Quite sensibly, Barack Obama has directed the Environmental Protection Agency (EPA) to overturn the Bush-era decision denying California the right to set higher automobile standards. This is clearly a big deal, since the Californian market is large and important enough to affect the decisions of carmakers around the world.
Higher vehicle standards are definitely a good idea, but another initiative may have a stronger long-term impact: upgrading the energy efficiency of 75% of federally-owned buildings. Not only will the direct effects be large, but such an investment might drive overall green construction investment.
Of course, the real challenge will be getting an effective carbon pricing system into operation. Hopefully, the tougher decisions will be tackled with the same urgency as these easier ones.
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Detroit is complaining about the proposals. This is probably a good sign. If Detroit wasn’t complaining, it would be pretty good evidence that the new standards are absurdly lax. They don’t seem to understand that building inefficient dinosaur cars is one of the reasons for which they are now in such bad shape.
The prior example of CFC regulations is a pretty good illustration of this.
Detroit can meet these standards over night – they likely already do in Europe (i.e. the European Detroit firms – Ford and Vauxhall). Chrysler is talking about a merger with Fiat – there is no lack of access to engines that turn the kind of economy numbers we need. The problem is, Detroit firms think car sales would decline of they had to reduce power figures to meet these efficiency standards. And they are probably right, since the price of oil is so low many people continue to choose high power and high weight cars. Also, those cars allow the biggest markups. When I was working at a Pontiac dealership, the dealer made a few hundred dollars on ever 15k$ car it sold, but many thousand on ever 45k$ car or SUV.
Inefficiency goes into remission
Will state emission standards kill the U.S. car industry?
Posted by Peter B. Meyer (Guest Contributor) at 3:33 PM on 26 Jan 2009
Sunday night The New York Times published, “Obama to Let States Restrict Emissions Standards.” First reaction of those concerned only with a so-called economic recovery: “this will kill what’s left of the U.S. car industry!”
Wrong! This is exactly what the domestic car industry needs. No “car czar” or other federal regulator would be able to push as hard to get more fuel-efficient and lower-emissions vehicles produced in the U.S. faster than regulation-constrained market demand.
How green can California’s cars go?
US President Barack Obama gave California’s environmentalists cause to celebrate when he took a step closer to backing the state’s plans for strict vehicle emissions standards.
The BBC’s Rajesh Mirchandani looks at whether the technology required is feasible and if drivers would pay for it.
UPDATE 3-U.S. to unveil new policy on auto fuel standards
Mon May 18, 2009 7:17pm EDT
By John Crawley and David Alexander
WASHINGTON, May 18 (Reuters) – The White House will unveil an auto fuel efficiency proposal on Tuesday to resolve a dispute between California and the U.S. government over emissions and accelerate the timeframe for sharply improving mileage performance, industry and other sources said.
The proposal, if accepted by California and a dozen other states that want to more aggressively target greenhouse gasses, would effectively end legal and political battles with the struggling auto sector over the best way to cut fuel consumption and curtail tailpipe emissions.
It would also put more pressure on struggling U.S. automakers like General Motors Corp (GM.N), Ford Motor Co (F.N) and bankrupt Chrysler LLC to accelerate development of more efficient gasoline engines, as well as new gasoline/electric hybrids and all-electric cars.
Automakers, however, are likely to support key elements of the Obama plan, industry sources said on Monday.
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Autos represent 17 percent of all man-made carbon emissions, according to EPA.