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portion, based on regional average utility rates. A general standard must also be developed for hydrogen fuel cells that can be easily compared against electric and conventional gasoline powered vehicles. These standards must be incorporated into CAFE standards to provide additional incentives to auto-manufacturers and aid in compliance. 3. Repeal the current Renewable Fuels Standard, reinstating it when next- generation biofuels become available. The passage of the RFS was premature. Any RFS should only mandate the use of “next generation” biofuels, those produced from algae or other non-food stock crops. Currently available first-generation biofuels produced to meet RFS are harmful to the environment and increase food prices for consumers both domestically and globally. Only when next generation biofuels become widely available should an RFS be reinstated. 4. Extend tax credits for purchases of hybrids, plug-in hybrids, pure electric, and hydrogen fuel cell vehicles until these vehicles comprise 50 percent of the U.S. auto fleet. Hybrid, plug-in hybrids, pure electric, and hydrogen fuel cell vehicles are more expensive than conventional vehicles because of the advanced technologies they contain. Until they become cost-competitive with conventional vehicles, their purchase should continue to be subsidized by the federal government. Currently, the federal government provides a $3,400 income tax credit for purchasing a hybrid vehicle and $4,000 for purchasing an electric or hydrogen fuel cell vehicle, with some state and local governments providing additional incentives. The federal tax credit for hybrids is limited to the first 60,000 vehicles sold for each manufacturer.17 The tax credit should be extended until hybrid, plug-in hybrid, electric and hydrogen fuel cell vehicles make up 50 percent of the total number of consumer vehicles on the road. This policy will increase the demand pull for these vehicles, accelerating their deployment across the nation. It also reduces the economic burden placed on consumers by the carbon tax. 5. Extend consumer tax credits for converting older vehicles to improved efficiency technologies. The federal government should also make similar tax credits available to consumers who cannot afford or do not wish to purchase a new car, but see value in increasing the fuel efficiency of their vehicles. Local body shops have begun to provide services retrofitting conventional internal-combustion engine vehicles for hybrid, plug-in hybrid, or pure electric use; however, these conversions can be expensive, mostly due to the costs of the batteries required. The $3,400 and $4,000 tax credits should be extended to these conversions as well, depending on the type of conversion, and paid for using carbon tax revenue. Tax credits should also be offered to consumers converting to hydrogen fuel cell powered vehicles. This policy will promote the growth of a new industry in refitting outdated vehicles and protect consumers from increased gasoline costs due to the carbon tax. These tax credits, too, should expire when hybrid, plug-in hybrid, electric, and 171PDF Image | Shaping Energy Technology Transition
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