The E-bike incentive

This week Deputy Jeune announced the second tranche of the government’s e-bike incentive scheme

I know that the scheme attracts some opposition, and I wanted to address some of the questions that have been raised.

Question 1: Why are you subsidising the purchase of e-bikes by people who are already “relatively well off”, and could afford them without the incentive?

There are two arguments to make. The first gets to the heart of a really important point regarding the journey to net zero. Government cannot fund the transition to net zero on its own. It needs the public to spend their money on low or zero carbon technologies. At the moment, that isn’t happening fast enough. Therefore we need to incentivise people to make purchases that they currently are not making (or to change their behaviour – catch the bus rather than drive). 

In crude terms experts suggest the split we need is roughly 50:50 – if government is going to spend let’s say £300 million on the journey to net zero over a set time period, we need the public to spend about the same amount. The e-bike subsidy is approximately 15% of the cost of an e-bike; for that, a member of the public is incentivised to spend 85% of the cost of the bike. 

In short, the transition to net zero rests to a very significant degree on persuading those who have the financial resources to spend them on zero carbon options. Our incentive schemes are designed to motivate those purchase decisions. A small government contribution leverages a much larger contribution from the public.

The second point is the assumption that the people taking up the incentive could afford them without the incentive. Whilst this may be true for some (and all grant schemes are open to this criticism) it is unlikely this is the case for everyone taking up the grant. It is also worth point out that 85% of the cost of an e-bike is a relatively small amount comparing to say 2 years annual bus passes or filling up the tank of an older, inefficient car over a few months – the type of transport options someone less ‘well off’ may be using as their current primary transport choice. I believe the scheme will encourage some people to think about using a bicycle as an alternative to a car, and that it is cost effective over time compared to filling up a car and paying for parking daily or even using the bus.

Question 2: How do you know that the ebikes that are bought are actually being used on the island, and are replacing carbon miles?

We don’t know for absolute sure in every case. But these are reasonable assumptions based on past experience and experience elsewhere. There are calculations that work out the average mileage for an e-bike over its expected lifespan, and these mean we can roughly calculate the non carbon miles that each voucher will deliver.

It is possible someone could take an e-bike over to their holiday home in France (the oft quoted example from the previous e-bike subsidy scheme). If they do, there’s a good chance they’ll bring it back to Jersey – if they have a need for an e-bike in France, they probably have a use for it in Jersey too.

It’s sometimes said that we shouldn’t incentivise e-bike purchases that are just for leisure – the subsidy needs to be focused on commuting. To some extent we deal with this by not allowing vouchers to be used for e-mountain bikes. But more generally, I don’t agree we should focus entirely on commuting. There are people (I’m one of them) who already use a bicycle to commute. I drive for all the other stuff in my life. An e-bike that was used to replace shopping trips, visits to friends, going to parish meetings etc would get my carbon footprint down. 

Perhaps the biggest argument in this area is that people may use the vouchers to buy e-bikes that they were already going to purchase – we’ve not created many additional purchases. There may be some vouchers that fit into that category. But think about it for a moment. We had about 1800 applications for the first tranche of vouchers. Those are people who by definition have an unmet desire to buy an e-bike (otherwise they’d have already bought one). A small proportion of them may have coincidentally been planning to definitely make a purchase in the first few months of this year anyway. But more likely is that a significant number were tempted by the idea of an e-bike, but wanted something to nudge them over the line. That’s what the incentive does – create that little extra push to do something that was maybe floating around in someone’s mind, but becomes definite when there’s a financial incentive.

Question 3: Why doesn’t the subsidy extend to ordinary push bikes?

The thinking here is simple; anyone can go to Acorn or Hospice or various Facebook pages and find second hand bicycles for £50 or less. Price is not a significant barrier to the purchase of a bicycle. It is with an e-bike, and particularly so with cargo e-bikes which are often in the £3000+ barrier. Until we have a well developed second hand market in e-bikes (which the incentive scheme will accelerate), price remains a significant barrier to the adoption of e-bikes.

Question 4: Why are you starting your net zero journey with E-bike vouchers, wouldn’t other subsidies help a broader range of more people reduce their “carbon miles”?

It’s really important to understand that although the e-bike incentive scheme is the “first out of the blocks”, other incentives are coming. It’s part of a matrix of policies that will build up over the next couple of years. In terms of transport, we are working on various ways to subsidise shared transport options. There is of course already significant subsidy for the bus service and there might be the potential to do more. We are absolutely committed to a “just transition”, as defined in the carbon neutral roadmap. That will involve many different policies; at the moment only one of them is “out there” – more are coming and then I hope we can be judged on the full range of policies.

Question 5: Why is the scheme only available for use in local shops, when they are more expensive than the UK?

I don’t think it would be appropriate to offer subsidies where the money “leaked” off island, nor do I think it would have widespread public support. A subsidiary benefit of this policy is that it will hopefully support local bicycle retailers at a time when many retail functions are under pressure from internet shopping. From my point of view, I hope we are able to maintain a network of bicycle shops/workshops, because their expertise and services will make a valuable contribution in supporting islanders in the transition to low carbon transport options.

Concluding comments

One of the advantages of a quarterly allocation of vouchers is that it allows us to tweak the scheme in the light of experience and policy goals. For example, this quarter focuses more heavily on e-cargo bikes.

We will need to review the extent to which vouchers that have been received are actually being spent, and work out if they are not being used in the way we want, why that is. Because the money for the scheme has already been allocated to the climate emergency fund, we can move quickly if we feel that the policy needs changing, or if it isn’t achieving its policy goals. What I would say though is that I am pleased we have put in place this scheme before we put in place an EV incentive scheme – given our transport hierarchy it would have been hard to justify an EV scheme without one that also incentivised private active travel.

I accept we won’t get everything right. That’s because there are no perfect policies – they all have advantages and disadvantages. Getting the right mix is a judgement call, based on a whole range of considerations, including what’s worked in the past, what works elsewhere, the resources we have available, the speed with which a policy can be enacted, the interaction with other policies and so on.

If anyone feels there are other significant questions I haven’t answered, by all means get in touch.

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