Sunday, February 15, 2009

Emissions Waivers and the Economy

Recently, I read the article “Obama clearing way for California emissions waiver” by Ken Bensinger and Jim Tankersley published January 26, 2009 in the Los Angeles Times. The article essentially summarizes how President Obama is asking the Environmental Protection Agency (EPA) to allow waivers from federal rules that would allow states to set their own (and in most cases, stricter) standards for car emissions. President Bush had previously denied California a waiver that it had applied for back in 2007. However, Governor Schwarzenegger decided to sue the federal government upon news of the denial. Congress also launched an investigation into the process of EPA decision making.

Even though I am in support of the government trying to become as environmentally friendly as possible, and therefore limiting our greenhouse emissions, I do not think that allowing states to set their own emissions guidelines is necessarily the right way to go about helping the environment. If California and 17 other interested states are successful in obtaining the waiver and passing even stricter emissions standards, I think that it could potentially be the last straw for the American car industry. If auto manufacturers are forced to comply with these new standards, it would cost the companies billions to research and develop new cars that meet the stricter standards. And, considering that the only way the auto industry is managing to keep afloat these days is with billions of dollars from the federal government, forcing them to manufacture new cars to meet these standards could downright kill these companies. I think that this decision should possibly wait a couple of years until the car industry can recover and properly attack the issue of meeting possible stricter requirements.

Also, if states impose stricter guidelines for emission, this means that it is going to exponentially harder to get inspection stickers for our cars. This means people will have to spend even more on auto repairs to upgrade their car’s emission systems to meet the new requirements. And, in this economy, people do not necessarily have money to pay for those upgrades/repairs. So either one of two things will most likely happen: one, people will simply not pay to repair their cars and drive around with expired inspection stickers or two, pay for the repairs and possibly go into even more debt. And, if states really want to enforce the inspection stickers, they will have to have cops devote more time to writing tickets and taking them away from actual protective duties.

In addition to burdening drivers with the inspection stickers, drivers will also pay more in gas prices (which as we saw last summer adversely affects almost everyone). California already has ridiculously high emission standards, and because of this they have to have specially blended gasoline that typically runs a dollar or two more a gallon than regular fuel. If other states raise their standards, more people would be subjected to using higher priced fuel to help meet these new standards. And, once again in this economy, I do not think that people can afford this right now.

Overall, I am not saying that I disagree with the waivers. I think that we should monitor our emissions so that we play our part in helping control pollution. However, with the state our economy is in presently, I think that the waivers would simply make things so, so much worse.


Nate said...

Perhaps more stringent standards are a nice complement to the restructuring process the car companies are going through right now. The way to solvency may be through a dedication to more fuel efficient fleets. Shouldn't they have already spent lots of money on R&D on these technologies/designs? If they haven't, then maybe they deserve to fail.

Lastly, I wonder if car inspections would be much affected by these standards. The states would address vehicle/engine design and fuel mix in order to comply, otherwise current inspection process already address car's efficiencies.

Ideamotor said...

I agree with Nate. Free trade issues aside, obscure and strident environmental standards may be a way to reduce the relative cost of production for companies that focus specifically on states with the aforementioned regulations.

Andrew said...

Kate: while I understand the desire to avoid any added pain in these economic times, we hear the exact same arguments during times of economic growth, except in reverse: we can't impose limits because it will slow all this tremendous growth we are experiencing!

The automakers are being bailed out precisely because the government decided that it was in the nation's interest to continue to have a domestic automobile industry to provide transportation solutions for the future, not because it wanted to subsidize inefficient, gas-guzzling vehicle models. I think it is entirely consistent for Congress and the Administration to say to the manufacturers, "we gave you public money so you could have a future in this country, now help us build our future."

By permitting California to lead the way on this, the administration is also signalling that the automanufacturers had better develop an internal drive for innovation, because they can't count on the federal government shutting down more stringent state-based standards. This development will force the automanufacturers to stay ahead of the game, and produce highly efficient vehicles to meet whatever the highest standard is.

Finally, as Rahm Emmanuel pointed out, you can't waste a crisis. Now, if ever, is the time to undertake the necessary structural reforms to our economy to get it pointed in the right direction for the long-term, and a necessary component of that is cleaner, more efficient vehicles.

Michael E. Webber, Ph.D. said...

Kate, two things:

1) will the CA standards kill the car companies, or save them? I suspect it will save them.

2) CA is already exempted from federal laws and given special permission to set its own standards (because historically their air quality was worse). So allowing them to set their own standards for CO2 is merely continuing that tradition; it's not setting new precedent. And, allowing CA to set stricter standards has in fact been very successful, historically. I suspect that problem here isn't so much that CA shouldn't lead the way or that it will inflict undue pain on auto manufacturers if they do; I think the real problem emerges if we have 50 states and 3000 counties each setting their own carbon rules that undermine each other by accident. Carbon is a national and international issue, not a local one, and so it requires engagement at the highest levels rather than a complicated patchwork of local efforts.

Mithun said...

I agree with Dr. Webber there, CO2 emissions is a national and international issue, and has to addressed at that level, and not at local. But my point is, even though in tough economic situations like this and considering the impact of such strict regulations, auto manufacturers should have already done their homework, after they received federal bailout. We will have to push our R&D in fuel efficient cars, with highly controlled CO2 emissions, this issue has to be addressed sooner or later. Doesn't it seem better to set standards and implement them now, when we are doing worst economically, so that once this negative peak passes, we might be able to breath in much cleaner air in future.

Anonymous said...

I tend to agree with all of the previous posts: I think that stricter emission standards have the potentially to save the US auto industry. If you want to think about it in terms of a market economy, if the US auto makers don't introduce cleaner cars, the Japanese, Germans and Koreans will beat them to it.

Regarding vehicle inspections, we already deal with inspecting cars manufactured with different emission requirements. Cars manufactured after the clean air act have drastically different requirements than a muscle car from the 1960s. Diesel vehicles are also subject to different requirements.

Instead of waivers, is there a different solution anyone thinks would work better?

Zoe said...

Although I agree with Kate's stance that the economy is currently in a fragile state, wouldn't these emissions standards take time to enact and also allow for an extended time frame for automakers to meet these standards?