The politics of incentives

[boatgeek]

Fascinating.

My understanding was that the Interstate Highway System was originally conceived to improve the military’s capabilities for rapid ground transport around the country, but I’d be curious to know more about this angle.

Here's more about the original intent. Defense was definitely a piece of it, but there were lots of other goals as well. One noted in the history below was to create a lot of jobs to smooth out hills and valleys in employment. The defense justification was important because otherwise the program would be on shakier legal ground. The Constitution gives the feds ultimate authority for national defense, but only power to regulate interstate commerce (vs. facilitate it).

Original Intent: Purpose of the Interstate System - Interstate System - Highway History - Federal Highway Administration

www.fhwa.dot.gov

 

[Tyeeking]

If roads were so popular, why would the government need to step in and fund them? Isn't that just choosing winners and losers?

Who lost?

BTW the government didn’t fund them, taxpayers funded them primarily through fuel tax.

 

[Antares JS]

If roads were so popular, why would the government need to step in and fund them? Isn't that just choosing winners and losers?

You're reaching a bit here. The issue with the creation of the interstate highway system was to figure out who was responsible for maintaining these large roads that crossed state lines and linked major cities in different states. The issue was never whether the roads would be popular with the citizenry.

 

[smstachwick]

Who lost?

BTW the government didn’t fund them, taxpayers funded them primarily through fuel tax.

Passenger rail carriers, mainly.

 

[ThirstyBarbarian]

Who lost?

BTW the government didn’t fund them, taxpayers funded them primarily through fuel tax.

I think when anyone says the government funds something, we all know taxpayers are the ones funding it. It means the same thing. Same for the EV incentives in the new bill. The government is not paying for the new spending and tax credits in the bill. In fact, the bill includes its own funding provisions right in the bill and raises more money than it spends. It’s being paid for with a new 15% minimum corporate tax, IRS tax enforcement, closure of the carried interest loophole, certain pollution-related fees, government negotiation of drug prices, drug price inflation caps, and repeal of a drug rebate program.

 

[boatgeek]

You're reaching a bit here. The issue with the creation of the interstate highway system was to figure out who was responsible for maintaining these large roads that crossed state lines and linked major cities in different states. The issue was never whether the roads would be popular with the citizenry.

The point of the statement is that it's a reach. That was an echo of @Tyeeking 's argument that I quoted above. I was pointing out that it's contradictory to claim that it's unreasonable to oppose EV subsidies because EVs are extremely popular while also supporting road subsidies because roads are extremely popular. I don't disagree with you that the interstate highway system was about standardizing highways and addressing who will pay for construction and maintenance, but @Tyeeking was specifically citing the prevalence of car ownership in the 20's through 50's.

Who lost?

BTW the government didn’t fund them, taxpayers funded them primarily through fuel tax.

As noted above, passenger rail lost. About 70% of the cost of the interstates were funded through user fees (aka gas tax and tolls); the remainder came from the US Treasury or state and local general funds.

Interstate Highway System - Wikipedia

en.wikipedia.org

 

[Tyeeking]

Passenger rail carriers, mainly.

That was a consumer choice of who was going to win or lose. Not a government choice. The government was merely building the infrastructure that supported the consumer choice. There were no direct subsidies to consumers to defray the cost of an automobile and thus encourage them to make the shift.

It’s not complicated.

 

[Peartree]

That was a consumer choice of who was going to win or lose. Not a government choice. The government was merely building the infrastructure that supported the consumer choice. There were no direct subsidies to consumers to defray the cost of an automobile and thus encourage them to make the shift.

It’s not complicated.

But funding one type of infrastructure over another *is* encouraging them to make the shift. If high speed rail, or even decent high-er speed rail, was available to take anyone, anywhere, between major cities and could, with a reliable station change, get you within taxi distance from your destination, almost anywhere in the United States, and highways were less well funded so they were less convenient in many areas, then fewer people would need to own an automobile.

But, if rail funding represented even a fraction of our annual funding of the highway system (which is already too expensive and overbuilt but far too much funding still represents new construction and not needed maintenance and replacement) then in the seven decades since the interstate highway system started, such a rail system would already exist.

Yes, 90 percent of everything at your local Walmart spent at least part of its time on freight rail, and yes, freight rail is profitable. But even so freight rail is struggling and has on-time performance, and capacity that is worse than it was in the 1940's. At the same time, in much of Europe, freight rail can, and does, eliminate the need for trucks in city centers because it delivers those rail cargoes directly to a siding at the IKEA or Walmart store and US local rail infrastructure has deteriorated in most places to near non-existence.

Which infrastructure we fund, and at what levels, chooses winners and losers by influencing (incentivizing) consumer choices.

 

[ThirstyBarbarian]

That was a consumer choice of who was going to win or lose. Not a government choice. The government was merely building the infrastructure that supported the consumer choice. There were no direct subsidies to consumers to defray the cost of an automobile and thus encourage them to make the shift.

It’s not complicated.

It is actually more complicated than you say.

For one thing, the government doesn’t do things because consumers made a choice. It does things because voters made a choice. At least ideally that’s the case — sometimes it does things because lobbyists or corruption influence the government. But mostly I think the government makes decisions like funding roads, bridges, tunnels, etc. because voters want those things. And the same is true for things like the tax credits for EVs. I don’t think politicians would be out there touting the tax credits if they thought voters didn’t want them.

And regarding picking winners and losers, the EV credits are not really doing that, at least in regards to who will benefit. The EV tax credit is a win for the auto industry as a whole, not a win for the EV industry over the ICE industry. They are quickly becoming the same thing. Ford, GM, and pretty much every manufacturer of ICE vehicles stands to benefit from the EV tax credits, because those companies are all also committing to EVs and hope to sell as many of them as possible. I don’t think you are going to hear any car companies complaining about winners and losers.

 

[Tyeeking]

But even so freight rail is struggling and has on-time performance, and capacity that is worse than it was in the 1940's.

BNSF, the thousand pound gorilla of freight rail, posted all time record revenue (Suggests that their capacity is fine) and profits for 2021. $6 billion in profits. We should all “struggle” so much.

 

[cwbullet]

Well, I was taking some time to think about that. I can definitely see the value in some differences in approach to subsidies/tax benefits depending on the industry and its methods. Let's just think about the coal industry for a moment. There are wildly different impacts to the surrounding community created by deep bore mining, open pit mining, and mountaintop removal mining. Whatever subsidies there are for coal mining should account for that in some manner, or require that the companies pay in advance for cleanup/site restoration. Prepayment would be important given a long a sordid history of companies extracting every bit of coal then declaring bankruptcy and sticking the taxpayer with cleanup costs.

Do you pay to dispose of a large flat screen TV? Solar panels should be covered under whatever E-waste policies your local community has. Usually, that's either free (to keep heavy metals out of the waste stream) or some nominal fee. Often, consumers get free disposal and companies (like the ones that you'd use to take solar panels off your roof) have to pay.

Batteries are the same way. Hopefully, battery recycling will get to the point that lead-acid batteries are now, where there will be enough value in a used core that they will be bought and recycled rather than entering the hazardous waste stream. Note that it wasn't that long ago that used lead-acids went into the landfill with everything else.

But the point is that they are not doing that to keep the prices down, and 20 years from now, our kids gonna have to pay for it.

 

[cwbullet]

I’m not sure how California handles recycling solar panels, but I have over 20 years to figure it out.

Personally, I think ALL products should include a disposal fee that is added to the sales price and collected up-front from the consumer at the point of sale.

Nice, I am sure you gonna pass it on to another generation.

 

[ThirstyBarbarian]

Nice, I am sure you gonna pass it on to another generation.

Nice of you to think so. Jeez. I’m sure you’ve planned for the proper disposal of everything you buy.

The fact is our society is woefully bad at this on every level and almost no planning goes into how to dispose of anything. I’m sure you know that 90% of all plastic produced in not even recycleable, even if you wanted to recycle it, and the majority of plastic collected for recycling is not actually recycled. Currently, the best we do with anything plastic is to bury it in the ground where inevitably it will eventually escape into the environment and become part of everything we eat. Almost everything you buy is just buried somewhere, other than some metals, glass, and paper, if you bother to recycle them. And that includes plenty of toxic junk just covered up with dirt somewhere.

I’ll tell you what. My solar panels are supposed to last 25 years, and I’m now almost 3 years in. So I promise to spend the next 22 years figuring out what to do with them in 2044. And in the meantime, you figure out what to do with the hundreds or thousands of pounds of plastic you will purchase in that time.

 

[Tyeeking]

The fact is our society is woefully bad at this on every level and almost no planning goes into how to dispose of anything. I’m sure you know that 90% of all plastic produced in not even recycleable, even if you wanted to recycle it, and the majority of plastic collected for recycling is not actually recycled. Currently, the best we do with anything plastic is to bury it in the ground where inevitably it will eventually escape into the environment and become part of everything we eat. Almost everything you buy is just buried somewhere, other than some metals, glass, and paper, if you bother to recycle them. And that includes plenty of toxic junk just covered up with dirt somewhere.

Can’t disagree with anything you said there. I shudder to think how little of what we use and enjoy ultimately is recycled.

Personally I strive hard to buy quality, do preventative maintenance and own things as long as possible. I’ve lived in the same house for 36-years. I got just short of 500,000 miles out of my Ford Excursion Diesel. When I backpack (admittedly rare these days) I use the old Kelty frame pack that I purchased back in the 1970’s. I tend to shy away from the newest and greatest in part to cut down on what is added to the discarded waste pile. I detest waste.

 

[boatgeek]

But the point is that they are not doing that to keep the prices down, and 20 years from now, our kids gonna have to pay for it.

So what's your solution? Disposal cost fees at time of purchase (see bottle deposits)? Raising garbage rates for electronics? Something else? As long as you apply the same fees to flat screen TVs that you do to solar panels, I'm OK with a bunch of different solutions.

Can’t disagree with anything you said there. I shudder to think how little of what we use and enjoy ultimately is recycled.

Personally I strive hard to buy quality, do preventative maintenance and own things as long as possible. I’ve lived in the same house for 36-years. I got just short of 500,000 miles out of my Ford Excursion Diesel. When I backpack (admittedly rare these days) I use the old Kelty frame pack that I purchased back in the 1970’s. I tend to shy away from the newest and greatest in part to cut down on what is added to the discarded waste pile. I detest waste.

Hey, common ground! Most of my clothes come from thrift stores, and what doesn't I try to get things that are durable. We also buy for the long term and use as little disposable stuff as possible. Even that, we re-use as much as we can.

It's really depressing when we're camping to see the amount of trash that people generate, even if it does make it into the dumpsters. Our total trash for a meal for four typically fits in one hand. Then you see people dumping giant bags full of paper plates and plastic cutlery.

 

[Tyeeking]

Hey, common ground! Most of my clothes come from thrift stores, and what doesn't I try to get things that are durable. We also buy for the long term and use as little disposable stuff as possible. Even that, we re-use as much as we can.

It's really depressing when we're camping to see the amount of trash that people generate, even if it does make it into the dumpsters. Our total trash for a meal for four typically fits in one hand. Then you see people dumping giant bags full of paper plates and plastic cutlery.

Common ground indeed. We probably have far more common ground than not. Your handle suggests a passion for boats, something that I have as well. And of course there is always rockets.

I find waste to be depressing. Whether it’s food, money, or goods I detest the “throw away” mentality. It cheapens things and when we cheapen something we lose our appreciation for it.

 

[rharshberger]

Common ground indeed. We probably have far more common ground than not. Your handle suggests a passion for boats, something that I have as well. And of course there is always rockets.

I find waste to be depressing. Whether it’s food, money, or goods I detest the “throw away” mentality. It cheapens things and when we cheapen something we lose our appreciation for it.

Politics and Religion are two subjects that can eradicate common ground between individuals faster than anything else, probably. I have friends that I know have differing opinions on both than I do, but we dont discuss those often because I would rather have a friend than an enemy.

 

[cwbullet]

So what's your solution? Disposal cost fees at time of purchase (see bottle deposits)? Raising garbage rates for electronics? Something else? As long as you apply the same fees to flat screen TVs that you do to solar panels, I'm OK with a bunch of different solutions.

Hey, common ground! Most of my clothes come from thrift stores, and what doesn't I try to get things that are durable. We also buy for the long term and use as little disposable stuff as possible. Even that, we re-use as much as we can.

It's really depressing when we're camping to see the amount of trash that people generate, even if it does make it into the dumpsters. Our total trash for a meal for four typically fits in one hand. Then you see people dumping giant bags full of paper plates and plastic cutlery.

I agree with the concept, btu it needs not to be retroactive. If you did not pay, it is not covered. I just don't want my taxes going up to sponsor someone. If you are wealthy enough to afford the panels and the batteries, you should be able to afford to dispose of them.

 

[cerving]

Solar panels CAN be recycled, in the same way that other semiconductor-bearing devices are recycled. Google it. It's gonna take a long time before the volume of solar panels eclipses the volume of cell phones, TV's, and other electronics... which, in CA at least, are not allowed to be simply thrown in the trash. They're REQUIRED to be recycled.

 

[Tyeeking]

Politics and Religion are two subjects that can eradicate common ground between individuals faster than anything else, probably.

Don’t forget the debate about “is it a model rocket motor or a model rocket engine”. That subject is right up there with politics and religion. LOL

 

[boatgeek]

I agree with the concept, btu it needs not to be retroactive. If you did not pay, it is not covered. I just don't want my taxes going up to sponsor someone. If you are wealthy enough to afford the panels and the batteries, you should be able to afford to dispose of them.

Solar panel removal is a reasonably specialized business, since you have to disconnect a bunch of electrical stuff as well. It's going to almost entirely be done by a licensed contractor, so the chances of proper disposal are far, far higher than, say, computer monitors.

 

[rharshberger]

Don’t forget the debate about “is it a model rocket motor or a model rocket engine”. That subject is right up there with politics and religion. LOL

Glue FTW!

 

[ThirstyBarbarian]

It does annoy me to be challenged on what I’m planning to do with my solar panels 25 years in the future and being accused of pushing it off on future generations, when we know about the air pollution being generated every day from burning fossil fuels, pollution from coal mining residue, brown fields left behind from oil drilling, water pollution from hydraulic fracking. That stuff is sticking around for future generations.

This concern about the proper disposal of solar panels is a legitimate concern, and I’m open to thoughts on that coming from anyone bringing it up in good faith, but it’s total BS when it comes from people who think nothing of tossing dead batteries in the trash. You need to turn those in as household hazardous waste. Same for TVs, computers, monitors, printers, phones, tablets, or any other consumer electronics. You can’t just toss that stuff in the trash. That needs to be properly disposed of. Drop it off at the e-waste collection site. Also other household hazardous waste — paint, insecticides, pesticides, herbicides, fertilizer, solvents, fluorescent lights, motor oil, oil filters, fuel, etc. That stuff can’t go in the trash, and it can’t go down the drain. Turn it in at your household hazardous waste drop off.

 

[cwbullet]

it’s total BS when it comes from people who think nothing of tossing dead batteries in the trash.

My goal is not to make this personal but to highlight some hypocrisy to the idea.

I probably do it far more than you and most Americans. I am very concerned about our environment and do more than most.

Being environmentally conscious is near being a religion. Recycling, for example, is a part of this. Recycling is not available locally. I put in the effort for my son and his children. I live very similar to Germans. I compost. I recycle everything that I can do in my local environment. I do so even though I have to travel 45 and 60 minutes. No a special trip, but I save them up in my own storage center until I have to travel to each recycling center for another purpose and make the trip dual purpose. I will not put recyclables and avoid putting toxins in the trash.

My point in posting the point above is to challenge how we think. There are a significantly large number of electric car and solar panel owners that I have talked to who like to flaunt how good they are for the environment. When I ask them their plan is to dispose of the panels or batteries, they often say that it is someone else's problem or that the panel will outlive them. Heck, some don't even recycle and just own the panels to save money or to flaunt their off-the-grid lifestyle.

I might eventually go off the grid when it is truly off the grid. I like the concept and will do so when they overcome some of my concerns. Currently, in my area, it is cost prohibitive, and you still have to live without power or use the grid at night. Rationalize as much as you want, but that is not off the grid.

 

[ThirstyBarbarian]

I found this both interesting and confusing. Politics is definitely strange.

Hmmmm… I guess it’s better than nothing, but it seems overly complicated, and it sounds like might disqualify too many car models and car buyers.

I understand there are policy goals around encouraging manufacturing in the US, and there are concerns about government subsidizing luxury items and wealthy individuals. But I think I would have preferred a less restrictive bill.

The good news is that it sounds like a lot of decent EVs for ordinary folks with average incomes will qualify, and that’s a huge market. And manufacturers of high-end EVs like Tesla probably won’t be hurt much if they miss out.

The real potential losers are start-ups who are manufacturing outside the US.

 

[OverTheTop]

FYI electricity is around $0.30/kWh here, and they have just wound back the feed-in tarif from $0.12/kWh to $0.09/kWh for our solar power system (10kW). Payback went from around six years to much further out so we will never recoup the cost. There is talk of $0.06/kWh, at which point I will consider whether I will feed the grid or not. I don't consider paying over 30c/kWh and only getting 5c/kWh feed in rate. They would be selling my power for a 500% profit, and they haven't even had to generate it. Grrrr

Update. I just found a different retailer and managed to get my 30c/kWh down to 25c/kWh, and my feed-in tarif from 6.2c/kWh up to 10.2c/kWh. Same electricity, but $900 per year cheaper.

 

[Arnie]

AS far as infrastructure goes I quote former President Barack Obama: "When questioned at a June 13, 2011 meeting with his Council on Jobs and Competitiveness about the tortuous permitting process for construction projects, President Obama quipped, “Shovel-ready wasn’t as…uh…shovel-ready as we thought.”

 

[jderimig]

Update. I just found a different retailer and managed to get my 30c/kWh down to 25c/kWh, and my feed-in tarif from 6.2c/kWh up to 10.2c/kWh. Same electricity, but $900 per year cheaper.

The buyback rate differential is only going to get wider as home solar grows simply because your excess watts are not worth as much when its not needed. Valuable electricity are the watts when the sun isn't shining and the wind is not blowing.

 

[mh9162013]

I am comfortable with reading the text of laws and the Code of Federal Regulations to see what they say.

If you want a full understanding of the law, reading statutes and regulations isn't enough. You also need to read federal court opinions interpreting those statutes and regulations for the full picture.

If you want to get into the weeds, an agency's advisory opinions/memos/whatever-they-want-to-call-it will give you an even more detailed understanding of what the law could be. But because these advisory pieces don't technically have the force of law and merely indicate an agency's inclinations for a given situation, you have to recognize that a new President or agency head (or a federal judge) could change those inclinations at any given time.

As if that's not complicated enough, there could be state laws or regulations that contradict the federal laws/regulations. While preemption means the federal law should rule supreme, that isn't always the case. For example, unless you do a case law search looking for decided AND pending cases, you can't know that whatever you just read isn't going to be overridden by a court case about preemption that's about to be decided.

 

[Tyeeking]

If you want a full understanding of the law, reading statutes and regulations isn't enough. You also need to read federal court opinions interpreting those statutes and regulations for the full picture.

If you want to get into the weeds, an agency's advisory opinions/memos/whatever-they-want-to-call-it will give you an even more detailed understanding of what the law could be. But because these advisory pieces don't technically have the force of law and merely indicate an agency's inclinations for a given situation, you have to recognize that a new President or agency head (or a federal judge) could change those inclinations at any given time.

As if that's not complicated enough, there could be state laws or regulations that contradict the federal laws/regulations. While preemption means the federal law should rule supreme, that isn't always the case. For example, unless you do a case law search looking for decided AND pending cases, you can't know that whatever you just read isn't going to be overridden by a court case about preemption that's about to be decided.

^^^^^ This. Agencies use broad discretion in how they interrupt and enforce legislation. This broad discretion is frequently very political and subject to which party controls the Executive Branch as well as the courts. Witness the recent rulings by SCOTUS that went against the EPA for overstepping it’s regulatory duties.