Reflecting on Federal Regulatory Policy and the Future of Electric Vehicles

As I’ve discussed previously, the political barriers that exist in the U.S. Congress to the enactment of significant new climate change legislation will likely force the Biden administration to turn, at least in some cases, to regulatory approaches.  This is in addition to the numerous government subsidy programs that are part of the administration’s infrastructure plans, some of the most important of which are for diffusion of electric vehicles (EVs).

So, this is a particularly opportune time to reflect on the role of federal regulatory policy, as well as the outlook for EVs.  For that purpose, an exceptionally qualified observer is my newest podcast guest, Dr. John Graham, Dean Emeritus and Professor at the Paul O’Neill School of Public and Environmental Affairs at Indiana University, and former Administrator of the Office of Information and Regulatory Affairs (OIRA) in the U.S. Office of Management and Budget (OMB).

You can hear our complete conversation in the podcast here.

In these podcasts – “Environmental Insights: Discussions on Policy and Practice from the Harvard Environmental Economics Program – I talk with well-informed people from academia, government, industry, and NGOs.  John Graham obviously fits perfectly in this group, with tremendous experience both in academia and government.

John Graham is Dean Emeritus – and still a professor – at the Paul O’Neill School of Public and Environmental Affairs at Indiana University.  Previous to that, he was Dean of the Pardee RAND Graduate School in Santa Monica, California.  And before that, he served in the George W. Bush administration as the Administrator of OIRA.  And prior to that, he was a professor at the Harvard T.H. Chan School of Public Health in Boston, where he founded the Harvard Center for Risk Analysis.

In our podcast conversation, Dr. Graham offers his thoughts on Regulatory Impact Analysis, federal energy policy, domestic climate change policy, and electric vehicles.  He also talks about his early experiences in the Bush 43 White House, where he and his team had to make the case to the President to increase the stringency of Corporate Average Fuel Economy (CAFE) Standards at a time when the Vice President was opposed.

“We had to actually go into the Oval Office and make our case to President Bush. And when I did so, it was apparent that the president and the vice president were not totally on the same page on this issue, but we were able to persuade the president to move forward and we did so, and now it’s a very important part of the program that the federal government has on fuel economy and on carbon dioxide control,” he says.

Graham, whose Ph.D. dissertation was on the topic of automobile airbag technology, also discusses his new book, “The Global Rise of the Modern Plug-In Electric Vehicle: Public Policy, Innovation, and Strategy,” which outlines the significant ways in which the wide use of electric vehicles will influence our daily lives, economies, urban air quality, and global climate change.

“When I was working for George W. Bush, we were very convinced that the electric vehicle was not a very cost-effective technology, and we resisted strongly California’s efforts to mandate so-called zero-emission vehicles, and they really had in mind electric cars,” Graham explains. “But what has happened is the spillover of lithium-ion battery technology from consumer applications to the auto industry, [and the extent to which it] is now creating enormous excitement and innovation in the auto sector, and that’s the stimulation for the book.”

Graham predicts that electric vehicles will play a significant role in the future of transportation.

“The transition from the internal combustion engine to electric propulsion is in fact underway and irreversible seeds have been set to make this happen. However, the pace of the transition is going to move at very different rates in different parts of the world, and a lot of this depends as much on politics as it does on markets,” he says.

John Graham explains that Norway is leading the world with electric vehicles, making up 80 percent of the nation’s new car fleet. That compares to ten percent in Germany and the UK, and approximately three percent in the United States. Production in the USA will grow, Graham argues, once appropriate government policies are in place.

“This is one of these cases I find it fascinating where the industrial policy strategies, which many Western economists regard as in disrepute … are in fact the standard approach to making a big change in an industry like this, and I think that’s what’s going to have to happen. Now the details about whether the Biden Administration gets it right, it’s far too early to judge.”

My complete conversation with John Graham is the 23rd episode in 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 iTunes, Pocket Casts, Spotify, and Stitcher.