The Contribution of Government:
Creating the Right Conditions
Consistent, long-term policies set the stage for effective CO2 reductions. For manufacturing industries, lead-time and advance planning are critical. Delivering any new motor vehicle technology to the market requires years of product planning, and policies that provide automakers with regulatory certainty and adequate lead-time are essential.
Technology neutrality is a sound policy. Technology development is inherently unpredictable, so government should strive for technology neutrality in their policies to the greatest extent possible. When automakers are racing to bring new vehicles to market, a broad-based approach promoting a wide range of vehicle technologies has the best overall chance of market success. This principle of technology neutrality should guide government vehicle technology programs from basic and applied research, to manufacturing R&D, to deployment and commercialization activities.
Government can incentivize consumer adoption of low-carbon products. Tax policy is a powerful tool to encourage the deployment of advanced technology vehicles, and should also be technology neutral overall. Many new technologies have up-front cost premiums that may deter consumers, despite the expectation of lower fuel costs over the lifetime of the vehicle. Consumer fiscal incentives can compensate early adopters for these cost premiums, accelerating the acceptance of new technologies by the market.
The energy and fuel infrastructure also needs investments. Government can contribute most by creating the conditions that promote private sector investment and innovation. Government has traditionally played a role in financing infrastructure projects, and as more alternative fuel and electric vehicles reach our roads, alternative fueling and charging infrastructures will require significant public investment.
Road infrastructure and traffic management with intelligent systems are also priorities for CO2 reductions. Alleviating congestion requires a balanced approach of policies, including road improvements, elimination of bottlenecks, and public transit in the most affected areas.
