The cost of the Iraq War and Recon­struc­tion to the US is going to sur­pass $350,000,000,000. That’s $350 bil­lion dol­lars. A far cry from the orig­i­nal esti­mate of $50 bil­lion. This same admin­is­tra­tion in 2000 decided not to sign the Kyoto Pro­to­col cit­ing that its flawed (which I agree—the biggest flaw being the exemp­tion of both China and India) and that it’s too expen­sive. Expen­sive because the admin­is­tra­tion esti­mated the total cost would have been $325 bil­lion over decades and would’ve hurt the US econ­omy. This admin­is­tra­tion, by start­ing a war and try­ing to clean up after itself, has spent well in excess of that in just 3 years! I doubt any num­bers from Bush’s admin­is­tra­tion can really be trusted. (Remem­ber this is the most secre­tive admin­is­tra­tion in US his­tory.) So I’m sure the orig­i­nal cost esti­mate of becom­ing a more envi­ron­men­tally friendly coun­try is grossly over-estimated. Besides, never doubt the capa­bil­ity of com­pa­nies to inno­vate, reduce costs, and find loop­holes, even when faced with new reg­u­la­tions. The Kyoto Pro­to­col will detri­men­tally affect the US econ­omy? I doubt that. Not as dras­ti­cally as this par­tic­u­lar war has by divert­ing money bet­ter spent elsewhere.

Now, there was a big loop­hole in the US tax code in 2003. This allowed a small busi­ness owner to get a $100,000 tax credit for the pur­chase of a vehi­cle over a cer­tain gross vehi­cle weight. An unin­tended effect was that cer­tain gas-guzzling SUVs, for exam­ple the Hum­mer, qual­i­fied and buy­ers would see a sav­ings of nearly $20,000 on their pur­chase. What was the max­i­mum tax credit for an elec­tric vehi­cle? $4000. How many Hum­mers have I seen embla­zoned with a com­pany logo? I lost count. How many EVs have I seen with logos? Zero. The more inter­est­ing num­ber would be the num­ber of small busi­ness own­ers who bought a truck through their com­pany for busi­ness and per­sonal use—the busi­ness use being com­mut­ing to and from work. Good news is that some­thing is being done about it.

So here we have a gov­ern­ment that is putting $20,000 back into the pocket of small busi­ness own­ers who are incen­tivised to pur­chase SUVs and trucks with poor gas mileage. This dri­ves up demand (less fuel effi­cient cars equals more gas to go the same dis­tance of a more effi­cient car) and in com­bi­na­tion with other fac­tors (like a war that reduces sup­ply) dri­ves up prices which makes oil a valu­able com­mod­ity. This then makes oil attrac­tive to ter­ror­ists who are orga­nized enough to steal oil and resell it for a decent profit. That is an overly sim­pli­fied and ten­u­ous argu­ment but there’s cer­tainly enough cause and effect to see that US con­sump­tion of oil helps fund ter­ror­ism. This is why it’s been said that a more effec­tive way to fight ter­ror­ism is to reduce our demand for oil. Don’t tell me you haven’t seen those “For­eign Oil Funds Ter­ror­ism” bumper stickers?

I had pointed out the Tesla Road­ster in an ear­lier post, an all-electric, high-performance sports car. This com­pany has col­lected $60 mil­lion dol­lars in ven­ture cap­i­tal of which only $25 mil­lion dol­lars went into R&D. Of that $25 mil­lion dol­lars, the pro­to­type vehi­cle cost $350,000. The Tesla Road­ster has a street price of $100,000. Tesla motors is also plan­ning on a $50,000 4-door sedan which is at the same price point of an H2 Hummer.

Imag­ine if that $350,000,000,000 were spent in an indi­rect anti-terrorist cam­paign through anti-oil rather than a direct anti-terrorist cam­paign. If the $100,000 tax break were applied to EVs, that $50,000 sedan now becomes a more rea­son­able $30,000 sedan. That could gen­er­ate a poten­tial demand of 17,500,000 cus­tomers while the incen­tive was active. That would be a record set­ting num­ber. Another option would be to pro­vide tax incen­tives for car man­u­fac­tur­ers, reg­u­late emis­sions (Cal­i­for­nia did it and the EV1 was born), or sim­ply direct fund­ing of R&D. See­ing as the Tesla Road­ster was devel­oped on a bud­get of 0.007% of the cost of the war, all that money could have funded the R&D depart­ments of 14,285 indi­vid­ual com­pa­nies all work­ing to ween us off oil! 14,000 new com­pa­nies goes a long way to curb­ing unem­ploy­ment, cre­at­ing new tax rev­enue, and improv­ing the econ­omy. Of course these num­bers are ideal and would be much less in real life. Still, money spent this way would’ve been more ben­e­fi­cial and even more effec­tive than how it’s spent now.

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