How Prius drivers are gross polluters and other lessons of carbon credits

Submitted by brad on Sun, 2005-12-04 20:46
Topic: 
Politics
Transportation
Going Green

I've been thinking more about environmental economics since I blogged about retail carbon credits. I was surprised about how cheap (some would say unrealisticly cheap) wholesale credits are -- about $2.20 per tonne of CO2. (Update: This price keeps changing. The U.S. price is clearly out of whack down to just 25 cents per tonne in 2009. The European price has declined too, from $20/tonne when I wrote this to $14/tonne in fall 2009.)

Today, many of my friends have bought a car like the Toyota Prius, feeling they are doing their bit to help the environment by burning less gas. The Prius costs around $3,000-$6,000 more than a comparable old-style engine car (in part because high demand keeps the price high), and the savings on gasoline don't justify it on a financial basis unless you do nothing but drive all day. So the main reason to buy it is to help the environment and to make a statement before your peer group. The Camry Hybrid, which gets 32mpg instead of 23mpg costs about $5,000 more than the regular Camry.)

Problem is, there's an argument that you're hurting the environment, counterintuitive as that sounds. And no, it's not just the unanswered questions about recycling the fancy batteries in the Prius when they fade, where fairly positive results have been returned so far. Read on...

The Prius gets about 44 "real" mpg, not nearly as much better than the similar Corolla or Camry models as EPA figures suggest. Consumer's Union suggests a typical driver will save 176 gallons/year over a Corolla and 284 over a Camry. As the Prius-style non-hybrid is in between, call it 200 gallons or $450/year -- $2800 present value over the predicted 8 year life of the battery. Not enough to cover the added cost of a Hybrid today (in part because high demand for Hybrids makes them more expensive) but it is nice to get. (Update: This number keeps changing with the price of gas. When it hit $4 the Prius was a win on saved gas, at $3 it's a win but lesser.)

But what if you didn't buy it and put the saved money into carbon credits? Well, you could offset 681 tonnes of CO2 with $1500 at the cheap 2005 U.S. price. That's 77,000 gallons of gasoline!.

Yup. Buy buying the more expensive Prius rather than buying a cheaper similar car and putting the savings into carbon credits, it's like burning 77,000 gallons of gas. That's like driving an 10mpg Hummer 770,000 miles -- around the world 30 times. Or like taking 10 Camrys that drive 20,000 miles/year off the road for the 8 year life of the Prius. At the European cost, which is more (I've seen quotes ranging from $11 to $25) it's not so bad, $1500 buys only 136 tonnes, or 15,000 gallons of gasoline -- only 6 trips around the world in the Hummer. At $25 it's a more modest 6800 gallons offset by $1500 and only 2.7 circumnavigations.)

Ok, so this is just greenhouse gas and not the other pollutants, so we'll need to do a bit more work on the numbers.

You might not believe in carbon credits. But you can also do something more direct, namely put the money into subsidizing other clean sources like wind and solar, especially thermo-solar rather than PV. However, they still pale in comparison to the pollution credits.

The interesting thing is that I expect that even if everybody did accept the validity of these numbers (and even I agree there are many factors to consider in getting the right number) I doubt people would line up to buy cheaper cars and put the savings into pollution credits, while they are lining up to pay more for a hybrid. The hybrid gives you a good feeling and something to show off. People have always wanted to show off their tastes with their car choice. The hybrid reminds you each day that you did something, in a very physical way, the credits are too abstract for most. Our brains seem to be wired that way.

Speaking of solar, people often desire to put up solar panels on their roof for clean electricity. Some fool themselves, by ignoring everything they learned about mortgage math, into thinking that solar panels can pay for themselves. They can't yet, though perhaps someday they will. You can generally take the money you would have spent in the solar equipment, and put it in other investments and get back more than the panels save in electricity bills. Plus, while the panels sit there losing money, they also depreciate as they age. Nobody would normally buy an investment that returns 4% and where the principal depreciates to nothing over time.

However, it gets worse if you imagine what you could do putting the spare money into pollution credits. A 5kw solar system will cost about $20,000 even with the huge rebates offered in some areas. Buy $20K worth of carbon credits, and you could offset the greenhouse gas emissions not just of your own home but many more. $20K means 9000 tonnes, which translates into roughly 9 gigawatt-hours generated from coal, oil, gas and hydro mix. Your house probably uses 8 megawatt-hours in a year. That means you could offset the electricity usage of 80 similar houses over the 30 year life of the panels. (Assuming 6% interest and the price of credits remaining the same.)

How can this be?

How can making these well meaning choices be so bad for the environment, compared to the choice of buying carbon credits, which is to say bribing existing polluters to cut back their output?

The answer, right now, is that it's far easier and cheaper to reduce pollution by cutting output at the big polluting factories and power plants. A dollar spent there does an order of magnitude more to cut pollution than a dollar spent on personal PV panels or a personal hybrid car.

We feel better about doing it personally, but we're doing the wrong thing for the planet. At least for now. Over time, if the system catches on, the carbon credits will get more expensive. As the existing big polluters get more and more efficient due to laws and credits, it will be harder to squeeze more efficiency out of them, and it might begin to make sense to put our dollars into improving the efficiency of our own lives.

A working credit system (and I'm not ready to make the final claim that we have one) creates a market that focuses the money on the places where you can get the most bang for your buck in pollution reduction. A working credit system means you don't work on your own house because you can spend the money getting somebody else's far less efficient house in order first. Sometimes people justify their own solar panels or Prius by saying that they want to do something, and they can't do anything about the big power plant. But with a credit system that's exactly what they can, and should do -- until the markets change and it makes sense to spend money on your own car.

Now, there are some counter arguments to the above thesis, though not at today's margins. For one, while the custom parts of hybrid cars cost lots today, if the demand for them remains strong, the manufacturers will figure how to make them for less. Once the fuel efficient car costs the same as the guzzler (or even the same after gas savings are factored in) it is an obvious win.

Likewise, increasing demand, even if artificial, for PV solar and wind, can also drive the cost of these low enough that they make sense. Some argue that thermo-solar is already economical and some trial projects are underway in California. Perhaps, an argument goes, we should push these currently inefficient ways to reduce pollution in order to make them become economical in the future. Or, it could be argued, this should be the role of the government.

This debate will continue, and over time we'll see various technologies get cheaper, and will probably see the cost of fossil fuels go up, all of which changes the equation. We may also see better economies in pollution reduction for big plants, which tips things in that direction. A proper pollution credit market automatically moves the money to the place where it can do the most good.

NOTE: Some figures in this posting have been modified since the original form, making the first comment seem out of context. That's not the fault of the commenter.

Counter-arguments

In addition, let me sum up what I think are the best counter arguments, some of which come from commenters below.

  • U.S. $2.20/tonne carbon credits are artificially low in price, because the U.S. has not signed Kyoto and there is not legal power behind enforcing them. Some suspect the sellers of U.S. carbon credits may be cheating and not getting caught by the CCX enforcement systems. Though presuming that's not true one should perhaps buy them while they are cheap, though this might not be sustained. European market prices are higher. Wind power based Green Tags are about $30/tonne.
  • Even if they accept the logic that carbon credits are a better way to help the environment than expensive hybrids or solar panels, people get only an abstract good feeling from the credits. A hybrid car reminds you every day of what you're doing to cut gasoline usage. Because this makes people feel good, it's better "marketing." A poorer choice that people actually are willing to do can be arguably better than a mathematically better choice they would never do. People also feel better making a personal difference compared to paying somebody else to make a larger, impersonal difference.
  • For similar psychological reasons, some people can't mentally accept pollution credit trading, even if they rationally accept it is reducing emissions. As such they would never accept this approach. (Some go even further and argue that credit trading is not a good way to reduce pollution.)
  • Some feel hybrids are already cost effective just on savings at the gas pump, or if not, they soon will be, so there is no choice because there is no "extra money." Many Prius owners also love the non-gas-saving attributes of the car, though of course those could and probably will appear in other cars if they are popular.
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Comments

Felix Kramer

Mon, 2005-12-05 11:04

I'm glad you wrote abut this since it's a subject lots of people talk about. At CalCars.org, we're focused on plug-in hybrids, where the carbon benefits are far better, but the case can be made well for hybrids. I've asked Joe Romm, former official in the US Dept of Energy, author of The Hype About Hydrogen to respond, and he's done so at length. [I've added a few comments of my own in brackets.]

Every aspect of this analysis is flawed or misleading. I hardly know where to start, so I apologize if the narrative is not polished. Hopefully these mistakes won't get repeated around the Internet for years to come by those who oppose hybrids.

First we have the classic apples vs. oranges analytical mistake. He seems to be comparing the Prius ACTUAL mpg with Corolla/Camry EPA mpg. Whoa! Stop right there. Neither the Corolla nor Camry get the EPA rating. No car does. Yes, it is true that the Prius has a larger absolute mpg drop from EPA to reality, but that is because it starts from a larger baseline. MPG is not linear with gasoline consumption of CO2 emissions, which is what we care about (i.e. a 10% mpg drop for a 20 mpg costs the planet over twice the gasoline per 1000 miles driven than a 10% mpg drop for a 50 mpg car. (You or he can do the math if you want to convince yourself of that statement.)

Second, let's actually do the numbers. Dave Hermannce [top engineer at Toyota's hybrid program] has done the specific case. Let me run through them. For the actual mpg, Dave uses Consumer Union's real-world testing (which I actually think overly penalizes the hybrid). The Prius saves 196 gallons per year over the Corolla if we go by EPA and 176 if we go by CU. The Prius saves 283 gallons per year over the Camry if we go by EPA and 284 (!) if we go by CU.

(As an aside, if you do the math at $2.50 a gallon, the Prius pays for itself over the lifetime of the vehicle, assuming people even buy technologies like hybrids on the basis of their payback, which, as you know, is an absurd argument. Do leather seats pay for themselves? Does XM satellite radio? And so far the Prius does NOT depreciate! Plus there is the time I save not going to the gasoline station--probably worth $500+/year to me. The Prius is midway between a Corolla and a Camry in terms of roominess and trunk space, although owning one, I view it as a vastly superior to either technologically. You couldn't pay me to buy either one.) [I addressed some of the issues about straight payback at my blog, Power, Plugs and People. Since then, I've realized that NONE of the discussions on this subject include the point Joe raised: depreciation. The trade-in value of even the earlier generation Prius is astounding. And these #s get even better if you factor in what now is up to a $3,400 tax credit, not a deduction, for buying a hybrid. The number eligible for the deduction has been capped, but hopefully will increase.]

Third, the direct CO2 emissions of burning a gallon of gasoline is 20 pounds, but that also releases about 5 pounds of C02 upstream (refining, etc), so 25 pounds is a good number to use. Over a 10 year period, the Prius saves 20 metric tones of CO2 compared to the Corolla and 30 metric tons of CO2 compared to the Camry.

(As an aside, CU gave the Prius 44 mpg actual overall. Brad says 42. I have owned the 2004 Prius for 2 years in Washington, DC, which is an intermediate climate. I don't see how you can get only 42, unless you have a real lead foot or live in the coldest 25% of the U.S. Plus, as you know, if you live in California and/or you drive the car to optimize mileage, you can easily get 48 or more, so the numbers here are quite conservative.) [After 30,000 miles, I'm around 50MPG in the SF Bay Area, and many people I know are in the mid-50s.]

Fourth, what is the right value to use for carbon dioxide? Clearly we want to use a realistic value that in some sense reflects its true cost, not what its cost might be in a very immature, non-liquid market. After all, many people are buying the Prius precisely because they care about the environment more than the U.S. government. The U.S. does not have a serious carbon market, which is one reason why prices are so low here. Until you have a cap, reductions in one place do not necessarily mean reductions nationwide. Why should I pay to plant trees in New York if someone else is cutting down trees in Oregon? Europe has a serious market, will have a genuine cap in 2008, and the price is about $90 a ton of carbon ($25/ton of CO2). Anyone doing carbon costing analysis should probably use this figure. As an aside, when people realize just how serious things really are on climate, (when the reality finally trumps the brilliant disinformation campaign), which I figure will happen around 2020, the price will probably go much higher.

So the CO2 savings add another $500 to $800 to the "value" of the Prius. I would also add that many people, including me, believe that the pump price of gasoline does not reflect its true cost to our society even not counting global warming (the military cost, the trade deficit, other environmental costs, depleting a non-renewable resource, etc). The fact that the most other rich countries in the world have considerably higher prices for gasoline supports this view. A responsible consumer is entirely justified in taking this perspective and thus finding the Prius to be vastly more cost-effective than my analysis shows. (One way of monetizing this is to consider the Prius as a hedge against gasoline prices rising substantially.) BTW, my Prius replaced a Saturn, so I achieved considerably higher GHG savings.

(As an aside, the transportation sector has for two decades now been the sector that has seen the fastest growth in greenhouse gas emissions in the US economy. From a policy perspective, it has proven that the most intractable in terms of reducing greenhouse gas reductions. So buying a "cheaper" car than the Prius and using that money to purchase emissions reductions in other sectors does not offer a long-term solution to our problems. We MUST reduce greenhouse gas emissions in the transportation sector by 50% compared to 2000 levels if we hurt to have even the slightest prayer of avoiding catastrophic greenhouse gas emissions. The two phase transition to hybrids and then plug-in hybrids is far and away the best strategy to achieve this, as you know. Yet another reason to buy a good hybrid.)

The bottom line as far as the Prius goes is that if somebody really cares about global warming or about funding both sides of the war on terror (!) through wasteful use of gasoline, but they need to buy a car, then you just can't beat the Prius. No ifs, and, or buts about it. I'd be happy to debate that with anybody.

Fifth, I don't agree with most of Brad's perspective in the second half of his post. I own a photovoltaic system. It won't pay for itself because I live in DC where there is no subsidy for purchase, although we wrapped it in to the mortgages so it comes pretty close (in CA, with the subsidy, the high peak price, and put in the mortgage, it definitly pays for itself from the start). But I care about the environment. It would be more cost-effective to purchase green tags or something like them. I might do so. But I would never in a million years buy US CO2 credits. They are mostly real cheap stuff that would probably happen anyway, particularly once we get serious about global warming. There has been a huge discussion in the environmental community about this subject. I have spent many years on this matter, and advise lots of companies on this, as I'm sure you know. $2.20 a tonne of CO2 gets you nothing of value. We usually recommend that companies seeking to improve their environmental performance start with what is cost effective in their company, then buy green tags or RECs, and don't speen too much time or money in the US CO2 market. Once the company has substantially improved its environmental performance, buying very high-quality credits (which typically cost more than $2.20) is certainly something they can consider. But again, the price in Europe tells you what the real cost of CO2 is.

If Brad were serious about cost-effective strategies to reduce greenhouse gas emissions, then he would urge people to focus first NOT on subsidizing industry to make cost-effective investments, but to focus on their own inefficient use of energy (they should wrap their water heaters, buy Energy Star Equipments, etc.) [And of course, Joe and I hope Brad will agree we should all get involved in one or more of the many organizations locally, nationallly or worldwide that are working on global warming. For my own perspective and links to what I've found are the most persuasive sources, see CalCars and Global Warming: A Personal Evolution]

I do agree that the single most important thing the US government should do is establish a carbon dioxide cap and trade system. Then the marketplace will determine what the most cost-effective greenhouse gas reduction strategies are. BUT most likely it will be a wimpy cap to start with, based on the legislation that is currently being tossed around Congress, so individuals may still want to take stronger action (note that Governor Schwarzenegger has called for an 80% reduction by 2050, which implies a very high price for carbon dioxide). Certainly, until that happens, anybody who cares about the environment or oil imports is more than justified in purchasing a Prius.

Anonymous

Mon, 2006-02-20 17:35

So glad you wrote your very informed rebuttal to the argument discounting the Prius. We had a 2002 and now have a 2004, and we love it. I also agree that the mileage numbers that have been cited are very low given our experience. We live in the NW with mountainous terrain. I drive about 17 miles one way to work in a mix of driving situations - country roads, freeway, and city driving. We have a moderate maritime climate, but do find that our mileage drops to about 47-49 in the colder weather and moves steadily up to 55-58mpg in the quiet sound are additional advantages to all those you stated. Besides all that they are great, dependable, and fun.

Carl P

Mon, 2005-12-05 13:24

I have little to Joe's excellent point, but one observation.

There are many "Moore's Laws" in technology, which you can learn about if you read Kurzweil's book. :-) One of the observations is that batteries improve over time.

So 8 years from now in 2012 I won't need to spend $11,000 for a replacement of the crappy old battery pack that was the best Toyota could find back in 2004. Before that time I'll have recycled the current battery and put in something with daily EV range that also increases the Prius' mileage a bit. The Prius is designed so upgraded batteries can be dropped in. As Calcars.org has shown, the Prius has the extra space and a distributed battery management architecture so the engine does not need to be hacked for the car to take advantage of a superior battery. Obviously, the scrap value of the existing battery pack will cut seriously in to the cost of its replacement.

The kind of euro carbon credits smart people have been buying ( http://www.ieta.org/ieta/www/pages/getfile.php?docID=1182 ) are a good deal due to adequate verification.
Chicago carbon credits are underpriced due to lack of buyers persuaded by its verification methods- it eventually should cost more
but for now- by all means, enjoy the bargain.

The capital expense of any new car is partly a real large energy expense for the materials and manufacturing and marketing that went in to producing it.
Rather than a new Camrey, a safe clean and unpopular used car may be a better deal for the environment, if you invest the difference in verified carbon credits.
If you live in an area where it is safe to drive, an electric bike is much better choice.
However the existing style of cars, especially if replicated in China, will doom the planet.
We can switch to new tech which is at hand, we lack only the political will to use it.
I believe the Prius represents a number of seriously important incremental steps towards the life saving tech we need.
PHEV's are a lot closer and get people thinking about sustainability.
Building a market and a supply chain for PHEV's and EV's will take time but will soon beat buying a beater and some carbon credits.

I want Toyota out there inspiring battery manufacturers to help them make better hybrids.
I want them proving out the electric regenerative power breaks and electric power steering and electric air conditioning that will make EV's succeed in the US market.
I'm not so happy about the deals that apparently keep the best batteries out of the hands of other car manufacturers, however.
So buying a Prius sends the best message I can to the car companies right now. There is money in technologies that don't suck.
If the Prius isn't the greenest, I'm eager for the auto-marketing departments to help Americans find one that is better. I don't mind the fact that no "luxury car" is as quiet and smooth as an ordinary Prius in stealth mode. Building a demand for more clean stealth mode driving draws us closer to the right economic solution.

brad

Mon, 2005-12-05 14:16

Very much into the equation, other than saying that there will be an unknown new cost after about 8 years with a Prius or similar hybrid. There are some who argue that the battery technology ruins all the environmental benefit, which may or may not be true but indeed may also get solved with time.

Indeed, the best thing for the environment is a used car or electric bike or non-traditional car. The question I want to investigate however is for the new car buyer asking how to do the most with their money (and their desires) to reduce emissions.

Lots of people have answered that question with a Prius or other hybrid. More so than any other answer that has been offered the public. So it's worth truly working out the numbers as to whether the answer is right, and by what margin, and if it's not right, when it will be right.

I noted that we may simply want to do the environmentally wrong thing (in terms of pure dollars and emissions) to encourage the manufacturers to make better products that are the right thing. That's speculative but perhaps worthwhile. I've often said myself that if California had decided to spend the 8 billion dollars it wastd on Enron during the electricity crisis on solar research or just plain demand for solar, it probably would have generated a breakthrough that finally made solar workable. Solar has other advantages (less need for a grid) that have non-financial values.

The first question however, is at what price point a hybrid is the right environmental choice? Eventually you need to factor in the cost of recycling of the battery and other special components to get a true answer, but even before that you can answer the question "At what cost, compared to putting the extra money into carbon credits, is it a break even proposition?"

If the hybrid costs the same as a similar car, it seems a good win. If it costs $6,000 more, it seems a clear loss. So where is the break-even point and can we say we have crossed it? And how does that point vary for a 10,000 mile/year urban driver compared to a person who puts 25,000 miles a year on the car?

We all want a sustainable system, though that probably requires much wished-for breakthroughs in power storge technology.

JHW539

Tue, 2005-12-06 08:37

There are some who argue that the battery technology ruins all the environmental benefit

I have never seen this argument substantiated for the type of battery used in the Prius (nickel metal hydride). Do you have any citations or references for this statement? I know the issues with lead and NiCd of course - but they are not and never have been used in the Prius (beyond a single battery, like any other car). NiMH seems environmentally quite benign and is classified as non-hazardous waste. Has a proper life-cycle costs analysis actually found the production costs (mining) per unit outweigh the benefits?

brad

Tue, 2005-12-06 11:10

Articles like this one state that the recycling infrastructure for nimh is not yet in place, though that can probably change. I've also seen people claim the risks of car crashes is untested though it seems the sulphuric acide in LABs is pretty nasty too.

JHW539

Tue, 2005-12-06 14:49

Toyota pays a $200 bounty for any dead battery brought in. And they do recycle them - it's tougher to recycle than a lead based chemistry, but nickel is valuable enough to reclaim.

I am not entirely sure what is meant by "risks of car crashes is untested." These cars have been in commercial use in the tens of thousands for over 6 years, have been crashed in use and government testing many times, and have shown no unusual risks. Provided you don't eat a large quantity of the wreckage and survive the mechanical trauma, you're fine. These new and scary hybrids have been being sold for almost 10 years now (the first model sold 1997 - 1999 in Japan). They really aren't new and scary anymore.

Lead acid batteries (LABs) are highly toxic and without proper recycling can wreak enormous environmental damage (hence widespread legislation requiring their recycling and Greenpeace's 90's ranting about offshore LAB recycling). NiMH do not use toxic components, and are recyclable. Environmentally, there is no valid comparison between the chemistries. Lumping NiMH in with LAB is just wrong.

brad

Tue, 2005-12-06 15:08

And I'm not doing it. I was just noting that I had read reports that NiMH recycling wasn't at the level that LAB was (by law or otherwise). I am concerned that if the battery fades by 8 years and you only get back a $200 recycling bounty, it does add quite a bit to the cost of the hybrid. This will take time to work out. And indeed, in 8 years we will probably see better battery tech but that won't mean free, just cheaper when it is time to replace. Of course where I grew up, cars were only good for 10 years anyway. Here in California they are good for much longer.

JHW539

Tue, 2005-12-06 21:27

The Prius batteries (which have been in use in the Prius by the thousands for over 8 years) show no signs of actually requiring replacement after only 8 years. They are really quite coddled by the control system (minimal depth of discharge and good charge management) and likely to last the life of the car (200k+, as a few already have). The fear of a big cost to replace the battery appears unsubstantiated and I have no idea where the incorrect 'oh, you'll have to replace the batteries' meme even started. It's not a flashlight - the batteries seem to be about as reliable and long lived as automatic transmissions (actually moreso in my unlucky experience), yet no one factors in the cost of replacing an automatic transmission after 10 years/150000 miles (the length of the Prius battery warranty in CA). If you don't believe the Toyota engineers about the battery pack, "We have lab data showing the equivalent of 180,000 miles with no deterioration and expect it to last the life of the vehicle," nor trust the 8 year in-the-wild record, or find comfort in the decade-long warranty, then I guess you should budget in the cost of replacing the battery pack. In the same vein, I will budget in the cost of a new transmission for the next Ford I buy (which will be around never, unless its a '65 Mustang fastback - I have a softspot for rolling art).

The problem with hybrids is the extra cost (and the waiting lists). The cost is a real issue, which I think was actually the main point of your original post. But I have yet to hear a single supported concern about hybrid technology that has any legitimate factual basis.

Anonymous

Mon, 2006-02-20 17:44

Having purchased 2 Prius', we found that the $2k that we initially paid for the 2002 minus the tax deduction, plus the high resale value when we bought the 2004, made up for any difference in cost. That differential has actually increased some since our last purchase. So that while we might have bought a Corolla for about $2K less in 2002 we would also have less on resale.

Moz

Mon, 2005-12-05 15:30

Which is a completely different question to the "I'm going to own a car, what's the least awful option" question. But I think it's a point that does bear thinking about. The expense not incurred is almost always the cheapest option.

For the cost of a car where I live I could take taxis everywhere and have change. Or I can avoid bicycle repair issues by just dumping any bike that breaks and taking a taxi to buy a new one... that's still cheaper than owning a car. Once you look at the numbers it gets a bit scary that way.

My stepfather has done this too, BTW, and he's 60. He bikes or walks to work (it's 45 minutes walk each way) and their one car is used by my mother (she works about 20 minutes drive away) when it's wet or she has stuff to carry. But then, they're fit and healthy too... there is no causal correllation between that and getting regular exercise I'm sure. They think it's saved them money but I disagree - they'll probably live longer once they retire, thereby negating any short-term savings.

Evelyn Mitchell

Tue, 2005-12-06 11:32

I'm buying carbon credits to cover the power usage at our hosting facility, because it is the only way I have to encourage the creation of zero carbon power sources through my purchasing power. We rent space at the facility, so I have no control over the utility vendor selection.

I think that carbon credits were designed for exactly that sort of situation, to create a proxy which restores the price communication between the purchaser and supplier, in situations where there is a third party in the middle who is not communicating a green power preference.

They're not perfect, but I agree with you, the advantages are significant.

We're happy to be able to offer 100% zero carbon green Linux hosting.

Christopher Allen

Sat, 2005-12-10 13:13

I currently have a large array of solar power panels on my home, and my intent is to purchase a Prius and install the mod http://www.edrivesystems.com/ as soon as it is available. It adds some batteries and allows you to plug in and charge your Prius while in your garage. This drastically increases the fuel efficiency. In my particular case, where most of my car trips are nearby around Berkeley, very little gasoline or any will be used. And since my electrical power is generated by my solar panel and not power plants, very clean.

I fully expect that this will not be very economical. My roof PV system was only economical because I got in just under the wire with some Calfornia incentives. However, I feel that supporting these efforts will hopefully make them more economical in the future.

brad

Sat, 2005-12-10 14:05

Chris, if you don't mind, can you show us the math that made your PV system economical with the rebates? My calculations suggest you need $2 to $3 per watt total cost to break even, and I have not seen systems at that price even with the rebates. This is compared to the historical 11% annualized return of the S&P 500.

Steve Erlsten

Mon, 2005-12-19 11:27

Congratulations to Moz for going car-free. I've been car-free again for eight months, and I feel great! The ski pants I've had since I was 15 years old fit again!

I hadn't been taking the additional years of food and housing into account, though. Living car-free really will cost more in the long run.

Anonymous

Wed, 2006-03-01 07:19

Living in the US, where the carbon market is artificial, there is the option of forming groups which can then fund the development or application of clean technologies in countries such as india. If you think about the fact the country has almost year round sunshine, a very large population and severe power crunch, funding (indirectly buying carbon credits) use of photovolataic systems in housing developments, recycling waste water, etc, would do a bunch of good for your consciounces. Additionally, it would do real good.

Anonymous

Thu, 2006-05-04 19:31

Using $3.50 per gallon (San Diego price today) and 44 mpg Prius:
Avg of 180 gal/year savings over a Corolla and 284 over a Camry comes to 232 gal/year, or $812 per year, much more than the orig calc of [ ...call it 200 gallons or $450/year — $2800 present value over the predicted 8 year life of the battery.]

Multiplying the 8 year Present value of $2800 by x 812/450 = $5052. And if the battery lasts 12 years then the present value rises to $6761.

brad

Fri, 2006-05-05 02:36

Certainly the more expensive gas gets, the more cost-effective things that save gas are going to get. Of course what you save in a Prius depends on your type of driving (much more saving in city than highway) and amount, but at today's prices it looks better and better.

You shouldn't think from this article that I really oppose the Prius. The article is really about the economics of pollution reduction, and what credits mean to the equation.

Anonymous

Sun, 2007-01-28 16:26

I own a prius as we have a congestion charging system in central london and the prius is excempt. Petrol here costs £3.80 per gallon, thats at least $7.50 per gallon. congestion charge at £8.00 per day or $15 per day ... call it £1800 per year or $3500..

petrol savings at 200 gallons £450 or $900 ...

so conservatively I reckon I'm just about ahead of the game....

It's not green but my pockets happier....

Trefor

Mon, 2007-02-05 03:42

I'm actually incredibly pleased with my Prius T-spirit - it's a great car to drive with the integrated satnav,phone, engine monitor & audio + the hybrid drive especially when I'm forced to crawl through London at 5 miles an hour, I regularly get around 50 m.p.g even when I'm doing that - while on a long motorway cruise it easily gets 55 mpg even in winter..and besides the high price of gas in the UK mine is a company provided car which I have to pay tax on - most drivers for an equivalently priced car would be paying at least $6000 a year in tax based on CO2 emissions - because of the low Prius emissions I only pay about $2000 - so I'm twice as happy

Anonymous

Thu, 2007-07-12 09:39

Do you work or consult for GM? I've never gotten less than 50 mpg on my Prius on a tankfull.

Laurent

Mon, 2007-09-17 14:08

I have read this interesting but flawed "idea". It seems the writer/blogger loses the point. The main point of buying carbon credits is to over time create a situation that polluting becomes too expensive for companies so they take action to reduce their emissions themselves.

Let's not forget pollution is a process. First: You pollute, then you need to clean up your mess. If you don't pollute, no need to clean up your mess. What the Priuses and Solar panels do for the environment is to reduce the amount of pollution generated in the first place. It is much better than pollute like a pig and pay to have it cleaned up. It seems to me it is a more responsible approach. Also, as some others have said in this post, investing in clean energy like priuses and solar panels will inevitably lead to better products that will become even more viable, cheaper alternatives in the future. So instead of paying to clean up the mess you are making now, you are reducing your carbon output and investing to reduce it even more.

Second point is that if everybody was doing what the writer suggest (buying carbon credits) We would reduce the price of the unit of carbon emission, which would then enable companies to continue to buy cheap credits and keep polluting more. It seems to me that would not really solve the problem...

So in conlcusion: It seems the writer/blogger encourages us to keep the status quo and keep polluting like little piggies and buy a good consciences with Carbon credits...

brad

Mon, 2007-09-17 17:12

No, done properly credits are the right system. Our goal is to reduce total pollution, or for more immediate pollutants, pollution in an area. (CO2 is a global thing.)

Society (government) decides how much pollution it is going to tolerate, including none. But it rarely picks "none" because the constituents aren't ready for that. Reducing pollution costs money -- if it saved money you don't need too much incentive to make it happen. You want the money spent on reducing pollution to go where it is the most effective. If you can reduce 1,000 tons of pollutant for $20 by making a factory cleaner or reduce 100 tons for $5 by doing something around your own house, it is far better for the environment to take the $5 and pay the factory. That's what a market in credits solves.

Now, the best credit systems depend on legal total emissions caps, and those caps are supposed to reduce every year. So in the first year, the government might see there is 1 million tons of pollution, and set a cap of 800,000 tons to get people to cut back. Once that is attained, the next year it might reduce the cap to 750,000 tons and so on until it reaches a sustainable level.

Instead of "Think globally, act locally" this is "Think globally, act where your action will produce an ever greater good than it would locally."

These credits create demand for whatever technology works best to reduce pollution. They don't particularly love solar or hybrid cars or anything else. They love what works. It is up to the regular world of investment for people to invest in technologies that in the future will bring good returns. That's a very well proven system.

Aaron Wissner

Sun, 2009-03-08 07:40

Hi Brad,

I don't have time to read this entire article on the carbon contribution of a Prius vs. an other car, but I will add a quick comment for your reflection.

Carbon contribution is 100% proportional to the amount of money spent. In other words, any two $25,000 cars, no matter how they are build or what the materials, contribute equally to carbon emissions.

How could this be the case, when one can add up all of the material and energy ingredients and etc? Because, in our global economy, the money doesn't just stop moving once the raw materials have been paid for, but those mining companies, and labor employees, go ahead and spend that same money into the global economy, and as the money moves from one person to the next, the contribution of that $25,000 in spending evens out to the average of the global economy.

This point is almost always overlooked by anyone doing carbon calculations, that it is simply the number of dollars spent that is a measure of carbon contribution.

A simple way to figure the carbon contribution per dollar (or money unit) is to divide the global GDP by the global human carbon emission figure. The rate is something like 1.3 pounds of CO2 per dollar.

Thus, those individuals who spend the least money, live on the least money, are the best at conserving their cash, etc. are the ones with the least carbon contributions; whereas, those of us who spend every penny we earn (and then some through borrowing/loans), contribute proportionally more.

All other carbon contribution measures attempt to draw artificial boundaries around money expenditures, which is nonsensical in a global monetary system.

So there you go, some food for thought.

Cheers,

Aaron Wissner

Tom D

Sun, 2009-03-08 09:45

http://www.youtube.com/watch?v=Chskjb4WPj8

Prius fails. Another case of human's patting themselves on the back for making stupid choices.

John Douglas

Sun, 2009-03-08 11:26

Before this starts the usual discussion let us address the biggest issue. The end is absolutely right. It is how you drive. This is why the test is important and why you can't argue that they were pushing the Prius to the max. When Prius is tested by the manufacturer it is not taken out and driven on real roads, it is put on a treadmill for a car and run at optimal conditions. The fact is the cars we have that are gas guzzlers are already designed to consume gas in our world, not a treadmill. All the things that add to the performance, while consuming gasoline, also make it more gas friendly than the tech to eliminate it all. Real world driving involves a great deal of stops and starts, which hinder fuel economy (especially in the hybrid) and the hybrid is not really made for highway driving. For the average driver, a hybrid is something that makes you feel good as a person, but does nothing. Especially when you consider what goes into fabricating them. They are concept car that was rushed to market.

brad

Sun, 2009-03-08 12:55

How you drive does make a difference. But the hybrid systems are tuned for efficiency city driving, which is a much more common form of driving, and the M3 is a sportscar designed for speed, which is fun, but rare.

It surprises people to learn the Prius gets better mileage in the city than on the highway, when most cars are the reverse. That's because stop and go is highly inefficient of an ICE, and the hybrid design is very good at stop and go. With that in place, the Prius is taking advantage of the fact that slower driving is more efficient than faster driving, because the inefficiency of air drag goes up with the square of velocity (and power needed goes up with the cube.)

So no, vehicle design is also quite important as well as driving style.

The other comments, about the extra cost of the Hybrid system, both in dollars and environmental damage, is the point made in this post. The Prius (at $2/gallon) is not very effective in term of "how much you help the environment per extra dollar spent." At $4/gallon it is more effective and at European prices it can actually save money, depending on amount of driving and style of driving.

John Douglas

Sun, 2009-03-08 13:01

It just isn't true. The Prius is not tested for city driving. It is not tested for bad roads. It is not tested for stops and starts. This is a fact. Every test from outside researchers about the Prius has led to the same conclusion, the technology is not ready for driving. You are much better off getting a small gas efficient car, like a Honda Civic. You can argue all you want, but all research except that paid for by the manufacturer shows the Prius to be useless unless you live in some perfect suburb and your commute to work is a five minute drive away and you never use the vehicle for a vacation.

Anonymous

Tue, 2010-07-13 15:26

you douchebag!!! i own one and simply put, they are an amazing machine well ahead of it's time. ANYONE who says anything different is a complete moron!!! i went from $20-40 per day to five or six. listen folks these "experts" dont have a clue. drive one for yourself. if you took ALL the collective knowledge of brad and his gang and rolled it into a little ball, shoved it up a knats ass, it would roll around like a b.b. in a mason jar. so long, idiots

Shirley Yewgest

Wed, 2009-05-27 16:18

Carbon credits are a straw man. They are like medieval indulgences used to buy your way out of hell. They are a no-op in this argument. I remember the benefit drives and charities to save the rainforests. Now, a new generation is slashing and burning the rainforests, thus negating the temporary benefits of the rainforest groups. These carbon credit purchases are paying someone's salary but doing nothing to help.

As for the car being more or less polluting...the batteries are 100% recyclable and designed for the life of the car. Toyota has yet to replace a battery due to wear and this is 9 years after they started selling in the US.

Using the cost of the car as a point for finger waggling, realize that people will gladly spend 100K on a sportscar or 40-50K on a fully appointed land boat to ferry the little ones to their soccer games. Complaining about greenies spending an extra 2-8K on a hybrid car is a specious argument. Its their money. You can call them fools, but that means anyone not driving a car covered in rust and Bondo is a fool. You can drive a beater into the ground for 2K, but would you do that if you could afford a nicer ride?

I got a PI in 2001 because it was the 21st century and we did not have jet packs yet. I liked the hack value of it. People insulted me and told me I was stupid to get it (these were people with cars that cost twice what mine did). Then, when prices spiked, they all dumped their landboats at a loss and bought hybrids and called me a visionary. Wankers. I suspect now that prices have dipped, they are shopping for eight seaters with cup holders, diaper changing tables and televisions...

brad

Wed, 2009-05-27 17:56

Today's carbon credits are not properly enforced, so cheaper than they should be, but no, they are not indulgences or a way to buy your way out of hell.

Rather, not having them, not having the limits they imply, is letting people get out of hell free. If you're going to allow any pollution (and politically, you are) properly enforced credits will send the money and effort where it does the most good.

Anonymous

Tue, 2010-07-13 15:19

if you had one, you wouldn't be running your mouth. your opinion is not unlike your breath: really offensive and nobody wants it

Naru

Thu, 2010-10-14 17:53

I still love the Prius. It is a great car!

Mitch

Fri, 2011-05-20 02:07

Good on ya Brad (and everyone else) for blogging about such an important issue - let's keep the debate and emotions going! I have no idea how much carbon credits cost in Australia, but I reckon they'd be ridiculasly cheap here too since Qantas say they can off set my flight to the other side of the county for $5! Right, that settles it, I just read the whole thing & I've decided I'm buying a Prius tomorrow (second hand of course).