The use of targets as a policy tool hasn’t always been effective, to say the least.
Targets set in the NHS are a case in point. In a bid to hit top-down targets introduced in 2004, demanding that emergency patients be seen in under four hours, cases abounded of simply moving patients to other units, making patients wait in ambulances, discharging people too early and/or miscoding data. While the policy certainly moved things in the right direction, these side effects obviously posed questions about whether it was the right method. Looking beyond the NHS, there have been complaints more broadly about arbitrary targets being process-oriented rather than focusing on the outcome (and thereby ignoring other possible means of reaching that outcome that are more efficient).
So should we abandon targets entirely? Perhaps not. In fact, clear targets can drive meaningful progress, hold governments to account and mobilise the private sector to innovate. They reduce the ambiguity surrounding policy issues and direction of travel, and are a means by which to communicate priorities clearly. Targets just need to be properly propped up by facilitating policies and a clear sense of direction.
The example of suddenly proliferating electric vehicles is illustrative of how targets can be a force for good.
Electric vehicles, like most technologies, have had a bumpy start, and in 2010, had a 0% market share. In spite of the significant percentage of transport emissions in global carbon emissions, and the fact that road transportation specifically makes up much of that, the uptake of EVs was incredibly low. For one thing, EVs have a higher upfront cost, which might scare some consumers off. Charging is also a perceived inconvenience, particularly when the nearest charging point might be some distance away from a consumer’s home or workplace. In China, many consumers are further deterred for fear of their car batteries literally going up in flames.
Against this backdrop, and what was therefore a rather bleak outlook for the future of EVs, things have quite suddenly and dramatically changed. The cause for this shift is at least in part target-based policymaking. Governments realised that something dramatic needed to give in order to facilitate Net Zero ambitions in the run-up to COP26, and electric vehicles became a useful means of getting there. As such, in November 2020, the UK government declared the end of the sale of new petrol and diesel vehicles by 2030. The EU and Canada have put in place similar bans for 2035. Predictably, manufacturers have since largely fallen in line: Volvo has declared plans to stop manufacturing internal combustion engines by 2030, and General Motors will be phasing out petrol and diesel vehicles by 2035.
If the mandated ban on sales of such vehicles was the stick, there have also been plenty of carrots to help see the target met. Governments have worked to create both supply and demand to facilitate the desired trajectory of the market. On the supply side, the EV market has received millions in funding to prop it up while still in its fledgling state; in the US, Tesla received a $465 million loan for a Department of Energy programme and the state of Nevada provided over a billion dollars in tax breaks and other incentives for a new Tesla Gigafactory. On the demand side, consumers have had various incentives become available to help them overcome initial reservations about EVs. The UK Department for Transport spent £1.2 million per week in 2020 lowering the costs of new Tesla cars for drivers. These perks work. YouGov polling found that 27% of consumers were considering switching to EVs because of tax benefits, and another 20% because of parking benefits (i.e. having access to a much sought-after parking space while charging takes place).
The result of these policies (and the growth of the market that it spurred) has been striking. Global sales of electric vehicles doubled in 2021, with more now being sold each week than in the whole of 2012. And the success of such targets (and subsequently the EV market) is by no means restricted to the West. Three years ago, China set a goal of seeing 20% of new vehicle sales be EVs by 2025. Through a combination of tax incentives, pilot programmes with cities and ‘five year plans’, it had already surpassed this target by December 2021, and is now setting more new ambitious ones.
So perhaps let’s not give up on targets just yet. Targets that are clearly defined and focused on policy objectives, with underpinning incentives and penalties, and that have multi-stakeholder commitment to delivery can work. The success of electric vehicles demonstrates that.