids that can support such a change. It calls for a holistic approach. You can't get to these questions or to any solutions if you approach this issue with a black and white perspective. I mean, if you see fossil fuels as bad and electric vehicles as good. It's not as simple as that. There are many complex and dynamic factors at play.


I mentioned in passing earlier that the EV battery comes with many challenges. The battery, once it's dead, cannot be recycled. It can’t go into a landfill because it's flammable and toxic. If you are serious about environmentalism and taking care of our surroundings, then how are we taking care of this waste?


Let’s consider corporatism or crony capitalism. There are many companies that are benefiting from the government’s subsidizing of electric vehicles. No doubt, there is a profit factor here. This is not an altruistic endeavor. I have no problems with profit-making. I'm simply saying that if people have adopted a black and white point of view, wherein fossil fuels symbolize greedy oil companies while electric vehicles represent altruism through and through, then that is not true at all.


There are also geopolitical considerations. Which country dominates the mining of rare earth minerals that go into making EV batteries? Which country has most of the factories that make these batteries? China. How does that impact our energy transition strategy and our standing in the world? There are indeed many moving parts to consider.


Pushing the idea that fossil fuels and the internal combustion engine are bad while electric vehicles are good – that is reductive. It prevents us from addressing the real concerns that arise if we are to take an energy transition seriously. It also prevents us from addressing the problems that are within the electric vehicle industry, including the companies and the countries that do business in this sector.


Bill: One of the questions we always ask, and we ask it along with you today and Meg in particular, is – what's the best way to create prosperity so that we have the resources to address as many of those goals as we can? Usually it requires economic growth. And if we're going to have economic growth over the long term, we have to give people economic freedom. Meg, keep us going.


Meg: I'd like to share an example of how human civilization naturally switched to a more eco-friendly form of energy. Whaling was a huge industry a couple of centuries ago. Whale oil was used as a fuel for all sorts of purposes. It led to whales becoming endangered, which was awful. No one wants that. But the reason why whaling stopped, and why we stopped using whale oil, was because vegetable oil was developed.


Vegetable oil could be used in place of whale oil. It didn’t involve killing any animals and it is cheap, reliable and abundant. Everybody organically made the transition. People did not have to be convinced to stop killing whales. I don't see human beings as inherently evil, looking to be exploitative or looking to hurt the environment and others that share Planet Earth with us. I think people are trying to do the best that we can with the resources that we have. And when we get a better option, we go for it.


If electric vehicles really were a better option than internal combustion engine vehicles, then everybody would automatically adopt them. It would be a smooth, effortless transition. You wouldn't have to ban things or mandate things.


I believe that giving subsidies hurts the EV sector. You need to be able to allow that sector to evolve. We're really smart when it comes to technology. We're in the twenty-first century. We can do all sorts of things. So why can't we get this right? We can! But when you know that government money is coming in, it messes up your incentives to innovate and grow. If they had to actually compete in the market, that would be a different incentive, a different driving factor. It would force companies to find new ways to compete with internal combustion engines, which is what we want.


Competition, as you have said Bill, is a very powerful motivator. Trying to make money and make a profit is not greed; it is finding compensation for the talent, hard work, and time that you put into developing something. I think these are really powerful motivators. They've proven to be so – not only psychologically but also economically in the marketplace. If you really want to move away from internal combustion engines, then mandates or diktats are not the way to go.


A real solution would be to support the EV industry where it is right now. You can’t simply hope that in thirteen years, it will all be perfect. Allow this technology to evolve, fail, grow and learn, instead of propping it up and thereby ruining its chances of becoming something successful and transformative that could bring our society to the next level.


Bill: Good insights. Indeed.


Meg: What we really need to do is help the average Vermonter, the average American, to become richer, not poorer. Whatever technologies allow that to happen, we should support them. Now, that's not to say that we should pollute the whole place. As you said Bill, fossil fuel driven technology has helped minimize pollution. We are no longer living in Victorian England with the smoke filled factories. We're not living in smoggy L.A. of the 1950s. We live in a cleaner, more eco-friendly world because of our technologies and thanks to the abundant, reliable and cheap sources of fossil fuel energy that drive modern civilization.


Meg Hansen is president of the Ethan Allen Institute.


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