Why no country should promote a specific type of alternative fuel

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Governments here in the U.S. have offered some significant incentives for purchasing green vehicles. Buyers can get up to $7,500 off an electric vehicle, thousands off on hybrids and even deeper discounts in select states. Though incentives here in the States are relatively strong, China has taken rebates to the next level.

Not so fast, says Automotive News, warning that plug-in vehicle incentives and China don't mix. AN says more than a year has passed since China announced its massive rebate program, yet plug-in vehicles are "virtually nonexistent" over there. Now, policymakers in China are rethinking the failed incentive program. According to AN, China would by wise not to favor a single type of alternative-fuel vehicle.

Rather, nations should take an all-or-nothing approach. What AN means by this is that governments should either subsidy all types of alternative-energy vehicles or not offer any rebates at all. Why? Well, AN says that by subsidizing a single type of alt-fueled vehicle, automakers will focus on developing that specific kind of vehicle and ignore other technologies that could potentially hold the key to future. There's some sort of logic there, but there is also some sense in promoting something that works, no?

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