President Obama took a welcome step his first week in office to roll back an ill-advised regulatory reprieve that served no one well, least of all those who fought hardest for it -- American carmakers.
It's not a stretch to believe that Detroit's Big Three would be better off today had they worked with, not against, California's proposed greenhouse gas car emission standards. Instead of hiring engineers and scientists to make cleaner-burning, fuel-efficient cars, automakers lawyered up and lobbied hard. The law targeting global warming gases has been in regulatory limbo since its passage in 2002, a process that culminated in 2007 with the Environmental Protection Agency's (EPA) controversial decision to decline California's petition to implement the new standards. According to news reports, the EPA chief ignored recommendations from agency staff and lawyers to allow the Golden State and other states that have adopted these standards to go forward, igniting an outcry from California Gov. Arnold Schwarzenegger and environmental groups.
Obama's Jan. 26 action ordered the EPA to move swiftly on the issue and evaluate the scientific evidence. It's no guarantee that the agency will reverse course, but Obama's decision is akin to having the boss tell an employee to strongly reconsider a decision. A reversal could have beneficial ripple effects across the nation on two fronts: addressing the climate change threat and pushing carmakers to transition faster to a new energy era. California and 13 other states, as well as the District of Columbia, have adopted the California standards. A handful of others, including Minnesota, are considering them.
The car industry, already propped up by $17 billion in government assistance and likely needing more soon, issued a tepid trade group statement supporting federal fuel economy and carbon dioxide standards -- carbon dioxide being a key greenhouse gas. At the same time, it doesn't look like the industry intends to beat much of a retreat. A spokesman for the Alliance of Automobile Manufacturers lambasted the California standards as a weaker alternative to a 2007 federal law requiring carmakers to hit a fleetwide fuel economy standard of 35 miles per gallon by 2020. That law is known as the Corporate Average Fuel Economy, or CAFE, standard. In Minnesota, the car industry has updated its "Don't Take My Truck" website aimed at fighting the Minnesota "Clean Cars" legislation here.
Despite the industry spin, the California standards are more comprehensive than the CAFE law and require more immediate action, which is a plus. They address greenhouse gas emissions by vehicles -- the target being a 30 percent reduction in emissions by 2016 -- and include tighter limits on tailpipe and evaporative emissions of several air pollutants. In addition, they ensure that a certain percentage of cars sold will be zero-emission. Achieving the emissions standards will result in better fuel economy -- a fleet average of 36 mpg is projected by 2016 -- because better mileage is a key way to reduce emissions. Gov. Tim Pawlenty's Climate Change Advisory Group recommended adopting California standards as a first course of action to meet Minnesota's ambitious carbon reduction goals. The state hasn't yet settled on a strategy to do so; this would be a solid start.
From catalytic converters to seat belts to air bags, American car manufacturers have historically needed a nudge from the government to make changes. It's understandable that from a carmaker's perspective, this nudge may feel more like a kick when the industry is down. Instead, the California standards adopted by states should be seen for what they are: some badly-needed GPS coordinates to get a floundering industry headed in the right direction. Accepting this rather than fighting it will reassure taxpayers who extended them a financial lifeline that the carmakers are serious about making the changes needed to survive. The states "are making some big demands, but the manufacturers are capable of responding. It will be a different business model than what they're used to. But one can argue that it's time for a change for them. Maybe they needed it and they couldn't find a way,'' said Bruce Belzowski, associate director and assistant research scientist at the University of Michigan Transportation Research Institute.