California Emissions Waiver, Two Steps Forward One Step Back

Photo via: Injuryboard.com

Here at GBET we have previously discussed the new Federal fuel efficiency standards and the goals they sought to achieve. One of the key issues the new standards addressed was the discrepancy between California emissions standards and the Federal standard. It appeared as though there was finally going to be one unified standard which would allow for auto manufacturers to produce one version of a car for distribution nationwide. However, on June 30th, 2009 the EPA granted California an emissions waiver, clearing the way for them to once again set their own greenhouse gas emissions standards. California has agreed not to toughen the standards until 2017 but this still leaves one wondering what the long term implications of allowing multiple standards will be. Currently, the Waxman-Markey Climate Change Bill is being reviewed by the Senate, the bill will have sweeping implications across the U.S. economy in terms of regulating greenhouse gas emissions and is a laudable achievement if it passes. What will occur if states are allowed to set their own greenhouse gas emissions? Will we see a race to the top, with each state attempting to be the greenest? The potential implications of this waiver loom large and it will be very interesting to see what happens in 8 short years.

The critics to the waiver argue that allowing California to set their own standards will lead to higher costs to consumers as expressed by Scott Segal:

"California already has experience in adopting differential regulations for gasoline and electricity," said Scott Segal, an attorney for Bracewell and Giuliani in Washington, which represents utilities and refiners on climate change policy. "In each case, the results have been high prices for consumers, small businesses, schools, hospitals and industry. The precedent set here for cars could be just as damaging."

Allowing states to regulate their own environment whether through green building mandates or stricter emission standards is helping to spur development of a green collar economy but we must be careful to do so in a manner which does not destroy the backbone of the blue collar economy on which so many individuals rely.

Obama: Cutting Carbon Emissions and Increasing Fuel Efficiency

The new fuel efficiency standards released on Tuesday by President Obama achieve several important goals:

  1. Resolves inconsistency between Federal standards and California standards bringing consistency to the industry. California will defer to the national standard.
  2. Fuel standards will rise by 10 miles per gallon to an average fuel efficiency of 35.5 miles per gallon between 2012-2016. This is a 40% increase over today's federal requirements.
  3. Carbon emissions will fall by 900 Million metric tons, a 30% reduction, over the course of the program.
  4. Program will save 1.8 Billions barrels of oil

The Government contends that the new measures will only add $600 to the cost of each vehicle sold. The text of the entire article can be found here.