Global warming ...

[wwhitney]

It's interesting how you began with advocating personal accountability (I can only act in a fashion which...) but then only a few posts later flipped to a public position where society shares both the debits / credits of CO2 over a car's lifetime. Which one is it Wayne? Do accounting opinions typically flip-flop like this?

I was happy to leave things at agreeing to disagree, but the above asks for a response.

There's no flip-flop, I'm not allocating any of the manufacturing CO2 footprint of the car to "society at large," but among all of the individual owners of the car over its lifetime. Remember I said "I can only act in a fashion which, if everyone acted similarly, will abate global warming." If everyone uses my method of CO2 accounting, all the CO2 gets counted. I find this allocation fairer to consumers and more realistic than the system you propose, as my thought experiments have demonstrated.

Allocating none of the CO2 manufacturing footprint to the used EV buyer makes no sense. It is personally convenient for the used EV buyer, though.

Cheers, Wayne

[SeanNelson]

We agree that there is an initial CO2 footprint cause by the creation of a car. We agree that the 53% reduction in CO2 vs a similar full size gasoline car over 179,000 miles sounds reasonable and/or is more or less in the ballpark. I think we're on the same side, we just disagree about who owns the CO2. The crux of the debate is about personal responsibility vs public responsibility about who gets debited / credited for those emissions.

I've been watching this with some interest and I believe I understand the arguments that you are both making. But I don't believe that the original owner of the new car should bear the responsibility for the entire environmental cost of building it, for two reasons:

1) When someone buys a new EV with the intention of selling it after 3 years (i.e., leases it), he has the expectation that the car will not be scrapped but will instead continue to be used by a new owner. I certainly wouldn't buy a new EV if I expected it to be scrapped that quickly. So the intention of the new EV buyer is that the car will provide an environmental benefit compared to an ICE vehicle over its entire lifetime.

2) If the normal state of affairs was such that original owner wouldn't be able to sell his car after three years, it would drastically change the buying and usage patterns of automobiles. The concept of the 3 year lease would vanish, because aside from a relatively few wealthy people, nobody could afford to buy a new vehicle and just throw it away after such a short period of time. Therefore the used car market essentially subsidizes the purchase of new cars, and so buyers of used cars should, IMHO, bear some of the responsibility for the environmental cost of originally manufacturing that car.

Perhaps a more reasonable concept would be to pro-rate the manufacturing environmental cost based on the purchase price of the new vehicle vs. the used, although the existence of collector cars that appreciate in value makes that problematic. However throwing it all upon the new car buyer is unreasonable, IMHO.

[oilerlord]

If everyone uses my method of CO2 accounting, all the CO2 gets counted.

"All" of the CO2 gets counted? No it doesn't. All you're doing is taking a guess at it. After you return your lease, or sell your car, how can you possibly account for all the CO2 that the car will or will not contribute to global warming? What if the next owner has solar? What if the next owner lives in Michigan, and charges exclusively from grid power in that area where generated power isn't all that clean? What if the third owner wrecks the car at 60K miles? You have NO IDEA about the amount of CO2 because you have no actual data. In my personal experience with accountants, they don't make guesses. You on the other hand, have no issue with proposing an accounting method (or lack thereof) where the numbers required to form an analysis to formulate an accounting opinion - don't exist.

Remember GAAP? One of the objectives is about maintaining records. Another objective is being helpful in making long term decisions. How can you accomplish either if you don't have access to the data?

Thanks, but I'll stay with my own accounting method in terms of my own individual CO2 scorecard. Guesswork isn't part of the equation.

PS> I used to think you were an accountant. Not sure about that anymore.

[oilerlord]

I've been watching this with some interest and I believe I understand the arguments that you are both making. But I don't believe that the original owner of the new car should bear the responsibility for the entire environmental cost of building it, for two reasons:

1) When someone buys a new EV with the intention of selling it after 3 years (i.e., leases it), he has the expectation that the car will not be scrapped but will instead continue to be used by a new owner. I certainly wouldn't buy a new EV if I expected it to be scrapped that quickly. So the intention of the new EV buyer is that the car will provide an environmental benefit compared to an ICE vehicle over its entire lifetime.

2) If the normal state of affairs was such that original owner wouldn't be able to sell his car after three years, it would drastically change the buying and usage patterns of automobiles. The concept of the 3 year lease would vanish, because aside from a relatively few wealthy people, nobody could afford to buy a new vehicle and just throw it away after such a short period of time. Therefore the used car market essentially subsidizes the purchase of new cars, and so buyers of used cars should, IMHO, bear some of the responsibility for the environmental cost of originally manufacturing that car.

Perhaps a more reasonable concept would be to pro-rate the manufacturing environmental cost based on the purchase price of the new vehicle vs. the used, although the existence of collector cars that appreciate in value makes that problematic. However throwing it all upon the new car buyer is unreasonable, IMHO.

Sean, I think you've done it in one post. Underlined is interesting. We can explore that. Perhaps there is a compromise between how much CO2 that the original new car buyer and the used car buyer lists on their scorecard.

Interesting suggestion to pro-rate the environmental cost based on purchase price, but not sure how it applies. My car was 2 years old, with only 6,000 miles on it - but I bought it at 65% off MSRP. When you have a moment, run through your thought process on that.

[wwhitney]

"All" of the CO2 gets counted? No it doesn't.

Sure it does, if you actually execute the accounting. I'm not actually proposing it as a practical system, more of a thought exercise, although I guess DMV could execute it. The downside is that none of the owners learn their share of the manufacturing CO2 footprint until the car reaches end of life.

If you want a practical accounting system, then let's treat it like depreciation of business assets. Pick an artificial lifespan of a car, say ten years. [Maybe determine the 95% lifespan of cars and use that.] For the first ten years of the car's life, any owner's share of the manufacturing CO2 footprint is prorated based on time of ownership. After ten years, any additional owners get a free ride on the manufacturing CO2 footprint, the car is fully CO2 depreciated. Anyone retiring the car from service prior to ten years gets the full remaining manufacturing CO2 footprint.

There you go, easy to implement, no retrospective determinations required. If you like, you could do the whole thing on a mileage basis, rather than a calendar time basis, just pick a mileage for fully depreciating the manufacturing CO2 footprint.

BTW, your concerns about operating CO2 footprint are irrelevant, we are just discussing allocation of manufacturing CO2 footprint. Any owner can easily track their operating CO2 footprint while they own the car, and I don't see why that should have any bearing on the allocation of the manufacturing CO2 footprint.

Cheers, Wayne

[SeanNelson]

Interesting suggestion to pro-rate the environmental cost based on purchase price, but not sure how it applies. My car was 2 years old, with only 6,000 miles on it - but I bought it at 65% off MSRP. When you have a moment, run through your thought process on that.

The thought came from the idea of the used car buyer subsidizing the new car buyer, with the amount of the subsidy factoring in to the "responsibility". But I knew it was a bit of a sketchy idea. Something prorated based on the total distance driven per owner might be a better metric.

Of course this is all really just a thought experiment - nobody should expect to actually bear any tangible share of "manufacturing environmental impact" other than as a way to think about how "green" they're being when they buy and use any car, EV or not.

I suppose ideally the manufacturer would pay something akin to a carbon tax to offset the various aspects of environmental costs (similar to the idea of paying a recycling levy when buying tires, for example) and pass the cost along to the consumer. That would make the "manufacturing environmental impact" a tangible cost that the market would then factor into their decisions.

[oilerlord]

Of course this is all really just a thought experiment - nobody should expect to actually bear any tangible share of "manufacturing environmental impact" other than as a way to think about how "green" they're being when they buy and use any car, EV or not.

I suppose ideally the manufacturer would pay something akin to a carbon tax to offset the various aspects of environmental costs (similar to the idea of paying a recycling levy when buying tires, for example) and pass the cost along to the consumer. That would make the "manufacturing environmental impact" a tangible cost that the market would then factor into their decisions.

It's a little more than an experiment for me, because I am interested figuring out a reasonably accurate measure of the net CO2 from our household. My solar gives me a starting point about how many tons of CO2 I'm offsetting (about 3 metric tons/year), and the trees/shrubs we planted (about 0.5 metric tons/year), then then add the amount of CO2 from the usual suspects (diesel, gasoline, nat gas) based on consumption. Based on mileage/year from our ICEV's we're at around 4 metric tons, and heating our house added another 2.7 metric tons.

Back of the napkin calculation results in my contribution to the planet's death-by-CO2 at about 4.2 metric tons of CO2 per year. Of course, that doesn't add granular stuff like the cost of transporting the food and gadgets we buy, or our air travel - or my share of the initial CO2 created from the manufacturing of my car(s).

It's pretty eye-opening when you go run through the exercise of actually adding up your household's CO2. Unless I heat my house from wood (sustainably), and become grid-neutral using solar, I think it's nearly impossible to achieve a net-zero position on CO2. I have 41 solar panels on my roof, and don't have space for another 50 of them, and I can't afford building a solar farm. Without playing the purchase-carbon-credits shell game, net-zero isn't realistic.

I'm not at all in favor of carbon taxes, mostly because I believe that the money collected isn't actually being spent on reducing CO2. In Alberta, it's simply another tax we can't afford (especially now), and a transfer of wealth. The environmental programs being funded by the little of what's left over are dubious at best. As far as carbon credits are concerned, I've always been skeptical about how writing a cheque lowers my (actual) CO2. I think all that does is feed into the red tape (and possible corruption) in the name of saving the planet.

[wwhitney]

I'm not at all in favor of carbon taxes, mostly because I believe that the money collected isn't actually being spent on reducing CO2.

The point of a carbon tax isn't to collect money to spend on reducing CO2. The point is to correct the market failure in which the harm a product does isn't reflected in the product's price. The money collected could be flushed down the toilet and it would still have this effect. The market will respond by gravitating to the less carbon-taxed, and hence cheaper, options.

Of course, I also agree that a straight carbon tax is regressive, so it would be nice to couple the carbon tax with a non-regressive, refundable tax credit to counterbalance that.

Cheers, Wayne

[SeanNelson]

Unless I heat my house from wood (sustainably), and become grid-neutral using solar, I think it's nearly impossible to achieve a net-zero position on CO2. I have 41 solar panels on my roof, and don't have space for another 50 of them, and I can't afford building a solar farm. Without playing the purchase-carbon-credits shell game, net-zero isn't realistic.

Yeah, buildings actually emit more CO2 than cars and transportation do, and it's not talked about very much. And that's pretty much beyond any individual's effort to deal with - it has to be dealt with at a societal level with strategies such as building codes, investment in a cleaner grid, etc.

That still doesn't mean that we shouldn't also try to do what each of us can, though. It's the cumulative effect of billions of us that caused this problem, and it'll take the cumulative effort of billions of us to fix it.

[oilerlord]

Al Gore claims to live a "carbon-free lifestyle". Can anyone hazard a guess to what that means? Adding up my own CO2 numbers, I don't see how that's possible. I drive a car, live in a house, take air travel, eat food and buy manufactured goods that were shipped to my city. I don't think Al lives in a mud hut & lives off the land...so how does he do it? Writing a cheque to buy carbon credits doesn't change your lifestyle. Does he own a solar farm that he's using as an offset to his lifestyle? Even if that's the case, how would his lifestyle be "carbon-free".

I've been giving more thought about who takes ownership of the CO2 created during the manufacture of a car. Sean's point made me think that the first owner that lost $20,000 in the nine months of ownership - should be given a break on the car's initial CO2 footprint. Not only is it about the big financial loss they took, but they did society the service adding a green(er) car to the overall fleet - with the assumption that an ICEV will be subtracted. With that said, even if I shared that CO2 50/50 with the first buyer, they still take on 50% of their next car every 3 years (or in regards to my transaction, in month #10). I'll be holding onto my EV for at least 8 years / 100,000 miles. Perhaps it isn't a debate about buying new vs used, but more about how many miles we put on our cars as individuals.