When Automakers Went Before Congress

AUTOMAKERS SAID: They recognize cars and trucks produce 20% of the nation’s CO2 and reducing those emissions is an important element of any energy security and climate change policy. They want to be part of the solution, with emphasis on part.

FACT IS: This is very reasonable and no one is arguing otherwise. Aggregate CO2 emissions will have to be capped. The tricky parts are in whether you cap upstream or downstream, in how low the cap is, and in how the limits are allocated among automakers. An economy-wide carbon cap would require significant reductions of CO2 emissions from cars and trucks—possibly higher than 4% per year.

SOME AUTOMAKERS SAID: They support improving CAFE if it is reformed and the final numbers are set by NHTSA.

FACT IS: NHTSA is not the Federal government’s center of expertise on CO2 emission and fuel economy, EPA is. The CAFE regulatory authority was given to NHTSA to ensure that safety was not compromised. However, the massive shift to trucks that reduced safety as it increased the variance in weight between large and small vehicles occurred under NHTSA’s watch.

AUTOMAKERS SAID: They are making cars in Europe that meet CAFE proposed by President Bush. “For those who advocate 4 percent annual CAFE increases over the next ten years — which translates to a 50 percent fuel economy increase — we know how to do that too. In fact we already do it in Europe. The U.S. Combined fleet averages 24-25 and in Europe the fleet averages 36 mpg. That’s a 50 percent difference.” (LaSorda, Chrysler Group)

FACT IS: Good point, very good point.

AUTOMAKERS SAID: “The difference is the European approach to energy and ghg policies. They’ve made tough political choices. They’ve highly taxed gasoline, making the price three times higher than the U.S. and they have incentive on diesel fuel. As a result of these policies, fuel economy is always higher on the consumer’s list.”

FACT IS: Another good point. Congress has a responsibility to show political courage and ask all Americans to make sacrifices to address global warming — not just beat up on the automakers.

AUTOMAKERS CLAIM: CAFE didn’t achieve desired effect of reduced gasoline consumption, people simply drove more.

FACT IS: When President Gerald Ford signed CAFE into law (the Energy Policy and Conservation Act) in December 1975, the passenger cars Americans could buy from automakers averaged 13.5 miles per gallon. Light trucks averaged 11.6 miles per gallon. (These are window sticker mpg.) CAFE took effect in 1978 for cars and 1979 for light trucks.

After ten years of steady increases in CAFE standards, Americans could buy passenger cars averaging 24.1 miles per gallon and light trucks averaging 18.4 miles per gallon—an increase of 4% per year from 1978 to 1987 for both cars and trucks.

If fuel economy had stayed at 1975’s level, then the vehicles sold from 1978 to 1987 would have consumed 60 million more gallons of fuel over their lifetimes than they did because of CAFE—a 35% reduction—even assuming Americans drove 10% more miles simply because of CAFE.

AUTOMAKERS SAID: We need more efficient vehicles; we also need lower carbon fuels and consumer incentives.


AUTOMAKERS SAID: Most cost effective solution to lowering CO2 emissions from vehicles would be a combination of bio-fuels and vehicle technology.

FACT IS: Maybe, but the infrastructure and biofuels producers have a long way to go before this solution can become a reality. We need to work on these barriers, but in the meantime we need more efficient vehicles and consumer incentives.

  • rgseidl

    The Congressional committee that asked auto makers to testify is headed up by Rep. Dingell (D-Mich) who has long received substantial campaign contributions from them. The present hearings are therefore something of an exercise in damage limitation. The industry does not want EPA to be in charge of CO2, because that agency is hard to influence.

    Laterally shifting the burden of taxation from income to fuel would indeed be the most sensible strategy. Unfortunately, for all the posturing, members of the US Congress simply don’t have the leadership qualities it takes to sell that to the electorate.

    Hopefully one of the Presidential hopefuls will do so. The key is to make the transition gradual, predictable and irreversible to minimize accelerated depreciation on legacy assets. Figure 10-12 years before prices at US pumps could match those in Europe today.

  • Mike

    Something’s wrong :roll

    Didn’t president Bush cater to the auto industry not too long ago by signing a cap on fuel economy increases, as well as making it more difficult to raise them in the future?

    I suspect this is a PR stunt by the auto industry.

  • joe yan

    Americans shouldn’t feel cool to drive a big SUV or light truck to work. This is not a cool life style.

  • Van

    The vast improvement from 1976 to 1986 was the result of a technological improvement, fuel injection replaced carburation.

    From 1986 to 2006, no improvement in fleet average occured. But in the next few years, hybrid technology will bring about another significant increase in fuel economy. But this will be overwhelmed by the increase in the number of vehicles on the road globally.
    CO2 emmission from transportation will continue to increase unless we shift off of fossil fuel to nuclear and renewable energy sources.

  • Zan

    If U.S. consumers paid for fuel directly, instead of through $Billions in industry subsidies, there might be a natural (read free-market) incentive to adjust their usage habits. But then pig oil wouldn’t like that and all lawmakers know this. :roll