Mar 15, 2009

A Car Wreck Waiting to Happen?

Just when you think the American car industry has suffered all the pain it can bear, a new threat looms. The state of California has expressed its desire to put a limit on carbon dioxide emissions that are considered by some a causal factor in “global warming,” and the state has petitioned the Environmental Protection Agency to grant it a waiver so that it can do so. If the waiver is granted, it could be yet another blow to the already beleaguered auto industry and consumers. 

As Michael J. Stanton of the Association of International Automobile Manufacturers (AIAM) said in testimony on the subject at a public hearing, “We are concerned that a move by EPA to unconditionally grant the waiver would undermine the opportunity to achieve a national policy. Such a grant would result in a patchwork of regulatory programs, all with the same fundamental purpose but each having differing and potentially conflicting levels of stringency and administrative requirements.”

Car manufacturers seek a national standard because the prospect of building vehicles to meet the different emissions requirements of multiple states would drive up their costs and likely persuade them to try to pass those costs on to the consumer. Since the national Corporate Average Fuel Economy (CAFE) requirements, EPA emissions standards and California emissions standards on the so-called “greenhouse gas” issue are currently up for consideration, it seems a logical time for a combined, national approach to the issue. On the other hand, “Balkanization” of the rules could put another bullet into an already gravely wounded U.S. auto industry.

“The CARB [California] and DOT CAFE programs have significant structural differences,” Stanton said. “We are concerned about these substantial and unnecessary inefficiencies that result from differing federal and state programs. As long as the Federal government is taking a unified, aggressive action, varying state requirements would impose immense costs and provide little or no environmental benefit.”