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					Are Hybrids Really the Ride of the Future?




                                  Emilia Anderson
                                  EDGE Winter 2004
                                  Final Paper
                                  4/15/04
INTRODUCTION

          With so many Americans constantly moving in and out of new fad diets, health

clubs and beauty salons, it seems as if the growing trend in our country is to take better

care of ourselves and improve our health and quality of life. If this is the case, then there

is one crucial element that is being severely overlooked, and that is the state of our

environment, and the world we live in. One of the largest and fastest growing areas of

concern is how carelessly we pollute our air, and our consumption of oil that vastly

exceed that of other countries. Of all the pollutants that threaten the state of our

environment, the gases emitted from the automobiles that Americans drive everyday are

one of the biggest culprits. Although people are aware that serious consequences from

this careless pollution may lie down the road, and that oil and gas prices have spiked in

the recent months, it seem as if the American people aren’t ready to do something about

it if it means they have to alter an aspect of their life, especially changing the type of car

they drive. America loves to be the biggest and the best, and the types of cars we drive

are no exception.

          In the past few years though there has been an emergence of a new car on the

block—the hybrid car—and people question if this is where our auto industry is headed.

Their popularity has grown, and the future for these environmentally friendly cars looks

promising, but a technology is no good if people don’t embrace

it, and in this paper I hope to address what this trend it all about

and where it’s headed, whether Americans are willing to make

the change, and if hybrid vehicles really are the ride of the

future.




                                               2
THE KYOTO PROTOCOL

       The Kyoto Protocol is a very recent and important piece of legislative policy that

was proposed to require various countries to enact measures to preserve our world’s

environment. Negotiations on the Kyoto Protocol to the United Nations Framework

Convention on Climate Change (UNFCCC) were completed on December 11, 1997,

committing the involved industrialized and developing nations to specified, legally

binding reductions in emissions of six “greenhouse gases,” which include carbon dioxide,

hydroflurocarbons, perfluorocarbons, nitrous oxide, sulphur hexafluoride, and methane

(3). These gases have been growing in production by many countries over the last 100

years, and this is what the Protocol aimed to slow down. Responding to concerns that

human activities are increasing concentrations of these “greenhouse gases,” the

consensus was these activities were having a discernible impact on global climate

systems, possibly causing a warming of the Earth that could result in significant impacts

such as sea level rise, changes in weather patterns, and serious health effects (2). The

United States signed the Protocol on November 12, 1998, and the treaty committed the

United States to target reducing greenhouse gases by 7% below 1990 levels during a

“commitment period” that would run from 2008-2012 (3). By 2012, the countries

agreeing to the Protocol were to commit themselves to reducing collective emissions by

about 5%, which would be a very significant improvement.

       The Protocol was one of the first admittances of concern over the state of our

environment by these countries, and it was a sign that they were ready to start working

together to find new, more efficient energy sources, and cut down on the huge number of

pollutants being released into the air. This treaty was a very positive landmark step in the




                                             3
right direction, but unfortunately, the U.S. has been one country that recently hasn’t been

too eager to stick to its end of the bargain. One of the big influential factors in this

decision has been President George W. Bush and his Administration, and the fact that the

next Presidential election in on the horizon doesn’t bode well for our commitment to

Kyoto’s guidelines.

       Even when our country’s economy isn’t experiencing a recession, the economy is

always a central political and social issue to the Presidential race. Because of the poor

performance of the economy in the past few years, this issue looks to be an even bigger

focus for this next election, and one that clearly the two major candidates will focus

heavily on in order to gain public support (ultimately votes in this case) (1). With that

being said, this year it is likely that even though the environment is important to the

parties’ platforms, it will most likely take a back seat to the economical state of the

country. This is unfortunate though, because in order to keep the economy on the upward

trend, the Bush administration has decided that even though our American automobiles

are one of the largest air polluters, and heaviest gas guzzlers in the world, he can’t cut

back on the jobs and the money the economy would lose by forcing them to start

adhering to stricter standards. The auto industry is a huge in the United States, and Bush

feels that by following through with the Kyoto agreement, he would be crippling our auto

industries, and causing them to fall a step behind foreign companies (1). Contrary to our

government’s rigid outlook in this area, foreign auto companies have already started to do

more research and develop new technologies that would cut back on the damage they do

to the environment. Our U.S. auto industries are so concerned with social and high-profit




                                               4
economic desires, that they aren’t prepared to move in another direction and start mass-

developing cars that have better fuel efficiency, and lower emission levels.

        This attitude was reflected in Bush’s 2001 decision to turn his back on the Kyoto

Protocol, and not have the United States ratify the treaty. The decision came as a shock,

and many wondered how Bush could walk away from such an important policy when

clearly the environmental problems have not gone away. And even worse, other

countries such as Australia and Canada have used the United State’s backslide from the

treaty as an excuse to try to slide out of their obligations as citizens in a global warming

world (4). Much to blame for Bush’s decision was still the heavy pressure to keep the

                     economy strong, and please important financial players. As one

                     Greenpeace campaigner, Sue Connor, said, “The USA is the largest

                     greenhouse gas emitter in the world, yet Bush, with urging from his

                     fossil fuel backers such as Mobil, has turned his back on the Kyoto

Protocol,” (4). Bush argued that ratifying the treaty would have required the United

States to make severe cuts to the economy to meet a target that he wasn’t sure could be

met (2). Of course what he was more clearly concerned with was the figures that show it

might cost our economy up to $450 billion, and lost around 5 million jobs in our U.S.

market, which was something that neither he nor his re-election campaign would be able

to stomach.

        Bush’s decision was met with bitter criticism, and to try to smooth over some of

the backlash, he and his advisors developed their own environmental protection plan

called the Clear Skies Initiative, including a section called the Global Climate Change

plan.




                                              5
                               http://www.scoop.co.nz/mason/stories/PO0107/S00088.htm

       (Picture of Greenpeace supporter implying that Bush is “torching” the environment by rejecting the Kyoto
                                                      Protocol)


Here are some of the key points of the Bush Administrations new plan:

      The Clear Skies Initiative: Cuts power plant emissions of the three worst air pollutants --
       nitrogen oxides, sulfur dioxide, and mercury -- by 70 percent. The initiative will improve air
       quality using a proven, market-based approach, (1).


               Dramatically & Steadily Cuts Power Plant Emissions of Three of the Worst Air Pollutants:

                                Cuts sulfur dioxide (SO2) emissions by 73 percent, from current emissions
                                 of 11 million tons to a cap of 4.5 million tons in 2010, and 3 million tons in
                                 2018.
                                Cuts emissions of nitrogen oxides (NOx) by 67 percent, from current
                                 emissions of 5 million tons to a cap of 2.1 million tons in 2008, and to 1.7
                                 million tons in 2018.
                                Cuts mercury emissions by 69 percent -- the first-ever national cap on
                                 mercury emissions. Emissions will be cut from current emissions of 48 tons
                                 to a cap of 26 tons in 2010, and 15 tons in 2018.




                                                       6
                   Uses a Proven Market-Based Approach:

                               Protects Americans from respiratory and cardiovascular diseases by
                                dramatically reducing smog, acid rain, fine particles, regional haze, nitrogen
                                and mercury deposition.
                               Protects our wildlife, habitats and ecosystem health.
                               Cuts pollution further, faster, cheaper, and with more certainty, using a 'cap-
                                and trade' program, replacing a cycle of endless litigation with rapid and
                                certain improvements in air quality.
                               Saves as much as $1 billion annually in compliance costs that are passed
                                along to American consumers, and improves air quality and protects the
                                reliability and affordability of electricity.

         Global Climate Change: Commits America to an aggressive strategy to cut greenhouse gas
          intensity by 18% over the next 10 years. The initiative also supports vital climate change research
          and ensures that America's workers and citizens of the developing world are not unfairly
          penalized. The President's initiative puts America on a path to slow the growth of greenhouse gas
          emissions, and -- as the science justifies -- to stop, and then reverse that growth, (1)



          On paper it sounds like a grandiose plan that takes a real step in the right direction

to start reducing environmental damage, but underneath all the fancy wording, Bush’s

plan is very misleading and ineffective (4). In reality it is pretty clear that Bush is again

simply using his environmental clean-up plan to cover up his desires to continue to

protect wealthy oil companies and other big businesses that he has economical interests

in.

          Now it’s time to turn to the solutions, and the direction our country should be

taking in order to clean up our environment, and prevent further harmful damage. It’s

clear that the auto industry has heavy stakes in the gas guzzling cars that Americans

drive, but there possible hope on the horizon. The answer for now many scientists say is

the introduction of the hybrid vehicle (5). But the question then remains, are we as a

country ready to embrace this new type of car, and do we care enough about the

environment to forget about our image-centered ways that revolve around high powered,

stylish luxury sports utility vehicles (SUV’s) that continue to eat up the environment and

precious natural resources.


                                                      7
WHAT ARE HYBRID VEHICLES & HOW DO THEY WORK?

       With all the talk of automobiles being a large culprit in continuing environmental

damage such as global warming, the greenhouse effect, and the depletion of our oil

resources, some auto industries (mainly foreign ones at the moment) have started looking

for new technologies that could start to drive people in a new direction. The American

cars, SUVs, and other light trucks that a large part of the population drive, guzzle 9

million barrels of oil everyday, which is 40% of the total oil used in the U.S. on a daily

basis (6). And according to the U.S. government, that number is expected to grow to 12

million barrels a day by 2010 if the economy doesn’t improve (7). The fact that most of

the cars we drive also get extremely poor gas mileage only contributes to people having

to fill up their tanks with frightening regularity, without giving a second thought to how

much pollution they are sending into the atmosphere. As a country it is crucial that we

find a way to limit our oil usage, and find new technologies that make cars that are more

fuel efficient and that emit less harmful gases into the environment. One the major

breakthroughs has been the introduction of what we call hybrid vehicles, and although

environmentalists are hopeful that this new trend will catch on with the American people,

the big question remains are we capable of sacrificing our mentality of “bigger is better”

in order to stop the continuing damage to our environment.

       Any vehicle is hybrid when it combines two or more sources of power. In fact,

many people probably own, or have owned a hybrid vehicle such as a moped at some

point in time. The gasoline-electric hybrid car is a cross between a gasoline powered car

and an electric car, and is the type of car that we are starting to see more and more in the

auto market these days.




                                              8
HYBRID COMPONENETS

       Here is a brief description of the parts of a hybrid car, which hopefully will give a

better explanation of how they work:




                                          http://www.bath.ac.uk/~en1mpc/Hybrid%20Technology.htm

       1.   Internal Combustion Engine
       2.   Transmission
       3.   Electric Motor
       4.   Electronic ‘nervous system’
       5.   Fuel Tank
       6.   Battery Pack




      Gasoline engine—The hybrid car has a gasoline engine much like the ones that we have
       in our regular cars today. The difference is, the engine in a hybrid is smaller and uses
       advanced technologies to reduce emissions and increase fuel efficiency.

      Fuel tank—The fuel tank in a hybrid is the energy storage device for the gas engine.
       Gasoline has a much higher energy density than batteries do. For ex., it takes about 1,000
       pounds of batteries to store as much energy as 1 gallon of gas.

      Electric motor—The electric motor on a hybrid car is very sophisticated. Advanced
       electronics allow it to act as a motor as well as a generator. For ex., when it needs to, it
       can draw energy from the batteries to accelerate the car, but acting as a generator, it can
       slow the car down and return energy to the batteries.

      Generator—The generator is similar to an electric motor, but it acts only to produce
       electrical power.

      Batteries—The batteries in a hybrid are the energy storage device for the electric motor.
       Unlike the gasoline in the fuel tank, which can only power the gas engine, the electric
       motor on a hybrid car can put energy into the batteries as well as draw energy from them.

      Transmission—The transmission on a hybrid car performs the same basic function as the
       transmission on a conventional car. Some hybrids, like the Honda Insight (which I will



                                                            9
        talk about in more detail later), have conventional transmissions. Others, like the Toyota
        Prius, have radically different ones. (5)



   It seems like quite a complicated vehicle to produce, but these cars bring with them

huge benefits that are at the forefront of environmental discussions—reduced tailpipe

emissions, and improved gas-mileage. There are state emission standards that all cars

have to meet, that dictate how much of each type of pollution a car is allowed to emit.

The problem arises because the big SUVs that we are accustomed to driving burn around

twice as much gas to go a mile as a normal car does, and therefore generate about twice

as much pollution in the forms of carbon dioxide, and carbon monoxide, which scientists

suspect contributes heavily to global warming (5). Automakers in the U.S. have another

strong incentive to improve mileage. They are required by law to meet Corporate

Average Fuel Economy (CAFE) standards. The current standards require that the

average mileage of all new cars sold by an automaker should be 27.5 mpg. This would

mean that if an automaker sells one hybrid car that gets 60 mpg, it can then sell four, big

expensive luxury cars that only get 20 mpg (8). The United States imports 52% of its oil

(8), and by possibly raising these CAFE standards, not only will we be protecting our

environment, but it will also save consumers money, stimulate our economy, and create

jobs.



HYBRIDS COME ONTO THE SCENE

        The hybrid car is a compromise for these automakers, and it is an avenue that

more U.S. automakers should be exploring. In addition to reducing emission levels,

hybrid vehicles would also substantially decrease the U.S. dependence on foreign oil,



                                                10
which are two of the big problems with the typical gas powered cars on the U.S. market

today. We as a society are very consumed with quick acceleration, loud engines, and

more power all around, all of which make our cars much less efficient than they should

be. A bigger engine isn’t necessarily better, and hybrid vehicles are showing that they

can get the job done just as well. In a car with a smaller engine (such as a hybrid), the

efficiency can be improved by using smaller, lighter parts, by reducing the number of

cylinders and by operation the engine closer to its maximum load (5). Both a large and a

small engine have to output the same amount of power to drive the car, but the small

engine uses less power to drive itself (5). The key also comes in the fact that when the

smaller hybrid engine needs a little extra “help” going up a step hill, or getting the car

moving in a hurry, it gets that extra help from the electric motor and the battery which

step in to provide that extra boost of power.

        Most hybrid vehicles report getting on average 47-61 mpg, whereas the typical

SUV or big engine car get around 8-15 mpg which is a very significant difference (7).

Besides having a smaller, more efficient engine, today’s hybrids use a few other tricks to

increase efficiency as well. These include, recovering energy and storing it in a battery

(charging it while it slows down), being able to sometimes shut off its engine (when at a

red light for ex.), and using lightweight, aerodynamic materials and low rolling resistance

tires (5).

        A few of the most popular models on the market currently are the Toyota Prius,

Honda Civic Hybrid, and the Honda Insight, all priced around $20,000-$22,500 (9).

Over the past four years, more than 100,000 hybrids have been sold in the U.S., with

40,000 being sold in 2003 alone (10).




                                                11
Even though it may not seem like a huge

percentage of the more than 17 million new

cars and trucks that are sold in the U.S. each

year, the trends in sales seem to continue to

                                                                             Toyota Prius
                                                 http://www.motortrend.com/roadtests/alternative/112_031120_coy/

go upwards, and this will hopefully become enough of an incentive to get more

manufacturers on the hybrid bandwagon, particularly a few in the U.S. Sales are

continuing to rise, and analysts predict that the sales from this year could beat out the

numbers from the last four years combined (10). It’s understandable that the Bush

administration is concerned about the economy, but by not fully supporting the

advancement of these new technologies he’s allowing U.S. manufactures like GM, Ford

and Chrysler to continue to produce vehicles that are inefficient and harmful to our

environment, and ignore the changing trends that Japan and other foreign markets have

embraced.



THE ‘90’s: THE DECADE OF THE SUV

        Whether it’s the feeling of power, or just the “coolness” factor of driving a car

that’s the biggest on the road, the American Family has become synonymous with the

SUV. Despite the constant criticisms by political and environmental figures, the high gas

prices, and the sluggish gas mileage, SUV’s are still flying off manufacture’s lots in

record numbers. According to year-end sales figures, 1 out of every 4 cars bought in the

U.S. this past year were SUVs, and in California alone, SUV sales were up about 8%

(11). Bob Kurilko, an analyst at an automotive research company in Santa Monica said,




                                                12
“It all comes down to product. People like a lot of things about SUVs—the high ride

position, the versatility, the room for people and stuff, the ease of entry and egress, and

the coolness factor,” (12). But what is even scarier is

that most of the vehicles that companies produce now

are considered light trucks because of engine size and

gas consumption. The image that the                                        BMW X5

                                                          http://www.automotive.com/bmw/11/x5/index.html
media portrays SUVs with is very deceptive to the consumer as well. In almost every ad

they show SUVs traversing mountains and rumbling through forests and lakes, promoting

an almost “return to nature” sort of feeling, when in actuality, only 5% of SUVs are used

for off-road purposes (13), and these behemoth automobiles are the very things that are

harming much of our environment.

       Anyone who owns a SUV knows they get terrible gas mileage, and are probably

somewhat aware that their cars are harmful to the environment, but the bottom line is,

                     Americans don’t seem to care. We have convinced ourselves that it

                     is better to be driving a bigger, more powerful, and supposedly

                     “safer” car, but the truth is, it seems to be more a product of our

                     mentality that bigger is better, and it doesn’t look as if the American

people are willing to take a blow to their images by driving a smaller, “not-as-cool

looking” hybrid car (10). Despite the economic and national security risks from our

country’s dependence on foreign oil, consumers show scant interest in conserving fuel or

protecting our air. From a security standpoint, because currently a quarter of imports

come from the Persian Gulf nations, this disinterest in conservation only increases our

reliance on oil from unstable and hostile nations. Even with the war in Iraq and a



                                             13
temporary spike in gas prices, consumers bought nearly 9,000 more full-sized Ford

Expeditions (19 mpg on highway) than the mid-sized Ford Escapes (28 mpg) in the first

half of 2003, (20). The public’s indifference to fuel economy helps explain the explosive

growth of SUVs in this past decade, surging 312%, while the sales of cars, which average

40% better gas mileage, fell 10% (20). One reason for this seems to be that from the

consumer’s perspective, improved fuel economy has too small a payoff to sacrifice

versatility, roominess and safety. Even if Ford doubled the Expedition’s gas mileage, the

average driver would save just $33 a month, based on $1.50 a gallon gas prices (typical

for today), which isn’t enough to make people give up their big cars they have become

accustomed to driving.

       The hard truth is people fail to see the truth behind the big SUV sitting in their

driveway. If Americans are at all concerned about the poor quality of the air we breathe,

global climate change, rising sea levels, and all the other things exacerbated by

greenhouse gases, it might be time to start looking at the larger role SUVs play in the

matter (8). Here are some interesting, yet starting facts that might make people think

twice when they step up into the driver’s seat of their gas guzzling ride.



               For each gallon of gasoline used by a vehicle, 20-28
                lbs of CO2 is released into the environment—
                considering most SUV’s get between 8-15 mpg, this is
                a lot of carbon dioxide

               CO2 emissions from vehicles are responsible for 20%
                of the total amount of CO2 released into the atmosphere

               The Sierra Club calculates that driving an SUV for one year is equivalent to the
                energy wasted by leaving your refrigerator door open for six years, keeping a
                light on in your house for 30 years, and leaving your TV on for 28 years.

               Almost ½ the cars sold today are considered light trucks



                                              14
               If current rates of fuel consumption continue, the entire world’s gas reserves will
                be fully depleted by 2040. (8)


On top of all this, SUVs have proven not to be the incredibly safe vehicles people once

thought they were, and they are constantly at the center of complaints from other drivers

on the road that don’t have them. It seems that with knowledge of this information,

people would get rid of their SUVs in a heartbeat, but they are still being purchased and

driven in record numbers.

       Even with the recent popularity of hybrid vehicles, the introduction of new

models close on the horizon, and the startling truths about the harm

that SUV’s do to the environment we live in, the question still

remains whether we as a nation are at all ready to make the switch to

become more environmentally conscious? Can we and give up

flashiness for function for the well-being of our Earth? It’s true that these

environmentally friendly hybrid cars are beginning to attract U.S. attention, but despite

this, J.D. Power and others do not see hybrids accounting for more than 2% of the overall

U.S. automotive market by 2008 (10). John Maples, an analyst for the U.S. Energy

Department’s Energy Information Agency agreed when he said, “I don’t think the market

is ready in this country,” (10). The reality of it all is that the 1990’s was the decade of the

SUV, and there doesn’t seem to be much to indicate that this will change dramatically

anytime soon. The SUV market accounted for 7% of the overall U.S. automotive market

in 1990, with its share expanding to 22.6% in 2002, the biggest for any vehicle category,

according to J.D. Power (10). As Sarah Jain, an assistant professor of cultural

anthropology at Stanford put it, “SUVs are fun to drive, they make you feel powerful,”



                                               15
(10). Americans’ penchant for powerful, large, off-road type vehicles is acute, and the

popularity of GM’s Hummer symbolizes this quite well. Despite its base price of

$49,190 and measly 8 mpg, the 2.9 ton SUV, modeled after a

Humvee used in combat by the military, won iconic status in the

U.S., generating sales of 32,000 units in 2003 (10). “The Hummer

is the ultimate luxury SUV that combines our fantasies about war

and adventure with our desires for personal comfort and luxury,” Jain said, (10). To be

successful with image-conscious Americans, automakers must challenge the notion that

green equals weak, and this is the category that hybrid vehicles still fall into at this point.

        The expansion of hybrid vehicle market in the U.S. also faces other hurdles as

well. One of these is the low price of gas in the U.S. in comparison to other countries,

which makes it difficult for consumers to be conscious about fuel-efficiency (10). With

gas costing roughly $0.40 per liter, U.S. consumers can more readily afford luxury SUVs,

and most feel that fuel prices are going to have to be significantly higher for hybrids to be

economical.

        Currently hybrid advancements are on the rise, and newer models are being

produced all the time, but unfortunately this doesn’t mean that this trend will truly catch

on anytime soon in the U.S. As I have shown above, there are still many obstacles that

stand in the way of hybrid vehicles making a true breakthrough in the U.S. market, and

because of these, we still seem far away from making a significant step towards cleaning

up our environment.




                                              16
BAD NEWS FOR ENVIRONMENTALISTS: A HUMMER OF A TAX BREAK

       One reason the U.S. government provides tax credits is to promote consumer

behavior that benefits the greater good. While some tax credits do just that, others

demonstrate a failure to have our national priorities straight.

Under current tax policy, the U.S. government grants massive

tax breaks to small business owners that purchase SUVs for

their work, and this break has just gotten a whole lot bigger,

increasing from $25,000 to $100,000, (15). The original intent of the provision was to

increase capital investments by farmers and other small business owners who rely on

light-trucks or cans for their work. The trouble is, when this provision was added to the

tax code in 1996, luxury passenger SUVs were not the market force they have become,

and over time it has developed into a loophole—a loophole big enough to drive a 6,000-

pound SUV through. This problem unfortunately has arisen partially because the tax

code classifies vehicles by weight instead of function, so any vehicle weighing over

6,000 pounds fully loaded qualifies for this credit. Additionally, because of the growth of

the market for large, luxury SUVs, it has dramatically expanded the number of what are

essentially passenger vehicles.

       With passage of the Jobs and Growth Act, which is part of President Bush’s

economic stimulus plan, Congress more than tripled the amount of the tax credit in an

attempt to increase business spending to help jump-start the economy. In doing so

though, the bill has created a huge loophole that many people are taking advantage of,

which basically makes the purchase of at least 55 large SUVs, passenger vans and

trucks—all priced under $100,000—completely deductible after the first year (16). As in




                                             17
the case of small business owner Karl Wizinsky, when his accountant told him about the

credit, it was enough to encourage Wizinsky to trade in his Mercury Marquis for a Ford

Excursion. “It sounded too good to be true,” said Wizinsky, a health care consultant in

Novi, Michigan. “But it was true. So I bought the SUV. For a small company like mine,

it’s a significant credit,” (7). He went on to say “It doesn’t hurt to have a larger vehicle,

but I wouldn’t say it’s a requirement of my business,” (7). This

is just one example of how people are using this loophole to their

advantage when really a smaller car would do the job just fine.

Meanwhile, legislation that offers a much smaller tax break—a $4,000 tax deduction—to

those who purchase fuel-efficient hybrid cars is on track to be reduced by 25% each year,

and eventually phased out (17). And even though the hybrid tax cut applies to everyone

that purchases a hybrid vehicle, not just small business owners, the start contrast between

the two amounts has environmentalists crying foul. Congress is considering legislation

that would extend the tax deduction to encourage consumers to buy hybrid cars, but it is

currently stalled in Congress, and is in danger of being completely eliminated.

       Although the tax credit makes rational sense for those it was intended to help, it

doesn’t make sense that taxpayers dollars are going towards buying bigger and bigger

vehicles, when instead the government should be encouraging people and small business

owners to buy fuel efficient cars (7). Its is also clear that many self employed people,

like Karl Wizinsky, that are taking advantage of the tax credit don’t actually need the

large vehicles but are simply enticed by the hefty financial return. “Some SUV and

Hummer dealerships are even touting the credit to increase sales,” says David Friedman,

a senior analyst with the Union of Concerned Scientists (7), and according to the




                                              18
Washington watchdog group, Taxpayers for Common Sense, about 100,000 owners of

3.6 million large SUVs sold last year claimed the credit.

       While the tax credit does appear to accomplish its goal of encouraging more

business spending, at the same time it clearly contradicts other national goals, such as

improving vehicle fuel efficiency, reducing U.S. dependence on foreign oil, and cutting

greenhouse gases. It seems outrageous that while tax credits for purchases a fuel efficient

hybrid vehicle are in a congressional traffic jam, the Bush Administration gave the green

light to enormous tax deductions for the least fuel efficient and most polluting vehicles.



Here is some key opposition to the new SUV tax break legislation:

                Business owners are likely to seek out bigger SUVs instead of cars even if a
                 car is more appropriate, simply because it doesn’t qualify for the tax break

                As mentioned in previous sections, Americans are already buying SUVs in
                 record numbers, so there doesn’t seem to be a national need to subsidize sales
                 of these vehicles?

                Some consumers will feel that the deal is too good to pass up, even if they
                 weren’t intending to buy an SUV in the first place

                The tax break was intended for farmers and small outdoor oriented professions,
                 but now lawyers, real estate agents, and many other professionals that don’t
                 really need an SUV are purchasing them

                The tax break only applies to the largest and least fuel-efficient category of
                 SUVs

                The law seems counter to national goals of improving vehicle fuel efficiency to
                 reduce U.S. dependence on foreign oil and cut greenhouse gases

                Those who are attempting to do their part in saving the environment by
                 purchasing hybrid vehicles only qualify for a tax break of a few thousand
                 dollars

                It seems crazy that a bill proposing to extend bigger tax breaks to
                 environmentally friendly vehicles is stalled in Congress, while the bill for the
                 SUVs flew right through




                                               19
                This tax credit is one that basically only benefits the rich (the typical small
                 business owner taking advantage of this break has annual income of around
                 $200,000)

                This SUV tax loophole is costing the federal government $1 billion for every
                 100,000 vehicles businesses buy

                There are attempts going on now to shrink the SUV tax break, but there’s no
                 promise that it will go into effect anytime soon (17)


       Like many tax breaks, this one started with good intentions—helping family

farmers and businesses to purchase necessary equipment, and this aspect of the provision

should be maintained. However, with the rapidly expanding SUV market, the tax

exemption has become a misguided incentive for people to buy much larger and more

environmentally unfriendly vehicles than they need.



CAFE

       It is fair for the Bush Administration to be concerned about the economy,

especially, as I mentioned above, with the next Presidential election approaching fast.

But contrary to Bush’s objectives with his Economic Stimulus Plans, there are alternative

measures that could be taken to achieve the same economic goals without putting the

environment on the line. In fact, by raising Corporate Average Fuel Economy (CAFE)

standards, the U.S. can not only save consumers money, stimulate the economy and

create jobs, but by raising the standards, we will also be protecting the environment,

which clearly Bush’s plans do not consider.

       CAFE standards already save consumers money at the gas pump. Because fuel

economy for cars doubled between 1975 and the late 1980’s, a new car purchases saves

thousands of dollars at the gas pump over the lifetime of the car. Raising the standards



                                               20
even more and increasing the gas mileage of a Ford Explorer from 19 to 34 mpg would

cost only $935 in technology, but would save the owner $790 each year on gas. Raising

CAFE standards for new cars, SUVs and other light trucks to 40 mpg over the next 10

years will save consumers $16 billion annually by 2012 (6). Consumers would then

                        potentially then spend this money at home, rather than sending it

                        overseas to oil producing nations, thus stimulating our economy,

                        improving wages, and creating jobs. A 1997 report by the

American Council for an Energy Efficient Economy concluded that raising CAFE

standards would translate into a net increase of 244,000 jobs nationwide, with 47,000 of

these in the auto industry.

       On top of these economical benefits, raising CAFE standards would also help to

protect the environment from further damage. Raising the standards to 40 mpg would

start to curb global warming that is caused by the emittance of carbon dioxide from our

cars and trucks.



A POSSIBLE COMPROMISE: HYBRID SUVS?

       The SUV is still the vehicle of choice for most Americans, but as hybrid

technologies become more prevalent and the pressure to make the change to hybrid

technology for economical and environmental reasons starts to increase,

U.S. automakers have come up with a compromise that will continue to bring them

profitable sales of SUVs, but also do a little more to protect our environment. The

answer: Hybrid SUVs. The question: Is this really the answer?




                                            21
       Automakers are now trying to challenge the most lucrative U.S. auto market

segment by introducing hybrid versions of SUVs and pick-up trucks. It seems like a

logical solution. If people still demand bigger and more adventurous looking cars, and

environmental standards keep getting higher, than why not try to give consumers the best

                        of both worlds. It also seems like this could finally be the

                        advancement that causes the hybrid to “take off” in the U.S. and

finally push us in the right direction environmentally. Unfortunately, this solution still

holds many problems that will still make the American consumer question whether it’s

worth it to go hybrid, even if they can get it in a hefty SUV model. In 2004, companies

like Toyota, Ford and General Motors all plan to roll out hybrid versions of their popular

truck and SUV models, but it still remains to be seen whether they will

sell as well as their gas-powered counterparts. Pricing on these new, bigger hybrids has

yet to be announced, but as the current models have shown, hybrids tend to cost

thousands of dollars more than their gas-powered counterparts, and skeptics are still

asking the essential question: Are they worth the extra money enough that people will

buy them? (18). Automakers argue that hybrids hold much promise because they save

consumers money at the pump, but with gas currently selling at less than $2.00/gallon, a

lot of people question whether it’s worth the extra $3,000 to $7,000 to buy one.

Executive director of global forecasting for J.D. Power and Associates Walter McManus

said, “The fuel savings are not worth the up-front cost (to purchase one). You’d have to

drive the vehicle for 20 years for it to pay itself off,” (18). Obviously the trick to getting

hybrid costs down is to sell more of them, which so far sales have been slow, with only

about 300,000 hybrids having been built. One of the big downsides to this compromise is




                                              22
the fact that auto makers are taking a risk that buyers might be disappointed by the new

hybrids because the gas-electric versions of their beloved SUVs aren’t likely to provide

the eye popping fuel economy that has attracted buyers’ attention to hybrid models in the

first place. On top of that, these companies still have the heavy task of luring away

consumers from conventional SUVs and pickups by playing up hybrids ability to still

offer the adventure, fame and power so cherished by Americans (18). To boost the

hybrids’ appeal, auto makers are making these upcoming versions bigger, more rugged,

and more powerful, but compromising on the technology’s original selling point: fuel

economy (19), and it will be interesting to see if consumers are still interested once they

learn that.

        Whether these hybrid SUVs take off in America is really a matter of whether

there is a market for them, and right now that doesn’t seem to be the case, so it will be

interesting to see how successful this move proves to be.



CONCLUSION

        As it looks now, hybrids seem like the technology of the future, but in the present,

Americans still appear to be too unwilling to give up style and flash for the future of our

environment, something that is ultimately much more important. In our fast paced

culture, we as consumers aren’t seeing the immediate benefits of hybrids, so we are

reluctant to make the switch. Gas prices are still too low at the moment to worry people

enough, and most of the Americans that are driving these huge gas-guzzling luxury SUVs

are wealthy enough that they don’t care if they spend a few extra $1,000 on gas every

year. It’s hard to say what will have to happen to finally open people’s eyes, but when




                                             23
you compare it to what it took for us to strengthen national security measures, it appears

that it might have to be a very tragic event. As a country we had been lax on airport

security and didn’t always take terrorists threats seriously, and it took a devastating blow

like 9/11 to make us see what can really happen, and start to take things seriously.

Hopefully our country won’t tread down the same path with respect to our environmental

issues, but it would be nice if as a country we could stop the bleeding before it gets out of

control, and not always put off until tomorrow what we can start to prevent and fix today.




                                             24
                                         WORKS CITED
1    www.whitehouse.gov


2    http://unfccc.int/resource/docs/convkp/kpeng.html


3    http://www.ncseonline.org/NLE/CRSreports/Climate/clim3.cfm?&CFID=12962635&CFTOKEN=68432086


4    http://www.scoop.co.nz/mason/stories/PO0107/S00088.htm


5    http://auto.howstuffworks.com/hybrid-car.htm/printable


6    http://www.protectingcreation.org/driven/FactSheet.asp


7    http://abcnews.go.com/sections/scitech/Business/hybrid_suv_tax0301001.html


8    http://environment.about.com/cs/globalwarming/a/SUV.htm


9    http://honda.com


10   http://www.climateark.org/articles/reader.asp?linkid=28831


11   http://www4.fosters.com/autos/articles_2004/auto_0213_04b.asp


12   http://www.mercurynews.com/mld/mercurynews/business/5127734.htm


13   http://www.ku.com/5218pdf/521808-09.pdf


14   http://www.usatoday.com/news/opinion/editorials/2003-07-21-edit_x.htm


15   http://www.globalexchange.org/campaigns/oil/1159.html


16   http://www.taxpayer.net/TCS/whitepapers/SUVtaxcredit.pdf


17   http://4wheeldrive.about.com/cs/drivingtipssafety/a/aa041603a_4.htm


18   http://www.freep.com/money/autonews/hybrid5_20040105.htm


19   http://www.ucsusa.org/clean_vehicles/advanced_vehicles/page.cfm?pageID=860


20   http://usatoday.com/news/opinion/editorials/2003-07-21-edit_x.htm



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                                                   PICTURES

http://clipart.com/en/index (all cartoon clip-art pictures are from this site)

http://ford.com/en/default.htm

http://www.toyota.com/index2.html

(some of the other pictures are cited right below the image)




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