Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Kazuo Okamoto, who takes over as head of research and development at Toyota next month, said the extra costs of hybrid cars more than wiped out any financial gains of lower fuel consumption. Buyers in the US would have to want to help the environment, not just save money. In Japan and Europe, the extra costs were approximately balanced by fuel savings.

Toyota had set a target of reducing the extra cost of the hybrid to a level where it could compete on value with ordinary cars by 2010 at the current US petrol price of just over $2 a gallon, he said.

“The major barrier to wider acceptance is cost,” he said during a visit to Europe.

“When you just use the argument of fuel efficiency, the purchase of a hybrid car is not justified. But this car has other interests, for instance environmental protection.”

Another Toyota executive was more blunt in his analysis: “Buying a hybrid is about political correctness, it is not about the money,” he said.


Sad really in that the cost is not lower.

Linky

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Well, there are tax rebates, which this toyota guy doesn't seem to be taking into account. Also there are psychic benefits (alluded to with the "political correctness" comment).

You can't really "financially justify" buying a Mercedes over a Civic. Well, most people can't. I guess people that drive clients around a lot could, or men buying them for trophy wives.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

I saw an op/ed article about this in the WSJ either yesterday or today. I guess the Prius costs many thousands of dollars more than similar non-Hybrid cars (I think the figure was $9,000, but I might be wrong), so you'd have to drive uber miles to make it economically +EV.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Good points and yeah the tax credits do mitigate the cost. I guess the Prius is a status symbol of sorts.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
Also there are psychic benefits

[/ QUOTE ]

This is the only benefit. It is the green's version of conspicuous consumption, and being better than the Joneses.

The tax benefits are just Peter stealing from Paul.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
The tax benefits are just Peter stealing from Paul.

[/ QUOTE ]

No they aren't. They are internalizing an externality.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]
The tax benefits are just Peter stealing from Paul.

[/ QUOTE ]

No they aren't. They are internalizing an externality.

[/ QUOTE ]

Do you feel superior to us regular mortals because you are a vegetarian?

If you do, you will understand why the hybrid buyer is willing to pay more for their car despite its having a negative effect on the environment. It makes them feel superior to the great unwashed.

The tax benefits were passed by politicians who also wanted to feel superior to the rest of us, because they "care" so much about the environment. Forget for the moment that the tax benefit has no measurable effect on the environment.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

The tax benefits are still real, though, at least to the guy making the purchasing decision. In fact, you're not really "stealing" from anyone in this situation, you're reducing the amount the government steals from you.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
The tax benefits are still real, though, at least to the guy making the purchasing decision. In fact, you're not really "stealing" from anyone in this situation, you're reducing the amount the government steals from you.

[/ QUOTE ]

I guess you don't understand that that money is still needed to run our government. Other taxpayers (maybe future taxpayers if we borrow the money) will have to pay the taxes to cover the taxes you are not paying.

Yes, you are stealing from other taxpayers.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
Do you feel superior to us regular mortals because you are a vegetarian?

[/ QUOTE ]

Of course not. I think the world would be a better place if more people became vegetarian, but I think the same "better place" effect could be achieved by regulating modern agriculture more stringently in some areas and by forcing some of their externalities to be internalized.

In fact, if a good job were done of that, then it would be far more effective at making the world better than if merely more people became vegetarian. While reducing the demand for meat would help, it would only be a big band-aid to a more fundamental problem.

[ QUOTE ]
If you do, you will understand why the hybrid buyer is willing to pay more for their car despite its having a negative effect on the environment. It makes them feel superior to the great unwashed.

[/ QUOTE ]

My wife drives a hybrid. She bought it because she enjoys it (part of that enjoyment being the knowledge that she is being socially responsible), not because it makes "financial sense." But that's not my point at all.

My point is that tax incentives to drive lower emmissions vehicles are hardly Peter stealing from Paul. Air pollution is one enormous externality in our economy. Tax credits for lower emmissions are a way to internalize that externality. There's no reason pollution should be "free" to the polluters.

Industries from agriculture to automobiles to energy to mining to textiles to whatever else are taking a big fat dump on our environment. And they are doing so essentially free of charge due to a FLAW in our market system. While I think it's nice if people make responsible decisions on their own, I don't think there's a moral component to that. I'm ok with people acting in rational self-interest, but the structure under which they do that has to minimize externalities and stop the pillaging of the world's resources. Presently our structure comes nowhere close.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

[/ QUOTE ]

We use lots of water, and don't really do anything about the water problem. There are lots of things we could do to live a more responsible life than what we live. We could stop driving entirely. We could go vegan. We could grow my own food and eschew the entire agricultural system. We could use less water.. less power.

We could buy a small plot of land somewhere off the water and power grids and live a subsistence life and donate the rest of our net worth and future income to charities.

We don't do that, nor do I think that doing any of these things is a moral imperative. We do what we can... what fits for us in our lives. And we leave it at that.

I would never argue that being vegetarian or driving a hybrid makes me a better or more moral person than someone who isn't and doesn't. I think that's BS. I think it's basically ok if people act in their rational self-interests, and have no qualm with people who make other decisions for themselves.

What I do have a problem with is a system of laws and a market that actively refuses to internalize externalities when possible. It's the basic principle I learned when I was five, "If you make a mess, you clean it up." Or, in the case where you can't actually clean it up, you pay for it to be cleaned up. Presently our system allows people, companies, everyone to make mess after mess and then throw up their hands and say, "Wasn't me." That's what needs to change. If you pollute the air three times more than I do, you should shoulder three times the cleanup costs. Or if the air can't be cleaned, then you compensate people for their dirty windows, soot-clogged machinery, respiratory problems, etc.

It shouldn't be a voluntary choice. We shouldn't need uppity movie stars in Priuses to make impassioned speeches about the environment saving 20 mpg in their car, but burning 2000000 mpg in their private jet. The cost of pollution should be BUILT IN to the prices of things.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

It would be if the roads were privatized. Ad hoc taxation will not produce the result you desire.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]
The tax benefits are just Peter stealing from Paul.

[/ QUOTE ]

No they aren't. They are internalizing an externality.

[/ QUOTE ]

No they're not, Ed. Externalities are costs borne by somebody (i.e., society) other than the person responsible for creating the cost (i.e., gas guzzler drivers).

To "internalize an externality" means the gas guzzler pays the cost of the externality, i.e., a gas guzzler tax.

In the case of hybrids, society is bearing the cost (i.e., by spending from the public fisc) to pay for the actions of the gas guzzler driver (who is a free-rider).

Net net, subsidy of hybrid purchases has less to do with making sure that cost-creators bear the external costs for their actions, and more to do with creating incentives through public spending to influence private behavior.

The easiest way of forcing drivers to externalize their costs is to tax gasoline heavily. Subsidies through tax credits for hybrid vehicle purchases deals more with trying to drive volume for technology development.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
It would be if the roads were privatized. Ad hoc taxation will not produce the result you desire.

[/ QUOTE ]

How would privatizing roads do this?

I'm not necessarily arguing that taxation is the right or best means to internalize externalities. There might be far better solutions. But to say that modest tax credits for low emissions vehicles is tantamount to stealing is a little silly AFAIC.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

[/ QUOTE ]

Poker players do a lot to save water. It has been my experience that they often save water by not taking a bath on the morning of the day they sit next to me at the tables. [img]/images/graemlins/tongue.gif[/img]

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
In the case of hybrids, society is bearing the cost (i.e., by spending from the public fisc) to pay for the actions of the gas guzzler driver (who is a free-rider).

Net net, subsidy of hybrid purchases has less to do with making sure that cost-creators bear the external costs for their actions, and more to do with creating incentives through public spending to influence private behavior.

[/ QUOTE ]

I don't understand your point. It sounds like you are arguing that a $2,000 credit for hybrids is not internalizing, but a $2,000 tax reduction for everyone PLUS a $2,000 penalty for non-hybrids would be. That can't be what you are arguing because obviously they are the same.

I do agree that the present tax code is not designed to internalize automobile pollution. SUVs and trucks get a tax credit too.

Honestly, I think the tax code is so messed up that it needs to be redesigned from scratch. I think that each car should be assessed an "emissions per mile driven" number and be charged a per-mile levy to be assessed every time a car is registered. Just like you pay for power per KWh, I think you should have to pay per mile you drive a car (lower emissions paying less), above and beyond gas prices.

Obviously, there are lots of kinks to be worked out with that, not the least of which being that in our country, such a levy would be extremely regressive right now. It would have to be phased in, or a compensating credit would have to be put in and phased out.

But right now this externality essentially isn't being addressed, and it's not because it's an intractible problem. It's because many with money and power right now have a vested interest in ensuring air pollution remains an externality.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
The easiest way of forcing drivers to externalize their costs is to tax gasoline heavily. Subsidies through tax credits for hybrid vehicle purchases deals more with trying to drive volume for technology development.

[/ QUOTE ]

I used to favor a heavy gasoline tax, but now I'm not sure I do. Gasoline isn't the problem... emissions are the problem. It's a tough question, though, and a gasoline tax might be the best way to address the problem because, though imperfect, it's relatively simple.

I dunno. I'm not claiming I have all the answers. I have very few answers... as these are tough questions. But they are questions worth raising and addressing, and unfortunately I see our government entirely unwilling to even discuss this stuff.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]
It would be if the roads were privatized. Ad hoc taxation will not produce the result you desire.

[/ QUOTE ]

How would privatizing roads do this?

I'm not necessarily arguing that taxation is the right or best means to internalize externalities. There might be far better solutions. But to say that modest tax credits for low emissions vehicles is tantamount to stealing is a little silly AFAIC.

[/ QUOTE ]

Well, I'm an anarchist, so all taxation is theft, IMHO, but that's a different discussion.

If the roads were privatized, their owners could be rightly sued for the pollution they create. In fact they'd be sued so often that they would probably just set up a system to just automatically pay their neighbors without going through the expense of lawsuits. The road owners of course will pass these costs on to their customers. Competition will force them to charge differential rates based on the differing emissions of the vehicles of their consumers. This will provide simple, direct market incentives to purchase lower emissions vehicles. This in turn provides a real, direct market incentive to research, design, and produce low emissions vehicles.

There are a number of other market efficiencies that would come into play that would make the roads cheaper, safer, and cleaner. For example, the technology exists (and has existed for probably a decade) to fully automate the roads, at the very least the highways. 95% of a modern road at full capacity is completely empty. Computer technology could vastly increase the packing efficiency of the roads, which is today limited by human psychological factors. A computer controlled road that is 50% empty still carries ten times the traffic of a modern road. Furthermore, computer control would allow significantly higher speeds. This means that the traffic flux that could be sustained is enormous. The economic implications are enormous. Computer controlled drafting would increase fuel efficiency and lower emissions by a significant fraction (perhaps 20%, although I don't remember the number off the top of my head).

You cannot sue the current owners of the roads for the damage that they do, hence there is no incentive to reduce emissions, other than political pressure. Political pressure, of course, is never applied in the right place to actually solve the problem. Political solutions always create more problems and make the problem worse for a number of reasons (the economic calculation problem, etc).

Currently the system is set up with the wrong incentives. Highway and road bureaucracies recieve more funding when they have more problems, not when they operate better. Hence there is really no incentive for the road bureaucracies to improve the road system. And as you've already noticed the cost of pollution is simply externalized.

By the way, thanks for SSH. Best poker book I've ever read, and I have a stack 4 feet thick.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Anytime you are trying to make sure externalities are borne by the one creating them, the easiest way to do it is to simulate a use tax. A gas tax (or as one person suggested, a road tax), is a proxy for use.

Emissions = usage x efficiency. By employing a gas tax, you punish people for driving cars, and driving inefficient cars. This gets at what you want.

The big complaint people have with market-based solutions is that they are often regressive. Gas could run $10 a gallon and I would still drive an SUV. On the other hand, some poor guy with a 1982 Monte Carlo would be getting screwed just b/c he can't afford a new Civic.

Tax law always has these trade offs, i.e., tax neutrality, progressivity/regressivity, etc. Im with you in generally favoring market neutral, non-distortive taxation, but then again, I could care less about tax progressivity, and in fact I believe the very concept of progressive taxation is immoral.

Going back to your hybrid vehicle discussion, my main point was to indicate that the purpose of the credit is not internalization of costs. It is to create a government subsidy to drive the introduction of new technology by building demand.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
There are a number of other market efficiencies that would come into play that would make the roads cheaper, safer, and cleaner. For example, the technology exists (and has existed for probably a decade) to fully automate the roads, at the very least the highways. 95% of a modern road at full capacity is completely empty. Computer technology could vastly increase the packing efficiency of the roads, which is today limited by human psychological factors. A computer controlled road that is 50% empty still carries ten times the traffic of a modern road. Furthermore, computer control would allow significantly higher speeds. This means that the traffic flux that could be sustained is enormous. The economic implications are enormous. Computer controlled drafting would increase fuel efficiency and lower emissions by a significant fraction (perhaps 20%, although I don't remember the number off the top of my head).

[/ QUOTE ]

Now this is an extremely intriguing idea. It's one I've sort of fantasized about before, but never considered seriously.

[ QUOTE ]
By the way, thanks for SSH. Best poker book I've ever read, and I have a stack 4 feet thick.

[/ QUOTE ]

I'm glad you liked it. [img]/images/graemlins/smile.gif[/img]

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
I guess you don't understand that that money is still needed to run our government. Other taxpayers (maybe future taxpayers if we borrow the money) will have to pay the taxes to cover the taxes you are not paying.

Yes, you are stealing from other taxpayers.

[/ QUOTE ]

There's a bank robber hitting all the banks in town. I, as a bank owner, notice this pattern, and increase my security. The robber decides to skip my bank and rob someone else. Have I stolen from the other banks in town?

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
set up a system to just automatically pay their neighbors without going through the expense of lawsuits.

[/ QUOTE ]
How about the people further away? Pollution doesn't stay locally. Just poking a bit, it's an interesting thought experiment.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

If the people further away have damages, let them pursue them. As it stands now, governments encourage and protect polluters by setting "acceptable standards". Anyone that pollutes below that arbitrary level is (basically) immune from claims, even if they cause actual, measurable damages. That's *exactly* how externalities are artificially created (they don't exist in a true free market).

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

there certainly is a problem with measurements in all this. many problems due to pollution isn't really measurable in the short-term. or indeed in the long run.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

[/ QUOTE ]

Are you trying the "You're a dirty hypocrite if you try and improve one thing but not everything else." argument?

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]
Also there are psychic benefits

[/ QUOTE ]

This is the only benefit. It is the green's version of conspicuous consumption, and being better than the Joneses.


[/ QUOTE ]

Certainly the "green's version of consipicuous consumption" is one motivation, but there are plenty of other motivations as well.

Regardless of your view of the morality of the tax benefit, it does exist and is therefore another motivation.

Other motivations to buy hybrids include:
1. Some carpool lanes allow hybrids or ultra low emissions vehicles without a passenger (thus, saves time on freeways)
2. Some states require fewer smog checks on low emissions vehicles (thus, saves money on smog checks)
3. Hybrids don't get stolen as often (excluding the hybrid civic)
4. Currently, hybrids retain their value better than non-hybrids

Everyone has a variety of motivations for why they purchased the car they have. Here is my story:

I bought a used 2000 Honda Insight for $9500 two years ago. Kelley Blue Book rates my car worth at least
private party = $9,810
trade-in = $8,260
That's pretty good, I'd say.

I bought my Insight because:
1. I like how it looks. It's space-age cool. It has rear fender skirts! It's awesome!
2. I like how it feels. It's small and cosy, like the womb [img]/images/graemlins/smile.gif[/img] I love it. I can make U-turns anywhere, no problem. I can parallel park anywhere, no problem.
3. It reminds me of the car I had in high school (a Toyota Starlet). The hatchback makes this small car way more versatile than my last sedan. I have loaded it up with all kinds of things.
4. It was a good deal. I didn't get ripped off. It hasn't had any major problems.
5. It stands out in a crowd. Yeah, I draw attention. People always ask me about it. People have even left notes on it with phone numbers. They like it.
6. It never gets vandalized. My last car (Toyota Tercel) was broken into 4 times! But no one touches this car.
7. Since I can go so far on a tank, I'm always up for road trips. It brings back that high school "always want to drive" feeling.

I'm sure I'd like a cabrio or a mini coopper too, but my lil insight is just awesome! I love her!

PS - Mason drives an Insight too, just like mine!

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]

Do you feel superior to us regular mortals because you are a vegetarian?

[/ QUOTE ]

Haha. Ed would feel superior no matter what.
He was born with a huge ego!

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
If the roads were privatized, their owners could be rightly sued for the pollution they create.

[/ QUOTE ]

This doesnt work under American tort law for many reasons. First, as a practical matter, any individual's "injury" from pollution is likely to be de minimum, and thus individually there is no incentive to sue (even though collectively the injury might be material). Second, because each individual's injury is de minimus, any provable damages would also be de minimus. Thus even if you wanted to get lawyered up to sue, there is no economic incentive to sue. Third, thus the primary remedy you're talking about is really injunctive in nature--ie, an order from the court to the defendant "to stop polluting." This is a classic case of a situation where government intervention is appropriate--protection of public goods where a collective action problem prevents the tort law from properly functioning. Fourth, the use of lawyers to reduce pollution is an unnecessary economic deadweight loss--lawyers essentially are economic friction for both the plaintiff and defendant. A much more efficient solution is regulation, with each individual complying voluntarily with regulations b/c of the threat of being discovered and sanctioned (criminally or civilly). Economists would describe this as lowered "fencing costs". Fifth, it is not even clear that road owners could be held liable under tort law for the pollution caused by the operators of vehicles. For instance, road owners could make a rule: "Only low-emission vehicles may enter the tollway. By driving on our tollway, you represent that you drive a low emission vehicle." If it turns out that a high-emission vehicle were driving on the tollway (and thus causing a pollution "injury"), the toll road owner would probably not be liable under American tortlaw, because the injury was caused by an intervening tortfeasor. Thus, as a legal matter, your approach is contrary to American principles of civil liability.

Im all for market solutions and individual action, but your example is really horrible.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
I am curious, you and your wife seem to be willing to take active steps to improve the environment as you perceive it. I understand LV has a bit of a shortage of clean water. What do you do in your personal lives to help the water situation? Or is it not an issue.

[/ QUOTE ]

We drink beer instead of water and we shower together.
[img]/images/graemlins/wink.gif[/img]

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Can you explain "de minimus" for a non-lawyer?

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Despot is exactly right.

de minimus = minor, very little.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]
If the roads were privatized, their owners could be rightly sued for the pollution they create.

[/ QUOTE ]

This doesnt work under American tort law for many reasons. First, as a practical matter, any individual's "injury" from pollution is likely to be de minimum, and thus individually there is no incentive to sue (even though collectively the injury might be material). Second, because each individual's injury is de minimus, any provable damages would also be de minimus. Thus even if you wanted to get lawyered up to sue, there is no economic incentive to sue. Third, thus the primary remedy you're talking about is really injunctive in nature--ie, an order from the court to the defendant "to stop polluting." This is a classic case of a situation where government intervention is appropriate--protection of public goods where a collective action problem prevents the tort law from properly functioning.

[/ QUOTE ]

What? Your argument is that individuals are most likely not harmed enough to bother pursuing compensation, but that they need regulation to protect them from what isn't harming them?

And the remedy is not injunctive. You simply cannot get them to "not pollute," since even low emission vehicles still have emissions. Furthermore, this is not even an argument in favor of regulation, since as pvn has already pointed out, regulations set "acceptable levels" of pollution which are, obviously, non-zero.

[ QUOTE ]
Fourth, the use of lawyers to reduce pollution is an unnecessary economic deadweight loss--lawyers essentially are economic friction for both the plaintiff and defendant. A much more efficient solution is regulation, with each individual complying voluntarily with regulations b/c of the threat of being discovered and sanctioned (criminally or civilly). Economists would describe this as lowered "fencing costs".

[/ QUOTE ]

Wait. Lawyers are economic friction but regulatory bureaucracies are not? How is not polluting for fear of being sanctioned by a regulatory agency better than not polluting for fear of being privately sued?

Furthermore, a regulatory bureaucracy has a financial incentive to not solve the problem. If the problem were solved the regulatory agency could not generate revenue nor justify its existence.

Not to mention the inevitable corruption that arises from government regulation of private industries as competitors lobby to have the regulations written and interpreted in their favor and against the interests of their competition.

Did I mention that I worked for the EPA?

[ QUOTE ]
Fifth, it is not even clear that road owners could be held liable under tort law for the pollution caused by the operators of vehicles. For instance, road owners could make a rule: "Only low-emission vehicles may enter the tollway. By driving on our tollway, you represent that you drive a low emission vehicle." If it turns out that a high-emission vehicle were driving on the tollway (and thus causing a pollution "injury"), the toll road owner would probably not be liable under American tortlaw, because the injury was caused by an intervening tortfeasor. Thus, as a legal matter, your approach is contrary to American principles of civil liability.

[/ QUOTE ]

A "low emission vehicle" still has emissions. A road owner could not provide a road without admitting liability for pollution usless the vehicles were actually zero-emission.

Furthermore I am not representing that I believe the current instantiation of American tort law is the "correct" one. In fact, it is something that I have little knowledge of the details of, so I can't really mount much of a defense (as you can probably tell). So if you're going to descend into the arcana of tort law, I guess you win.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]


What? Your argument is that individuals are most likely not harmed enough to bother pursuing compensation, but that they need regulation to protect them from what isn't harming them?

[/ QUOTE ]

No, the injuries 1)will be difficult to proove and 2)only a few people will get cancer, most will get asthma, some will not have noticeable injuries. All these injuries will be caused by a variety of pollutants, not just the highways.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

Isn't there another problem with hybrids. That is, the energy costs associated with making them (perhaps associated with batteries) exceed the typical fuel savings.

Thought it was discussed elsewhere on this forum a while back but I can't find the link.

~ Rick

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
What? Your argument is that individuals are most likely not harmed enough to bother pursuing compensation, but that they need regulation to protect them from what isn't harming them?

[/ QUOTE ]

No, my argument is that nobody has been sufficiently harmed such that they individually have the incentive to pursue legal remedies. This is the classic dillema economists call the "collective action problem." For instance, suppose Citibank stole 1 cent per account each month. Would you sue? No, because your remedy is the recovery of 1 cent. Thus "collective action" is required rather than individual action. This is why problems like this are solved either by the "class action lawsuit" or through governmental regulation and enforcement.

[ QUOTE ]
regulations set "acceptable levels" of pollution which are, obviously, non-zero.

[/ QUOTE ]

Obviously. Pollution is acceptable. This is widely agreed upon in the regulatory world (EPA, OSHA, whatever). As it should be. For instance, suppose the manufacture of steel caused as a bioproduct, the production of dioxin, a major carcinogen. Should steel making be outlawed? No. Instead, what happens is that government regulations proscribe an acceptable level of pollution (although some pollutants can be deemed so toxic that a zero-level is the only acceptable level). Basically, sound regulation is all about cost-benefit analysis, not absolute prohibitions on pollutants, etc.

[ QUOTE ]
Lawyers are economic friction but regulatory bureaucracies are not?

[/ QUOTE ]

Both create deadweight economic losses. The question is which creates a smaller loss. Bureaucracy, while definitely undesirable, is much more efficient than private litigation (which by the way, requires that the government pay for a separate bureaucracy known as the court system). If you recommended massive private litigation, then you would necessarily create a massive judicial bureaucracy.

[ QUOTE ]
How is not polluting for fear of being sanctioned by a regulatory agency better than not polluting for fear of being privately sued?

[/ QUOTE ]

There is a concept in tort law, particularly among the law and econ thinkers, about asking "who is the lowest cost avoider"? Basically, the law should be set up so that the least cost avoider takes action to avoid the injury.

Suppose, for example, that I own a house on a hill. You have a 1M house downhill from mine. If a landslide occurs, your house will be destroyed. I can build a retaining wall for $5000 downhill from my house but uphill from your house. If I build the wall, there is an 80% chance that a landslide will be avoided.

In situations like this, the law wants a retaining wall built because it is the lowest cost solution. The problem, however, is that I get minimal benefit from building this wall. So a few outcomes could happen. (1) Regulation gets passed that says "uphill owners must build retaining walls"; or (2) everybody gets taxed, and government comes in and builds a retaining wall itself; or (3) no retaining wall gets built, but the downhill landowner can sue me for negligent conditions of the land resulting in injury. (Actually, this last remedy is a bit unclear--the law distinguishes between "natural conditions occuring on land" and "artificial conditions and activities on land")

But my basic point is, when trying to figure out how an injury should be avoided, you need to look at the lowest cost avoidance. Voluntary compliance by individuals (due to the threat of civil or criminal liability from regulation), can be a very cheap solution (provided the regulation does not grow too unweildy). Private enforcement of rights is very very expensive.

[ QUOTE ]
Furthermore, a regulatory bureaucracy has a financial incentive to not solve the problem. If the problem were solved the regulatory agency could not generate revenue nor justify its existence.

[/ QUOTE ]

This is actually erroneous. Bureaucracy does not have an incentive to not do its job--its the opposite. The incentive bureaucracy has is to do its job, and then some. This is why bureaucracy grows. When laws get passed, bureaucracy steps in an starts the supervision/enforcement cycle, thus justifying its existence. One of the biggest complaints about the "administrative state" is that bureaucracies, through the rulemaking process, can essentially make an end run around the democratic legislative process, and start creating more and more quasi-laws that cost an ever increasing amount to comply with. For example, the consumer product safety commission prescribed the distance that slats on a baby crib can be spaced. Why? Because once upon a time, some kid got his head stuck between slats spaced too widely apart, and he got killed. So now government has created (independent of the democratic legislative process), a rule that costs all purchasers of baby cribs more money. THIS is why people hate bureaucracy--not because they go around trying to NOT do their job.

[ QUOTE ]
Not to mention the inevitable corruption that arises from government regulation of private industries as competitors lobby to have the regulations written and interpreted in their favor and against the interests of their competition.

[/ QUOTE ]

The private lobbying function is merely an extention of the democratic process. It is the way in which legislatures (and rulemakers) are influenced. I much prefer this approach than a tyrranical government that cannot be influenced by its constituency.

Do corporations have a disproportionate say? Undoubtedly. But we work in a market economy, and the corporatios have more money than the Earth Justice! crowd, so that's just life. If you dont like it, try to get Ralph Nader elected president.

[ QUOTE ]
A "low emission vehicle" still has emissions.

[/ QUOTE ]

Yes, chemistry is a bitch, isn't it. This is called combustion. There are byproducts. One byproduct is heat. Another byproduct is water. Another is CO2. Another are volatile organic compounds that turn into smog after they get hit by sunlight. What's your point? We should all walk? But walking creates byproducts. CO2 from increased respiration. Energy consumption in the form of food, which is turned into sewage, which is a pollutant? I dont understand your point.

[ QUOTE ]
A road owner could not provide a road without admitting liability for pollution usless the vehicles were actually zero-emission.

[/ QUOTE ]

Im not sure you have a good idea of what zero-emissions is. No such car exists. When you have an electric car, you use batteries. Batteries get charged off the power grid. The majority of the power in this country is generated from coal and natural gas plants, which in turn create emissions. Just because you cant see tailpipe emissions, doesnt mean these cars are zero emissions. This is called the "mobile source" vs. "stationary source" problem.

[ QUOTE ]
So if you're going to descend into the arcana of tort law, I guess you win.

[/ QUOTE ]

As you can see from my detailed response, I am not relying entirely on tort law to debunk your proposal. You just have a bad understanding of economic incentives generally. And also, you seem to have a poor grasp of air quality issues specifically. (In an earlier life, I analyzed air quality and transportation issues for a living.)

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]

Do you feel superior to us regular mortals because you are a vegetarian?

[/ QUOTE ]

Haha. Ed would feel superior no matter what.
He was born with a huge ego!

[/ QUOTE ]

No, he wasn't born with it. His parents fed it, and it grew large. [img]/images/graemlins/smile.gif[/img]

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
part of that enjoyment being the knowledge that she is being socially responsible

[/ QUOTE ]

If hybrid cars will help ensure the US can satify it's needs with shale oil. Hybrid cars in 2012 will most likely be far more damaging to the environment than a muscle car in the 60's.

If she wants to be socially responsible she should be asking her congressman why ITER has been on the shelf for 25 years. There are plenty of other things she can do. I've typed this stuff out a million times so I've lost all will to do it again.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
If she wants to be socially responsible she should be asking her congressman why ITER has been on the shelf for 25 years. There are plenty of other things she can do. I've typed this stuff out a million times so I've lost all will to do it again.

[/ QUOTE ]

I agree with you 100% about the fusion research. I'm not certain what's holding it up, but I strongly suspect it's the oil lobby. That makes me very mad.

Re: Toyota: \"No Financial Justification in US for Buying Hybrids\"
 

[ QUOTE ]
[ QUOTE ]
part of that enjoyment being the knowledge that she is being socially responsible

[/ QUOTE ]

[/ QUOTE ]

Actually, Ed's wrong here. I didn't buy it because I get enjoyment from it's "social responsibility." I listed my reasons above. I think it's a cool car, the technology is cool, it looks cool, it's fun to drive and it was a great purchase - great because it's actualy gone up in value and because it saves me gas money.

[ QUOTE ]

If hybrid cars will help ensure the US can satify it's needs with shale oil. Hybrid cars in 2012 will most likely be far more damaging to the environment than a muscle car in the 60's.

If she wants to be socially responsible she should be asking her congressman why ITER has been on the shelf for 25 years. There are plenty of other things she can do. I've typed this stuff out a million times so I've lost all will to do it again.

[/ QUOTE ]

You're doing the same thing Beer and Pizza did earlier - if I choose to fight one environmental battle, I must fight them all, otherwise I'm a hypocrite.

You go ahead and lobby your congressperson. I'm going to keep driving my hybrid and show that there is a market for creative energy vehicles & low emissions vehicles like electric vehicles, hybrids, hydrogen, corn oil...whatever...