Defending California’s Zero Emissions Mandate

March 3, 2012 by  
Filed under Opinion

Consumer watchdog group Consumer Union’s rejoinder to the editorial “California Still Has No Business Dictating Technology” (Automotive News, Feb 6, 2012) garnered the usual arguments hauled out by a vocal politically motivated minority against progress that benefits Americans. The CU letter refutes some of the arguments made, stating the case for increased consumer choice for efficient vehicles, and citing its own national survey which revealed that 56% of Americans would consider a hybrid, electric, or hydrogen fuel cell vehicle for their next purchase.

The law in the crosshairs of criticism is California’s forthcoming Zero Emissions Vehicle (ZEV) mandate. The law requires 15.4% of all cars sold by automakers to have zero tailpipe emissions by 2025. In terms of currently available technologies that means at least in theory that 15.4% of all cars sold in 2025 would have to be pure battery electric or hydrogen fuel cell vehicles. Hence, the accusation that California’s Air Resources Board is “dictating technology.”

One particular reader thought the idea outrageous that “considering” a purchase could actually be equated with making a purchase. With all due respect to the arguments of pundits and their cadre of dedicated and philosophically blinded followers, “considering” has a very good deal to do with “buying” as any marketer knows one precedes the other. Nobody has a crystal ball, so market researchers have to use something to gauge the potential market for new products.

The big question is just how many of the “consideration set” will translate into actual purchases. Of course, price, performance, and fuel availability are just a few of the key factors that will affect the outcome. For that, we’ll just have to wait and see. But to decree a product’s failure after only a few months on the market, especially when American jobs and economic leadership hang in the balance, is just plain irresponsible politically motivated nonsense akin to cutting one’s nose off to spite one’s face.

Consumers do want more choice; when it comes to buying alternatives, it’s not just about the fuel cost savings. For many people, it’s also about the convenience of home refueling, fewer trips to the gas station, breaking their vulnerability to constant and unpredictable swings in oil prices, reducing the nation’s dependence on foreign oil, better performance, and oh by the way, cleaning up the air we breathe. There’s also that whacky 19 out of every 20 scientists who have warned us about dangerous and costly levels of climate change from greenhouse gases, and a good deal of factual evidence bearing that out. And if that’s not enough, how about the fact that US automakers have to compete globally with firms who have already invested heavily in advanced vehicle technologies?

I do agree that the government should not be in the business of picking technology winners. Rather, they should establish a standard of performance that achieves the public benefit, use policy tools to stimulate demand, and let the market do the rest. CARB attempts to do this, though it goes a step further by requiring a specific percentage of vehicle sales emit zero tailpipe emissions.

Only in this regard can an argument be made that the government is tying industry’s hands with regard to meeting consumer demand. After all, CARB can require industry to sell at least 15% zero emission vehicles by 2025 but they can’t require people to buy them. In this sense CARB is repeating the mistakes it made with the first attempt at a zero emission mandate. The agency eventually relented to industry arguments that batteries weren’t ready for prime time.

But they’re ready now, right? 70 miles of range and a 5-digit price premium should give us pause. Improvements will surely drive costs down, but why should it matter in the first place? Who cares if the car runs on gas, electricity, hydrogen, or lemon juice? So long as it achieves the low or no emissions performance needed to assure public health and welfare, the question should be moot.

It is a shame that we have to look to regulatory agencies like CARB to force supply-side increases in vehicle efficiency through mandates. This is clearly a distant second place to demand-side approaches. Any economist would agree. But politicians refuse to raise the gas tax or price carbon, either of which would ultimately stimulate demand for more efficient products. Meanwhile, there’s a price we all pay for the inefficient use of our resources: Higher taxes to secure energy from hostile overseas governments, the toll on the lives and livelihoods of American soldiers and their families, higher insurance premiums for more frequent and devastating natural disasters, and higher taxes for local and federal aid efforts in the wake of natural disasters. All of these push America further and further into debt.

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