The announcement, made at a Daimler plant in North Carolina, shows a key commitment from Obama, clearly promoting green policies in important states during an election year.
The plan is part of a series of recent announcements such as the EV-Everywhere challenge, promoting Research and Development into electric vehicles and new members of the National Clean Fleets partnership, where companies can gain support and advice from the government to reduce the use of petroleum.
Obama wants to reduce dependence on foreign oil
Brent Crude Oil future price, January 2010 to date.
The key reason given for this policy is to reduce America’s reliance on fossil fuels, particularly those that have to be imported citing the statistics that the US produces only 2% of world oil reserves but consumes around 20%. Fuel prices have been rising, and Obama notes there will continue to be long term upward pressures coming from rising demand in China, India and Brazil and that “there are no quick fixes to this problem”.
He denounced the $4bn of annual subsidies for the oil industry, and explained: “We can't just rely on fossil fuels from the last century. We've got to continually develop new sources of energy.” Together with expanding alternative sources of energy, Obama’s plan includes using less fuel. This solution will both reduce dependency on fossil fuels and foreign imports and should also save people and businesses money.
Plan to support alternative vehicles
The plan is to incentivise 10-15 communities to invest in the infrastructure needed to support these alternative vehicles. An important part of this is that it will be “fuel neutral”, so includes vehicles fuelled by electricity, biofuel, or hydrogen fuel cells, and is potentially open to new technological developments. The plan will therefore promote electric plug in stations, or biofuel pumps, and will also support policies to incentivise people to buy and use these alternative vehicles.
Another plan announced is to increase tax credits for those purchasing electric vehicles, there is currently a $7,500 subsidy which Obama wants to increase to $10,000 together with increasing eligibility for the subsidy. This should encourage US sales of alternative vehicles, which have been less than hoped over the past years, with lower than expected sales for GM’s Chevrolet Volt and the Nissan Leaf, which need to grow to meet Obama’s target of 1 million Electric Vehicles by 2015.
Obama also spoke of improving the fuel efficiency of trucks, with tax incentives for commercial alternative fuel trucks. This will work together with the National Clean Fleets partnership, which has just expanded to include companies such as Best Buy and Veolia and gives companies support and advice on alternative vehicle strategies.
Impacts on Green Investment and Environmental Investment
There are clear examples of companies that will be affected by these policies, for example the 18 companies that are involved in the National Clean Fleets partnership including AT&T, Verizon, Coca Cola and PepsiCo. The automotive industry, particularly in America but also worldwide will also be affected as demand for alternative vehicles grows and regulations change. For more on global approaches to this issue see the story: “US Car Emissions Regulations Still Far Behind” or “Number of EVs to increase despite Chevrolet Volt incident”. Key companies in this area include Nissan, Toyota and GM. There are also companies that produce components for these cars, such as Sony or IBM who produce Electric Vehicle Batteries, companies that produce fuel efficient engines and systems include BorgWarner and Bosch, and there are companies that produce the raw materials needed such as Western Lithium Corp.
Overall, this commitment to green policy may have wider reaching implications for green and environmental investing, as regulations and outlooks change to reflect a low-carbon, fuel-efficient future. There are similar schemes for alternative vehicles and fuel efficiency over the world, and there are also commitments to alternative energy and overall emissions, and there are many investment opportunities in these areas.