Expanding the Electric Vehicle Market

In my series of podcasts, I’ve had the opportunity to engage in conversations with remarkable people who have worked at the intersection of economics, energy, and environment, with backgrounds and experiences in multiple sectors, including academia, government, the private sector, and NGOs.  My most recent podcast guest was no exception, because I was joined by Elaine Buckberg, my colleague at the Harvard Kennedy School, where she is a Senior Fellow in the Salata Institute for Climate and Sustainability, and previously served as Chief Economist at General Motors, and before that worked at a number of economic consulting firms and investment banks, as well as the U.S. Department of the Treasury and the International Monetary Fund.

So, I was eager to feature an episode with Elaine in my monthly podcast,  “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.” The podcast is produced by the Harvard Environmental Economics Program.  I hope you will listen to our conversation here.

Elaine Buckberg draws on her experience in macro, micro, and financial economics, both domestic and international, and much of her current work at Harvard focuses on the economics of electric vehicles (EVs) and policies intended to encourage their development and adoption.  

In our conversation, she remarks that despite progress in the growth of the U.S. EV market over the past decade, there remain a couple of significant obstacles.

“Number one is [the] availability of public charging. Everyone, even if they can install home charging, want to believe that if they buy an EV, they can do a road trip, and it won’t be a challenging or frustrating experience. So, having highway charging that works, that’s widespread, and that’s reliable is huge for adoption. And that comes through in JD Power surveys of vehicle buyers too, for the top five reasons why people just bought [or] don’t buy an EV in recent quarters are all about charging. The other barrier is about price differentials … People have a limited willingness to pay more for an EV,” she says.

Of course, the Trump administration is taking steps through its “One Big Beautiful Bill Act,” Buckberg notes, to roll back subsidies for domestic EV purchases and impose a $250 per/year fee on EVs to compensate for lost gas taxes.  I will add that the OBBBA also functionally eliminates any effect of CAFE standards for motor vehicle fuel efficiency (which go back 50 years to a law signed by President Gerald Ford) by eliminating the penalty for non-compliance.

However, Elaine says that most automakers understand that changing market dynamics on their own will compel them to embrace green technologies. 

“[They] overwhelmingly believe that EVs are the future and are ambitious about getting into the market and want to be early winners in the EV market but also need to achieve profitability along the way in order to satisfy investors and be able to make those very substantial investments in their EV program,” she explains. “There [are] some differences among automakers. Automakers that are heavily in Europe or in China have to shift over their portfolios faster. I think GM and Ford are very ambitious. The Europeans are very ambitious. Hyundai and Kia [are] doing very well with EV models in the U.S. market.”

Looking over the longer term, Buckberg states that as EV battery ranges and charging capacities expand, this will further drive the advancement of the EV market – both in the U.S. and abroad.

“I’m a really big believer in the technological progress that the amount of research that’s happening on batteries – public and private – around the globe will really continue to drive down battery costs and get us to that point where buying an EV is actually cheaper than buying an internal combustion engine (ICE) vehicle even on the upfront costs, and that will be very compelling to people,” she states.

“I also think that some of the other challenges around charging and speed of charging are improving with continued rollout of chargers as well as improvements in the batteries that enable them to take in faster charges. You may have seen that there were a couple of breakthroughs from BYD and CATL, two Chinese companies, where they’re saying you could charge a vehicle in five minutes on new chargers they are developing that could provide more than a thousand kilowatts per hour and vehicles that could take them in at that speed.”

At the other end of the spectrum, Buckberg sounds an alarm for U.S. automakers who drag their feet on their EV programs.

“This is the future of auto, and if we want the U.S. to continue to compete in auto, if you want us to have jobs in auto and be a producer, we can’t fall further behind the rest of the world. Even without the emissions requirement, from a pure jobs and industry requirement, you want domestic production. This is the future of the auto industry, and if we don’t make them domestically, if we don’t promote sales, we will fall further behind in efficiency in learning, and we may not have a domestic auto industry in the future,” she warns.

For this and much more, please listen to my complete podcast conversation with Elaine Buckberg, the 68th episode over the past five years of the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunesPocket CastsSpotify, and Stitcher.

Share

An Ambassador’s Insights about China-U.S. Relations

Bilateral efforts between the United States and China to address climate change have come to a virtual standstill asU.S.-China relations have taken a turn for the worse in recent months, with a trade war emerging, precipitated by U.S. President Donald Trump’s tariff initiatives.  That is part of the assessment offered by Nicholas Burns, the Roy and Barbara Goodman Family Professor of the Practice of Diplomacy and International Relations at Harvard Kennedy School and former U.S. Ambassador to China – in the latest episode of my monthly podcast,  “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program.” The podcast is produced by the Harvard Environmental Economics Program.  I hope you will listen to our conversation here.

Nick Burns, whose esteemed career in the civil service has spanned more than 30 years, explains that the Biden administration had two major priorities for U.S.-China relations while he served as U.S. Ambassador from 2022 to 2025.  

“Competition for us was the main focus of our efforts with China, but we also knew…that we have to live in peace with China. The idea of a war would be catastrophic for both countries and the world, and there are some issues where our interests are aligned and we need to work together for the benefit of both of our countries and the world.  I thought that signature issue was climate change, and that China and the United States could…work together both in the Paris Agreement process and also bilaterally,” he remarks.

“I am someone who deeply believes in the Paris Agreement, that we need to remain committed to working with China and the other 193 or 194 nation states as part of the Conference of the Parties, and that this is an existential issue for the future of our planet, for the eight billion people who live on it.”

Nick notes that while the bilateral relationship may be primarily competitive, there are occasions when the two countries can work together as was the case when the United States and China negotiated and signed the Sunnyland Statement in 2023, affirming the two nations’ joint commitment to take actions to address climate change.

“[Former U.S. lead climate negotiator] John Kerry and [China’s former special climate envoy] Xie Zhenhua spent a lot of time together… to achieve that statement where… they held up climate change as an issue where it was definitely in the interest of both countries and that both of us had to play a leadership role,” he explains.

Nick Burns also describes in our podcast conversation his frustration with the Trump administration’s decision to withdraw the U.S. from the Paris Agreement, in effect removing the United States from international climate negotiations.

“I’m gravely disappointed to see the backsliding by the Trump administration on this issue. I guess we shouldn’t be surprised given what President Trump did in his first term, and he threatened to pull us out this time, which he’s now done, but that is not in our interest. In fact, it’s really harmed our ability to protect our own country from the ravages of climate change, and it’s harmed our global credibility as a leader in the world,” he remarks. “It’s going to rebound not just on this issue, but I think in others as well.”

Burns emphasizes the importance of maintaining substantive communications with China even when the two countries disagree on some major issues “because I think it’s fair to say this is our most important diplomatic relationship in the world. What happens in this relationship is going to drive a lot of history, our global history, in the next decade, two or three.”

Finally, Nick Burns urges that students from the Harvard Kennedy School and elsewhere should consider a career in the civil service, even if they are currently disenchanted with the present political environment in Washington.

“We need good men and women to go into public service in our country, to serve in the military, in the federal government, and especially in the State Department as we engage countries around the world. And I think that the pendulum will swing back towards an appreciation for nonpartisan public servants,” he says. “We’ve got to show the rest of the world and our own countrymen and women that we’re as committed as they are to taking on the challenge of climate and to meeting it the only way that’s going to be effective working with other countries, including China. So, if you’re a young person listening, trying to figure out what you want to do with your life, there’s so much good you can do.”

For this and much more, please listen to my complete podcast conversation with Nick Burns, the 67th episode over the past five years of the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunesPocket CastsSpotify, and Stitcher.

Share

Early Impacts of Trump 2.0 on Domestic Climate Policy

In my podcast series, “Environmental Insights: Conversations on Policy and Practice from the Harvard Environmental Economics Program,” I’ve had the pleasure of engaging in conversations with environmental economics scholars who have also had significant experience in the policy world.  My guest in the most recent episode is a great example of this, because I was joined by Joseph Aldy, my colleague at the Harvard Kennedy School, where he is the Teresa and John Heinz Professor of the Practice of Environmental Policy.  Joe’s research focuses on climate change policy, energy policy, and regulatory policy, and, importantly, from 2009 to 2010, Joe served as Special Assistant to President Barack Obama for Energy and Environment, which game him significant experience both in the economics and the politics of climate change policy.  You can listen to our complete conversation here.

This was Joe’s second visit to the podcast, the first having been in November of 2019, in what was the 7th of 66 episodes we’ve now produced.  I believe he was the first guest to come back for a return visit, and the reason why I double-dipped was that when I decided to ask someone to assess what has happened and will happen in the second Trump administration’s first 100 days, particularly in regard to domestic environmental, energy, and climate policy, Joe Aldy was my first choice.  (I emphasize domestic policy, because I’ve already written in two recent blog essays about what to expect in the international domain, but not in the domestic domain:  The Evolving China-USA Climate Policy Relationship; and What Trump’s Exit from the Paris Agreement Will Really Mean.)

We’re about half-way through the first 100 days of this new administration (although it feels like it’s already been several years).  So, before we discussed Joe Aldy’s expectations for the next two to four years, we focused on what has already happened. 

Aldy begins by describing how the Trump administration has moved quickly on many fronts using numerous executive orders, rolling back regulatory policies, and creating a National Energy Dominance Council to confront what it has termed a “national energy emergency.” 

“It’s a little bit of a challenge to say we’re actually dealing with a kind of energy emergency that was described by the President because we’re producing more energy now than we ever have.  When we look at the fact that we’re at record highs in oil production, gas production, and renewable power production on the supply side, we’re not necessarily facing what one might think of as an emergency when it comes to energy.”

Aldy goes on to note that he is alarmed, however, by some of the brazen early moves the administration is making in the energy and climate space.

“We see efforts going on now that I think are potentially more fundamental in undermining the ability of the federal government to regulate greenhouse gas emissions. Tasked on day one to EPA was to assess the prospect of undoing the Endangerment Finding under the Clean Air Act. That’s the necessary foundation [for] the EPA [to exercise its] authority to regulate greenhouse gas emissions,” he says. “They’re moving in that direction, and a lot of this is going to end up in the courts.”

But Joe contends that the courts may not be so sympathetic toward the administration. 

“Part of the response from those who want to slow this kind of retrenchment when it comes to clean energy and climate policy is to litigate, and some of what is happening is happening so fast. I mean, we saw this in Trump 1.0 where some things they try to do very quickly. What they did was not consistent with the process that is established under law that you’re supposed to follow, or you will be found to have been in the language of the Administrative Procedure Act that governs how we implement the administrative state, ‘arbitrary and capricious.’ You lose in the courts on process grounds, not even on the merits.”

Aldy also argues that the administration seems to be pursuing a number of countervailing objectives using a variety of tools that will cause unintended consequences.

“The prospect of tariffs generally really interact with an agenda focused on trying to advance oil and gas development in the United States. If we are going to put tariffs on imported steel [the price of oil extraction will go up],” he remarks. “So, [when] importing crude oil, natural gas, or electricity from Canada… with tariffs, [it will] make [those] more expensive domestically and affect… both the business case for using energy as well as the domestic politics about energy.”

The clean energy tax credits contained in the Inflation Reduction Act may also be in jeopardy, Aldy observes, although he admits there may be pushback from some Republicans representing areas where the tax credits have positive economic impact. And those may be key votes, Aldy says, when the president’s proposed tax cuts come before Congress.

“I think there were more than a dozen Republicans who voted against the tax bill, the Trump tax cuts of 2017, in the House of Representatives. They can’t lose a dozen votes this time. It’s a much tighter margin. And so, there’s a question about, is there sufficient support for sustaining at least some clean energy tax credits going forward?”

Importantly, Joe notes that even if the administration is successful in efforts to slow down the clean energy transition, it won’t be able to stop it altogether.

“The clean energy economy in the U.S. is so much more advanced now that signing executive orders doesn’t affect the 30-plus gigawatts of solar that was installed last year. It doesn’t affect the fact that we have been installing more wind power every year for the past decade than we have natural gas in terms of incremental capacity investment. All… the people who recently bought EVs, they’re still going to drive their EVs. We’re still going to produce power from these renewable power facilities,” he argues.

“I think that we’re going to see more and more business investment, because the business case for clean energy is getting better and better, even if the policy environment is getting more uncertain,” he says. “It means that the worst-case scenario, at least in terms of what happens to our emissions and our energy economy, is basically like stasis. We need to accelerate if we’re going to be up to the challenge of the problem, but I think we will just find ourselves treading water for a while. The challenge is whether or not there’s really bad spillovers to other countries.”

For this and much more, please listen to my complete podcast conversation with Joe Aldy, the 66th episode over the past five years of the Environmental Insights series, with future episodes scheduled to drop each month.  You can find a transcript of our conversation at the website of the Harvard Environmental Economics Program.  Previous episodes have featured conversations with:

“Environmental Insights” is hosted on SoundCloud, and is also available on iTunesPocket CastsSpotify, and Stitcher.

Share