Could feebates be the way to cheap hybrid cars?

Critics and naysayers of hybrid cars often point to the extra costs of hybrids as a reason that hybrids won't bust into the mainstream of the American auto market any time soon.

These pundits rationalize that Americans are not willing to pay an extra $3000.00 to reduce foreign oil dependency, help fight terrorism, and help clean the environment. Yet, the success of the Toyota Prius is already calling this thinking into question.

While buyers will make the $3000.00 back, it will take about 5 years to recover the $3000.00 in tax savings and fuel costs, and the Big 3 just doesn't believe Americans will accept that recovery time.

It is true that many won't wait, but the success of the Prius, coupled with the adoption of Toyota hybrid technology worldwide, will scale the cost of Toyota hybrids to soon match standard cars, in addition to providing all the incentives of purchasing a hybrid listed above.

And Honda isn't terribly far behind, and the launch of the Honda Accord hybrid car should be another big boost for the world's third largest automaker.

In addition, the Rocky Mountain Institute believes that 'feebates' could additionally help propel fuel-efficient cars into the mainstream.

Recently, Nathan Glasgow told Matt Bivens of Playboy all about the program. "Under this government-administered system, if you buy an efficient car, you get a rebate. If you buy a gas guzzler, you pay a fee. Both would be on a sliding scale according to each car's fuel efficiency. The fees pay for the rebates. For example, the sticker price of a new Hummer would include a fee, and the money raised would help defray the cost of a new Escape hybrid. We estimate that by 2025 fee-bate policies could result in every fourth vehicle on America's roads being several times as efficient as today's cars."

Glasgow believes that by such a time, the average car could easily achieve 100 mpg, and that such programs could get America entirely off oil over the next few decades.

Not a bad idea? Sounds good to me.

In a way, it sounds very much like new programs for corporations to deal with Greenhouse-Gas limits - now receiving much attention as Russia finalizes approval of the Kyoto Protocal.

Recently the Wall Street Journal reported, "Some major corporations, anticipating that they may soon be facing goverment regulations on so-called greenhouse gas emissions at home as well as abroad, are already taking steps to reduce the financial risks of tighter controls and searching for ways to make money on them."

In Europe, markets are already being set up to trade pollution. Essentially, a company which meets guidelines will be able to sell their surplus - the amount they are under mandatory guidelines - to companies that have failed to meet their guidelines.

Of course, amongst others, the auto industry is against the movement.

WSJ reports, "Next week, officials from the utility, auto and oil industries are expected to file a brief supporting the the Bush administration's decision that the administration has no authority to limit emissions of carbon dioxide and other global-warming gases unless Congress gives it that authority."

Obviously, it doesn't appear Detroit would advocate fee-bates, but maybe your Congress person will.

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