Alternative Fuel Vehicles: Should the Federal Government Bridge the Economic Gap?

Cynthia A. McFadden

doi:10.4271/981176

1998-02-01

Alternative Fuel Vehicles: Should the Federal Government Bridge the Economic Gap? 981176

The future of Alternative Fuel Vehicles (AFVs) is uncertain because consumer demand for them has not been established. AFVs are environmentally friendly and have the potential to provide short, mid, and long term solutions to the United States' problem of dependence on foreign sources of oil. At this time, however, there is little economic incentive to encourage consumers to purchase AFVs.

The federal government has taken the lead in establishing a market for AFVs by mandating their purchase across federal and state vehicle fleets. In addition, the government has offered incentives to automobile manufacturers to encourage the production of AFVs. The government has also established consumer awareness programs which are educating the public about the benefits of AFVs.

It is basic government research, however, which is the key to maximizing the long term potential of AFVs. Currently, AFVs can provide protection from potential short term oil spikes and alternatives to increasing oil prices. Eventually, they will be able to alleviate a major portion of this country's dependence on foreign sources of oil. If the government continues AFV research and development programs, a market for AFVs will develop, and their maximum potential benefits could be realized.

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Alternative Fuel Vehicles: Should the Federal Government Bridge the Economic Gap? 981176

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