Experts on fuel efficiency and vehicle markets gathered on Monday, April 21, in Sacramento, Calif., to explore the idea of feebates as a strategy for reducing carbon emissions from cars and trucks.
California is trying to bridge the gap between current greenhouse gas laws—and the level of emissions the state has pledged to reach under AB32, the far-reaching Global Warming Solutions Act of 2006. The state is targeting the transportation sector because the 25 million cars and trucks in California produce almost 40 percent of the state’s greenhouse gas emissions.
Feebates are a combination of a FEE (or tax) on inefficient vehicles and a reBATE for ones that are more efficient. The idea is that the money balances out and the program pays for itself—that is, the fees from some of the car buyers become the rebates given to others. In the symposium, examples were offered of similar systems being adopted in Europe to reward the manufacturers and buyers of cars with low CO2 emissions, while collecting from the less-efficient ones.
Walter McManus from the University of Michigan’s Transportation Research Institute gave a detailed analysis of feebates, which he believed could achieve 34% more emissions reductions than either CAFE. Brian Moss, from California’s New Car Dealers Association, disagreed. Moss challenged the assumption that consumers would embrace feebates, warning that real-world use of feebates often work out differently than they do in academic forecasts.
Spencer Quong from the Union of Concerned Scientists reviewed several of the forms a feebate could take, noting that the type of feebate chosen could either limit or allow consumer vehicle choice. Some economists suggest that a greenhouse gas feebate would speed the declining market share of American manufacturers and give a boost to Japanese automakers with more efficient vehicles.
Honda’s John German said that getting feebates right would take a “large expenditure of political capital.” For that reason alone, it appears unlikely that a feebate system will be put into place. A bill to start a feebate system in California was introduced earlier this year, but went nowhere. A Canadian feebate proposal is likely to suffer the same fate.