<a href="http://www.gmagazine.com.au/blogs/leon#">The Business of Green</a>

The Business of Green

Money matters in the green world, by Leon Gettler.

Two wheeled subsidies?

electric bike

Credit: Flickr / thingermejig

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The auto industry is in serious trouble with Chryler being put into bankruptcy, General Motors expected to follow suit and the US industry now on life support with billions of dollars of taxpayers money propping it up.

Generally, the industry’s woes continue with Toyota about to announce its first annual net loss, Ford reporting a loss and Honda and Nissan hit hard by declining sales.

The recession is hurting car sales but that might also reflect a deeper change. Many people are now changing their lifestyles because of climate change and petrol prices.

One of the most interesting trends now is towards electric bikes which are classified as zero-emission vehicles. Should governments subsidise this shift?

The Italian government has already started handing out subsidies for people to buy electric bikes. The Italian government pays 30 per cent of the retail price. More in this report here.

The Economist reports that 21 million electric bikes were sold in China in 2008 and 800,000 are sold every year in South East Asia. Much better than those scooters you see darting around the place in those cities.

The question is why aren’t electric bikes in developed economies?

As The Economist says, western governments aren’t interested in them. Our roads aren’t designed for more two wheeled transport and there’s nowhere safe to park electric bikes. Still, it might be cheaper for governments to subsidize them than pouring money into the auto industry. That could be an effective strategy to deal with the climate crisis.

Are electric bikes the answer? What should governments do to encourage us to buy them? Should they do what the Italian Government is doing, or should they give us the infrastructure? What do you think?