Warped incentives

The Globe and Mail reports that the Cons can't claim they weren't warned about the ineffectiveness of their vehicle feebate program:

Federal bureaucrats warned the Conservative government to keep it simple when creating an incentive program for purchasing a fuel-efficient vehicle because setting up different rules for different models would make it dramatically less cost-effective.

Yet that advice clearly went unheeded in the 2007 budget, which included an incentive and levy system with separate categories for cars, trucks and vehicles that could run on a rare form of ethanol called E85...

For years, civil servants have measured the effectiveness of such programs by measuring how much public money would be required to reduce one tonne of heat-trapping greenhouse-gas (GHG) emissions.

“The key findings from the working group are that the cost per tonne of GHGs reduced is high for all options; ranging from $150 per tonne for a permanent incentive that rewards very fuel-efficient vehicles without distinguishing between technology or class; to $2,350 per tonne, for example, for an incentive that differentiates between passenger vehicles and light trucks and expires after four years.”

The second option is essentially what was announced in the March budget, with incentives of between $1,000 and $2,000 for purchases involving seven cars with four-cylinder engines, six SUVs and three mid-size cars with six-cylinder engines that run on E85 fuel. A small number of large vehicles would be slapped with a levy of as much as $4,000.

As alluded to in the article, the working group's findings suggest that none of the vehicle-incentive plans proposed would be particularly efficient at reducing emissions. But even if the Cons were bound to push forward with a vehicle incentive program of some kind, it speaks volumes that they didn't see any problem in choosing an option 15 times less cost-effective than another one readily available to them.

Again, it's not clear whether the Cons will even bother paying out a cent under the program - meaning that the longer-term cost may be measured as much in the missed opportunity to get something done as in sheer dollars and cents. But it's once again glaringly obvious that the Cons' talk about reducing greenhouse gas emissions hasn't been backed by even remotely effective action. And when the Cons have failed so miserably even when it comes to seemingly obvious choices such as the better form of feebate program, there's ever less reason to think they can be trusted with more complex policy issues.