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When it comes to making the earth more sustainable, claims are being made all over the place. But what is true? Together with sustainability expert Auke Hoekstra, better known on Twitter as ‘Debunker-in-Chief‘, Innovation Origins sets out to find this out for you. This week, Auke exposes a flaw in the mindset of the government when it comes to electric driving. What exactly is going on there?

As part of a €6.8 billion package of climate measures, the government is allocating €600 million to promote electric driving. A good thing you might say, but most of the money is not being used to put more plug-in cars on the roads. Instead, it is being used to cover a gap in the budget. Because more and more people are driving electric cars, the government is pulling in less money from road tax and excise duties. In order to cover this shortfall, more than €500 million of this “stimulus for electric driving” is going directly into declining fossil-fuel transport revenues, according to the PBL Netherlands Environmental Assessment Agency.

“So, this is something very different from promoting electric driving,” says Auke indignantly. “It bothers me that politicians are trying to make a good impression by acting as if they are allocating money to support electric driving, while in fact they are just shifting money from one jar to another. Obviously, it’s a shame that the treasury is losing income, but we shouldn’t be thinking like that at all.”

Then just stop insulating your house

Auke can’t suppress a cynical laugh: “If it’s only about government revenue, we might as well stop insulating our homes. Poorly insulated properties yield more energy tax. If we follow this line of thought, we might as well all start smoking heavily and driving a huge hummer to line the state coffers.”

Moreover, Auke laments, politicians are projecting that electronic driving will cost an awful lot of money. “While you – if you do the math right – want to know whether the Dutch business community will benefit from this. Will we become poorer or richer? That’s something we always want to know,” Auke closes his eyes and explains that procuring all those electric cars costs money. “This money is siphoned away from the Netherlands. It’s true that these cars are more expensive to buy than conventional vehicles, but they are a lot cleaner. At the same time, this also means that we don’t have to import as much oil from other countries. The greening of the electricity mix is also contributing to this. If you weigh all of that up, you can say with certainty that electric driving will be profitable long before 2030.”

That’s why Auke thinks it’s a good thing that €90 million is being set aside for private individuals who want to buy an e-car. “Public interest is high, a similar kind of subsidy was used up very quickly last year. Now more money than originally planned is being earmarked for this, which is good. This will enable more people to switch to electric driving. Not only due to this fund, but also because more and more affordable models are coming onto the market.”

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Offsetting the costs of CO2 damages against the loss of excise duty

But according to Auke, the real benefit is found in the reduction of CO2 emissions. According to the PBL, emissions will drop by a total of about 1.4 megatonnes between now and 2030 (0.1 to 0.2 megatonnes of CO2 per year). “The damage that these emissions would have caused can be set off against the loss of excise duty. By driving electrically, you avoid emissions and the damage that goes with it. That’s what the real gain is for the Netherlands.”

Except, as Auke also knows, it’s pointless to look at just the Netherlands. “Suppose you look at the world and start to work out what this means for 8 billion people. Then you also have to take into account the consequences of higher CO2 emissions. Will you have more floods? Heat waves? Or other kinds of damage? That is now being calculated in the social cost of carbon, which shows how much the damage from one tonne of CO2 costs.”

More about the social cost of carbon here.

“Now, when making calcuations, we still work with a kind of discount rate that ensures that the mess we are making will be left for later generations. This discount rate presumes that money will become more valuable. So for the same amount of money now, you will be able to clean up more mess in 2100. This is how we keep putting this off indefinitely. Why? Surely it’s much more logical and clearer if each generation is responsible for their own pollution.”

Each generation is responsible for its own pollution

With one finger raised in the air, Auke goes on. “More and more experts agree and are advocating for the scrapping of that discount. And that’s good news. If we do that, then we are personally responsible for the mess we make. Do you still want to use coal then? Suddenly its five times more expensive. That’s really not profitable, just look how quickly all those power stations will shut down.”

It would therefore be a good idea, according to Auke, to apply these calculations to mobility as well. “The point I want to make is that it doesn’t cost any money. If you were to properly calculate the cost of the CO2 damage you cause by burning fossil fuels, you can write off the revenue from excise duties. The rationale that electric driving is expensive and also robs the public purse of money is just not true. This is a flaw in thinking. By driving electric, we are inflicting less damage on the world. We drive cleaner and cleaner and don’t have to buy as much oil. This leads to fewer crop failures, floods or heat waves.”

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