John D. Graham

This article examines the rise and recent decline of Tesla in the U.S. electric vehicle market. Using qualitative, semi-quantitative, and statistical methods, the article traces how Tesla acquired a first-mover advantage and how second movers, both established automakers and start-ups, responded to Tesla’s rise. The recent decline in Tesla’s share of the U.S. electric vehicle market is linked to several factors: the proliferation of electric vehicle offerings from competitors, changes in public policy, and controversial decisions by Tesla and its CEO. The article concludes with a discussion of promising future strategies for both Tesla and its competitors.

Considering the quest to meet both sustainable development and energy security goals, we explore the ramifications of explosive growth in the global demand for lithium to meet the needs for batteries in plug-in electric vehicles and grid-scale energy storage. We find that heavy dependence on lithium will create energy security risks because China has a dominant position in the lithium supply chain and both Europe and North America seek to curtail reliance on China throughout their supply chains. We also find that efforts to expand lithium mining have been much less successful in Chile, the United States, and Europe than in Australia. Local communities resist licensing of new lithium mines due to a variety of environmental, social, and economic concerns. There are alternative technologies that may make lithium mining more sustainable such as direct lithium extraction, but the timing of commercialization of this process is uncertain. Progress is also being made in battery recycling and in alternative battery designs that do not use lithium. Such advances are unlikely to attenuate the global rate of growth in lithium demand prior to 2030. We conclude that tradeoffs between sustainability and energy security are real, especially in the next decade.

The transition to plug-in electric vehicles is examined from the consumer’s perspective. Since risk-averse consumers perceive disadvantages as well as advantages, consumers are reluctant to choose electric propulsion without significant nudges from the government. Norway, California, Germany and China are analyzed to determine why and how electric vehicles are promoted by public policies. Each jurisdiction has accomplished rates of electric-vehicle penetration that are far above the global average. This success is largely attributed to various policies which range from vehicle mandates, producer and/or consumer subsidies, or taxation in respective regions—otherwise PEVs remain relatively unappealing to risk-averse consumers. Demand and supply side policies have been effective tools in spurring adoption of the new electric propulsion system. Norway is one notable jurisdiction that has PEV penetration exceeding 80% of new vehicle sales despite no supply side incentives. Germany has recently surpassed California and China in PEV penetration rate, though all three jurisdictions exceeded 10 percent by 2020 or early 2021. Research is recommended to identify ways to encourage consumer adoption of electric vehicles.

This paper examines whether public perceptions of the claimed advantages and disadvantages of fracking are consistent with an evidence-based assessment of the claimed advantages and disadvantages. Public assessments are obtained from an internet-based opinion survey in 2014 in six states: California, Illinois, New York, Ohio, Pennsylvania, and Texas. The survey presented eleven advantages and eleven disadvantages of fracking derived from local media stories, from advocacy claims made by pro- or anti-fracking groups, and from think tank pieces. Then the respondents were asked to indicate their feelings about how important each claimed advantage and disadvantage was to their support of/opposition to fracking. Scientific assessments regarding the same claims are compiled from available peer-reviewed literature and evidence-based reviews. We classify each claim as either (a) supported by the weight of the available evidence, (b) not supported by the weight of the available evidence, or (c) there is inadequate evidence to assess it. We find less consistency with respect to the disadvantages than advantages. Respondents perceive four disadvantages out of eleven as extremely important while there is inadequate evidence to assess them or the available evidence does not support them. Our comparison has interesting implications for understanding the controversy about fracking.

For decades, a strong case has been made for comprehensive reform of the U.S. federal government’s regulatory processes (for early contributions, see Weidenbaum & DeFina, 1978; Lave, 1981; Breyer, 1982; Harrison & Portney, 1983; Litan & Nordhaus, 1983; Viscusi, 1992; Breyer, 1993; Sunstein, 1996; Graham, 1996, 1997). Establishment of centralized Office of Management and Budget (OMB) oversight through the Office of Information and Regulatory Affairs (OIRA) was an important achievement, but Congress has not yet passed comprehensive regulatory reform legislation.

In 2016, China became the third largest producer of shale gas in the world. The Chinese central government has been supporting shale gas development since 2011. There are hopes that shale gas development, along with major efforts in renewable energy systems, can bring a fundamental change in the nation’s current coal-dependent energy system. Numerous challenges have slowed implementation including resistance to development of the industry by local residents living near shale gas sites. A significant body of research has examined the effectiveness of incentives in changing risk perceptions and attitudes toward the siting of industrial projects in the Western context. The present research identifies whether governmental incentives increase the extent of local support for shale gas projects in the Chinese context. Specifically, this paper strives to study two types of incentives: direct compensation to households bearing the potential negative impacts of shale gas projects and, household compensation accompanied by allocation of a portion of the shale tax revenues to local communities where the development occurs. An online survey with an embedded experiment was designed and conducted in August 2016 in five Chinese provinces where there are current or future shale gas projects. The experiment shows that household compensation alone or in combination with community reinvestment significantly increases local support of shale gas projects. Further, we found that the respondents most likely to be supportive after the experimental treatments are those who are young, more highly educated, have higher income, and perceive themselves as living close to a project. This research sheds light on how incentives might help contribute to resolution of siting controversies or prevent the onset of such controversies.

Although federal regulation of vehicle fuel economy is often seen as environmental policy, over 70% of the estimated benefits of the 2017–2025 federal standards are savings in consumer expenditures on gasoline. Rational-choice economists question the counting of these benefits since studies show that the fuel efficiency of a car is reflected in its price at sale and resale. We contribute to this debate by exploring why most consumers in the United States do not purchase a proven fuel-saving innovation: the hybrid-electric vehicle (HEV). A database of 110 vehicle pairs is assembled where a consumer can choose a hybrid or gasoline version of virtually the same vehicle. Few choose the HEV. A total cost of ownership model is used to estimate payback periods for the price premiums associated with the HEV choice. In a majority of cases, a rational-choice explanation is sufficient to understand consumer disinterest in the HEV. However, in a significant minority of cases, a rational-choice explanation is not readily apparent, even when non-pecuniary attributes (e.g., performance and cargo space) are considered. Future research should examine, from a behavioral economics perspective, why consumers do not choose HEVs when pricing and payback periods appear to be favorable.

Unconventional gas development (UGD) is growing rapidly in the United States. Drawing on insights from risk perception and risk governance theories and recent public opinion surveys, we find that UGD is an emerging technology that is likely to be perceived as risky, even though objective risk assessments suggest that risks are low and controllable through best risk management practices. Perceived risk varies significantly depending on the state and locality but perceptions of risk appear to be increasing as the technology is used more widely in the United States and as organized opponents of the technology intensify their efforts. Risk perceptions are attenuated somewhat because of the perceived benefits of UGD and compensation schemes for individuals and communities. The types of triggering events necessary for large‐scale social amplification and stigmatization have not yet occurred but awareness of UGD is growing and organized opposition has been sufficient to cause prohibitions of UGD in some U.S. states and localities. Additional directions for social science research on public reactions to UGD are recommended.

Rising fuel economy standards for motor vehicles and higher road construction costs, coupled with infrequent adjustments to fuel taxes, have eroded the revenue base for road construction and repairs. We use survey data to determine whether the revenue‐enhancement measures being used by policy makers to address the revenue shortfall reflect the public's preferences regarding the distribution of road financing costs. In particular, we explore whether there is public support for the idea that road financing costs should be distributed in proportion to benefits received from roads; that is, the benefit principle. We find that public support for the benefit‐principle ranges from a low of 5 percent to a high of 34 percent, depending on the definition used. We also find evidence that people who support benefit‐principle financing are more likely to agree that the road mileage user‐fee is fair and also more likely to support revenue sources that satisfy the benefit principle. These findings suggest that a mix of revenue sources that vary in the extent to which they satisfy the benefit principle is a responsive political strategy. They also suggest that the low level of support for benefit‐principle financing is partly responsible for the unpopularity of mileage user‐fees. Policy makers who wish to pursue mileage user‐fees as a replacement for fuel taxes should make an effort to educate voters on the advantages of benefit‐based revenue sources.