Despite the millions of dollars being thrown toward them, government programs that provide rebates to hybrid vehicle buyers are not worth the investment, a University of British Columbia study has found.
"If the intention of rebate programs is to replace gas guzzlers with hybrids, they are failing," said Ambarish Chandra, a professor in the school's business faculty and study co-author.
'Rebates are not changing behaviour — they are subsidizing planned purchases.'—UBC Prof. Ambarish Chandra
Encouraging the purchase of hybrids over conventional compact fuel-efficient cars isn't having much of an environmental impact in absolute terms, he said.
"People are choosing hybrids over similarly priced small- and medium-sized conventional cars, which are not far behind hybrids for fuel efficiency and emissions," Chandra said. "The reductions in carbon emissions are therefore not great."
And there's slim evidence that the rebates are the main incentive for hybrid buyers.
"Our estimates indicate that two-thirds of people who buy hybrids were going to buy them anyway," said Chandra. "So for the majority, rebates are not changing behaviour — they are subsidizing planned purchases."
And the higher the rebate, the more inefficient it becomes. "When B.C.'s rebate jumped from $1,000 to $2,000 in 2005, the actual cost of reducing carbon emissions more than doubled," he said.
The Ford Fusion Hybrid is seen at the Ford Product Design Center in Dearborn, Mich., in November 2008. Consumer rebate programs for hybrid vehicles are available in 13 states and five provinces. (Carlos Osorio/Associated Press) Every $1,000 increase in a provincial subsidy led to about a 31 to 38 per cent increase in the market share for hybrids, the study found.
Thirteen U.S. states and five provinces currently have some sort of rebate program, and a federal incentive was in effect in 2007-08.
On average, rebate programs in Canada spend about $195 from government coffers for every tonne of carbon that is reduced as a result. Governments might be better off economically and environmentally by investing in green technology and carbon offset credits, which cost anywhere from $3 to $40 per tonne.
Hybrids no panacea
Hybrid rebates help governments to appear environmentally progressive, Chandra said. But some programs are basically just bailouts for specific industries, he said.
Last month, Ontario increased the maximum rebate for purchasing a plug-in hybrid vehicle to $10,000.
"The criteria for Ontario's recent rebate increase seem designed to benefit domestic manufacturers, especially General Motors," he said. "The biggest rebates will be given to purchasers of the Chevy Volt, rather than other hybrids like the Toyota Prius."
The study analyzed Canadian vehicle sales data from 1989 to 2006 to compile the results.
