Governor Gray Davis on July 22 signed a controversial bill empowering the California Air Resources Board (CARB) to set mandatory carbon dioxide (CO2) reductions for California automobiles. Just recently given up for dead after public opposition to a similar bill, carbon dioxide curbs were resuscitated in a flurry of backroom political maneuvering that had proponents of consumer choice crying foul.
Unpopular bill reborn as a chameleon
Carbon dioxide emissions were initially proposed in Assembly Bill 1058. California consumers were at first receptive to the vague imperative to require auto manufacturers to produce cars that do not contribute to global warming.
However, public debate over the bill brought to light important details about its likely consequences: future spikes in car costs, decreased consumer choice, and little impact on global warming. Support for AB 1058 among legislators disappeared as constituents learned more about the few advantages and many disadvantages of the bill.
Supporters of carbon dioxide curbs did not, however, throw in the towel with the defeat of AB 1058. Learning their lessons about the high cost of public debate, predominantly Democratic lawmakers employed a secretive, backroom political process reminiscent of Tammany Hall.
On Friday, June 28, supporters of AB 1058 hijacked an unrelated bill, AB 1493, gutted it of its major provisions, and inserted the unpopular AB 1058 mandates in their place. The bill was rushed to the California State Senate, where it was approved quickly and quietly, without discussion or debate.
The next business day, Monday, July 1, the bill was presented to the lower chamber, the California State Assembly, where it was referred to the Democrat-controlled Transportation Committee. The committee immediately approved the bill and then sent it to the Assembly floor under a special procedure that allows bills to be brought to the floor without public notice. The bill was immediately passed, by a single vote, by the full Assembly before the public could offer the same input and demand the same accountability that caused the defeat of AB 1058.
In less than two days, an unpopular and seemingly dead piece of legislation was whisked through the legislature before California’s citizens could make their voices heard. Governor Davis sat on the bill for three weeks before signing it on July 22.
“It’s interesting how the Democrats talk of honor and the integrity of the House, and then they run through this bill very fast,” said Assemblyman Tim Leslie. “Why rush? We didn’t even hold a proper hearing on it. It wasn’t in the open; it was in a closed room that was inaccessible to the general public.
“I’ll tell you why they did it this way,” Leslie continued. “It was so the public wouldn’t have a chance to make their views known. This was sneaky, underhanded, and not the way we should conduct business in this state.”
“The California Legislature, controlled by Democrats, just pulled a stunt that makes the corporate bigwigs of Enron, WorldCom, and Global Crossing look like pikers,” added Larry Weitzman, a free-market environmentalist with Tech Central Station. “Environmental extremists will simply not be deterred by democratic processes and care little about the wants, needs, and interests of average voters.”
Legislature ducks for cover behind Air Board
Unwilling themselves to set the requirements of the new law, the legislature gave the California Air Resources Board (CARB) authority to establish specific CO2 reduction mandates. The new mandates must be in place by the 2009 model year.
“I don’t think that decision should be made by a five-member appointed body,” said Assemblyman John Dutra (D-Fremont). “It’s a decision that could have a serious economic impact.”
In passing responsibility for the new mandates to CARB, the legislature took political cover by forbidding CARB to require such unpopular measures as higher gasoline taxes, new taxes on miles driven, or mandatory reductions in vehicle size.
A high price to pay
Nevertheless, the end result will likely be reductions in vehicle size, whether or not CARB explicitly mandates such reductions. CO2 emissions can be reduced in one of two ways: by implementing expensive, performance-impairing new technologies, or by increasing fuel mileage by making vehicles lighter and less safe. Neither approach is popular with car buyers, but the second approach appears to be the lesser of two evils.
The automobile industry has responded to current and anticipated fuel efficiency mandates by investing billions of dollars in fuel efficiency research. Even so, the Toyota RAV4 illustrates the tremendous costs involved in creating a fuel-efficient larger vehicle.
The RAV4, even in its unmodified form, is something of a lightweight among sport utility vehicles. Its size and weight pale in comparison to SUVs made by American auto manufacturers and demanded by American consumers. However, the RAV4’s already-moderate size and weight made it a logical candidate for Toyota to modify with a less-powerful electric engine that could meet the emissions and fuel-efficiency demands of auto industry critics.
Toyota replaced the engine of the standard RAV4 with an electric battery. Other vehicle alterations, needed to maximize performance and efficiency with an electric battery, were also made.
Whereas the typical RAV4 has a starting price of $17,000, the electric version of the vehicle sells for $42,000 … and even that price tag is misleading. “We lose large amounts of money on every EV [electric vehicle] we sell,” says Mike Love, Toyota’s national regulatory affairs manager. “They cost us in excess of $100,000 apiece to build.”
“I remember I had a meeting in Tokyo where they showed me all the cost of this stuff,” said Carlos Ghosn, chief executive of Nissan. “I said, ‘Oh my God, the others have to do this too?'”
For a consumer cost of $42,000 and a manufacturing cost of more than $100,000, the electric RAV4 still carries unavoidable inconveniences: short driving range on a single battery charge and long charging times between trips.
Downsizing inevitable
The technology simply does not exist that would allow current car sizes to meet the efficiency and emissions requirements of California’s new law. The only feasible alternative is for automobile manufacturers to produce lighter, less powerful, and less collision-worthy vehicles. Although the California legislature told CARB it may not mandate such unpopular reductions in vehicle size, safety, and performance, elected officials have been well aware for many years that smaller vehicles are the only feasible option left open to automobile manufacturers.
“They can call it what they want, but this is a fuel economy bill,” said Eron Shosteck, spokesperson for the Alliance of Automobile Manufacturers. “If this gets adopted, we’ll have to make vehicles smaller, lighter, less versatile.”
“Let’s be clear about what this is,” observed Shosteck. “This is a state version of fuel economy standards.”
The lobbying effort on behalf of the California bills appears to confirm Shosteck’s assessment. Senators John McCain (R-Arizona) and John Kerry (D-Massachusetts), cosponsors of failed federal legislation to impose more stringent fuel-economy restrictions on American automobiles, were recruited by AB 1058 and AB 1493 supporters to pressure fence-sitting California legislators to support the bills. Additional proponents of more stringent federal fuel-economy standards, such as former President Bill Clinton, actor Paul Newman, and Senator Joseph Lieberman (D-Connecticut), also lobbied hard for the California bills.
“Is California’s bill about global warming or gas mileage?” asked Bill Becker, executive director of the State and Territorial Air Pollution Program Administrators, based in Washington, DC. “I don’t know, but it will address both.”
Shosteck pointed out that consumers already have the choice of buying small, fuel-efficient cars. But the 10 most fuel-efficient cars in America combined represent just 1.5 percent of vehicles sold. People don’t want to buy the kind of cars required by the new California law. “Consumers are going to be angry when they find they can’t have the SUV, pickup, or minivan they want.”
Federalism may void new law
The necessary, though implicit, requirement of the new law that automobile manufacturers reduce vehicle size and increase fuel economy is precisely where opponents of the new restrictions hold out hope.
Under federal law, state governments are not allowed to preempt federal fuel-efficiency standards. After California passed an earlier law requiring zero or near-zero emissions on a significant share of automobiles in the state, a federal judge in June 2002 prohibited enforcement of the law, citing the same implicitly necessary fuel-economy results.
The same logic would seem to apply to California’s new carbon dioxide bill. End runs around issues reserved for the federal government will not be tolerated by the federal courts simply because state governments use indirect methods to preempt federal prerogatives.
Is CO2 a pollutant?
A related legal obstacle for the new law involves the question of whether carbon dioxide is a “pollutant.” California may regulate CO2 if it is a pollutant, but may not do so if CO2 is not.
Carbon dioxide is a naturally occurring gas vital to life. It acts as a desirable and potent fertilizer for plant life. The higher the level of CO2 in the air, the better plants and crops grow.
The argument that CO2 is a pollutant is a rather indirect one. Global warming theorists contend CO2 helps accelerate climate change. Some scientists believe a warmer climate may adversely affect human health. Accordingly, argue the proponents of the new law, carbon dioxide is a “pollutant” fit for state regulation.
“Global warming and carbon dioxide might be problems, but they aren’t pollutants,” countered Phil Isenberg, a former Democratic Assemblyman in California. “They aren’t direct health threats.”
Law could affect entire nation
The ramifications of the California law could be enormous.
Although it applies only within the state, “you can’t make one car for California and another car for Washington, DC,” observed AAM’s Shosteck. California accounts for 10 percent of all U.S. car sales each year, and the need for manufacturing efficiency makes it highly unlikely that two models of cars—one for most of the nation and another, lighter and less crash-worthy, for California—will be produced. As California goes, so, likely, goes the rest of the nation.
“California and the more ‘environmentally conscious’ states are setting national policy,” said Professor Thomas Cahill, director of air pollution studies at the University of California at Davis. “They are going around the Congress.”
“Next time California’s legislators decide to walk off a cliff,” said Jay Ambrose, director of editorial policy for the Scripps Howard Newspapers, “it would be nice if they left those of us who didn’t vote for them out of it.”
