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Globe editorial: Zero emission cars, powered by 100-proof subsidies

If you want to get a close look at a bit of technology that is highly inefficient and largely ill-suited to its main purpose, go take a gander at the car parked in your driveway.

Your "light-duty vehicle," as governments call it, is no better adapted to the modern world than a mastodon cloned from a few strands of ancient DNA would be. Over-powered by an internal-combustion gasoline engine, and with room for five or more passengers, it is large, dangerous and at risk of destroying the ecosystem it depends on for survival.

And it is everywhere. At any given moment, there are tens of thousands of these beasts on urban Canadian roads, the vast majority of them carrying exactly one person in a smelly stop-and-go procession down an over-crowded street.

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At every other given moment, even more cars are sitting idle in parking lots and driveways, awaiting their brief call to duty for a run to the corner store, or to the hockey rink. They are expensive to buy and maintain, and yet they mostly get used to a degree that is out of whack with their cost, size and complexity.

Looked at only from the perspective of their efficiency, the personal car has significant downsides. But efficiency is far from the only issue at play. The auto industry and the gas and oil industry are essential parts of the Canadian economy, and the car is a symbol of personal freedom and middle-class success. Since the early 20th century, cities and suburbs have been built around them. People in rural areas depend on them for survival.

Most Canadians just can't imagine their world without a car (or two) in it. And that is a challenge for anyone committed to reducing greenhouse gas emissions. Transport Canada says that, "in 2015, light-duty vehicle emissions accounted for approximately 50 per cent of Canada's transportation-related greenhouse gas emissions, and 12 per cent of the country's total emissions."

Ottawa has been restricting emissions from new cars for decades. But as of last week, it says it will now work with the auto industry, environmental groups, and the provinces and territories to get more electric cars on Canadian roads, asap.

It's easy to see where this is going, and where it's going to go wrong. Some environmentalists are arguing that Ottawa should legislate that a certain percentage of new cars sold each year be "zero-emission vehicles" – battery electrics, plug-in hybrids, and hydrogen fuel-cell vehicles.

This has already been done in Quebec, where the law requires that 15.5 per cent of cars sold there be ZEVs, by 2025. No, hitting that target will not be easy or cheap.

The problem is that this kind of regulation gets the whole problem of pollution reduction entirely backward and upside down. It's not the car companies that need to be persuaded to sell ZEVs; it's consumers that need to be persuaded to buy them.

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And the reason consumers aren't buying them is simple: Price. Most ZEVs are seriously expensive. Canadians have been slow to adopt them as a result: Only 11,000 were sold in 2016.

Tellingly, as many as 95 per cent of them were bought in provinces, such Ontario, Quebec and British Columbia, that give purchasers big government rebates, according to Transport Canada documents obtained by the Canadian Press last year.

If you want Canadians to buy ZEVs, you have to give them a financial incentive. One way to do that would be for Ottawa to spend billions of dollars subsidizing the cost of the cars, encouraging people to buy more.

This might work – you can solve any problem with unlimited money – but it would be an insanely expensive, highly inefficient way of reducing pollution. There is a much better financial incentive available, and it already exists: a tax on carbon.

The Trudeau government has taken a strong stand by forcing the provinces to impose either a tax or cap-and-trade. Properly done, they make carbon pollution more expensive – and leave it up to consumers to figure out how to reduce their pollution, and their costs. The goal is lower emissions, efficiently achieved by millions of individual choices, not more electric cars, achieved expensively and inefficiently on orders of a central planning agency.

Changing consumers' habits through pricing is the best way to reduce carbon emissions, because it lets the market work out the most cost-effective solution. Ottawa's goal should be lowering consumer emissions, at the lowest cost possible, and not rejigging an industry through regulation.

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If Ottawa must throw cash at the problem, don't put it into rebates. Invest more in public transportation. Urbanites drive to work because it's often the fastest, cheapest option. And it's cheap because roads are free – by which we mean, subsidized by taxpayers. Toll roads are far more environmentally and economically efficient. Forcing consumers to bear the cost of pollution will do more to reduce emissions than any industry subsidy every could.

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