Two weeks ago, the Bush Administration said that it “will not finalize its rulemaking on Corporate Fuel Economy Standards.” That’s a shame because the regulations were understood to be all but finalized and ready for White House sign-off more than a month ago. It would have, at least, given Bush a chance to burnish the “light green” part of his legacy.
The Department of Transportation’s CAFE proposal, covering model years 2011-2015, was on track toward meeting the 2020 target of 35 miles per gallon. But the Administration couldn’t resist taking one last dig at California’s tough greenhouse gas regulations for cars, known as Pavley standards, by adding language saying that state regulations for CO2 tailpipe emissions “are expressly and impliedly preempted” by its interpretation of Federal law.
Forget that the Bush interpretation had already been struck down by two Federal courts. Such a posture was another attempt to lend legal ammunition to automakers still hoping to derail California and other states’ leadership on stronger steps to protect the climate.
Then, Bush punted to Obama to finalize the rules.
The “Costs Too Much” Excuse
The Bush Administration used the auto industry’s financial woes as a reason for the delay. That’s not, however, a good excuse. Opponents of fuel economy increases often tell a lopsided story, painting a picture of the need to re-tool using costly technology. In fact, automakers need to re-tool on an ongoing basis to remain competitive. Their current engineering budgets are now tight, but if an automaker fails to invest, it won’t be able to stay in business. That is, after all, the rationale for the bridge loans just given to GM and Chrysler.
It’s not more technology that’s needed, but a different set of priorities. After all, an 8-cylinder engine costs more to build than a 6.
Improving fuel economy across the fleet doesn’t need to be a matter of investing more than an automaker would otherwise. Rather, it’s a matter of investing differently. In fact, although gasoline prices have dropped, the future is likely to bring ongoing risks of volatility even if the price isn’t always painfully high. Moreover, consumer interest in “green” for its own sake, out of environmental concern, is also here to stay and bound to grow. The broad direction is set and a smart automaker will re-orient its product strategy accordingly while keeping to a budget based on what it can expect in terms of market share.
Under new CAFE standards—which require all automakers to improve—automakers can plan a mix of vehicles that are more efficient without necessarily spending more than they would in reverting to a product plan based on mass and muscle. Thus, it’s not more technology that’s needed, but a different set of priorities for which technology is chosen and how it is used. After all, an 8-cylinder engine costs more to build than a 6. Time is money, and planning certainty saves money. A sound and timely CAFE proposal would give automakers firm targets that would enable them to get their plans in place and budget accordingly.
Recovering the Fumble
It’s a sad state of affairs that the Bush team made this final fumble, given that the country was finally gaining ground after decades of stagnant higher fuel economy laws. It’s also a disservice to the hard-working civil servants that contributed to the fuel economy effort. This leaves yet another chore for an incoming Administration already saddled with huge problems. The Obama team will need to huddle quickly on the CAFE issue in order to release a new rule by the April 1 deadline and offer automakers maximum lead time for planning more efficient products.
The story will go from sad to tragic if the new CAFE rule, when rewritten by the Obama Administration, is any weaker than last April’s proposal or if it fails to remove language that attacks California’s initiative to set its own greenhouse gas standards for motor vehicles. The country would be put even further behind in urgent effort to lessen global warming. Hopefully, Obama’s team will recover Bush’s fumble and sprint toward getting Americans into truly climate-friendly cars.
This article was contributed to HybridCars.com by John DeCicco, senior fellow, Environmental Defense Fund.