Peter Reichard: Air quality is a leading issue in Utah, but can the state lead on clean vehicles?

(Francisco Kjolseth | Tribune file photo) Crews work to install a total of four electric car charging stations at Liberty park in Salt Lake on Wednesday, Jan. 18, 2017.

Along the Wasatch Front, there may be no quality of life concern more urgent than clean air. Utah Foundation’s own survey work finds again and again that air quality is a top concern of citizens. The single biggest culprit in our air quality woes is us — driving around in cars, trucks and heavy-duty vehicles that convert gasoline and diesel fuel into unhealthy ozone and particulate matter in our air.
It follows that promoting alternative fuel vehicles should be a top priority. Given the air quality challenges particular to the Wasatch Front, one might even expect Utah to look for ways to lead the nation in the move toward such vehicles.
In that respect, we still have a distance to go. Utah Foundation’s new report, “Driving Toward a Cleaner Future: Alternative Fuel Vehicles in Utah,” found that electric vehicles — or battery electric cars and plug-in hybrids — accounted for less than 2% of the nation’s new vehicle market share in 2018. In Utah, electric’s market share was even lower, about 1.6%.
Addressing the fears of consumers is a core challenge in alternative fuel vehicle adoption. Most Americans would not consider purchasing electric cars out of concerns about running out of power, the availability of charging stations or initial vehicle cost.
The good news is, due to state and local investment (including funding from the landmark settlement with Volkswagen), as well as private actors, Utah’s electric vehicle charging infrastructure is quickly expanding. To further alternative fuel vehicle adoption, state and local governments should continue to explore opportunities to encourage private actors to deploy alternative fuel infrastructure for customers, tenants, employees and visitors.
Local governments might even consider adopting building codes that are “future-proof” with requirements for charging infrastructure. Ultimately, public and private sector stakeholders may need to mount public information campaigns to explain the growing availability of alternative fuel infrastructure and address other consumer fears.

The initial vehicle cost can be addressed through incentives, but at a cost. The top states for electric market share offer tax credits at a robust level. Colorado, for instance, offers a $5,000 credit.
With these incentives, “Go big or go home,” appears to be the order of the day. Smaller incentives don’t appear to have much effect, with consumer preferences being a much stronger force. For instance, Utah’s relatively small electric vehicle tax credit was not renewed in 2016 – yet electric vehicle market share has continued upward. Moreover, the 10 states with the highest market share growth in 2018 offer no incentives.
In the long run, market forces will move more consumers to embrace electric passenger vehicles, particularly as electric vehicles are expected to cost the same as their internal combustion counterparts by the mid-2020s. But if Utah wanted to quicken its embrace, it would likely have to make an investment in sizable credits. If it took that step, it might consider doing so on a short-term basis to limit the fiscal impacts and discourage fence-sitting. Utah Foundation found evidence that the looming threat of expiring tax credits may encourage short-term market uptake.
But cars are only part of the problem. Continuing to focus incentives on older heavy-duty fleet vehicles, as Utah has done in recent years, may offer a much larger payoff in terms of better air quality. Large fleet vehicles account for one-third to one-half of Utah’s vehicle emissions, even though they account for only 3% of the vehicle miles traveled. State and local governments can also do their part directly by retiring older public-service diesel fuel fleets.
In short, it’s clear that large tax incentives for alternative fuel vehicles work, but they’re costly. So maintaining an emphasis on public awareness, infrastructure and the worst-polluting vehicles is critical to a cost-effective approach. In both the public and private sectors there’s near unanimity across the Wasatch Front that air quality is a top issue. The coming years will tell whether all that talk will translate into significant acceleration of the steps needed to improve air quality – or if we’re just blowing smoke.

Peter Reichard

Peter Reichard is president of Utah Foundation, a non-partisan, nonprofit public policy research organization. Reach him at peter@utahfoundation.org, and find the report “Driving Toward a Cleaner Future” at utahfoundation.org.
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