California could get its own CAFE

Published July 1, 2002

The federal government’s proposed ethanol mandate may be bad for California … but a bill passed by both the California Assembly and Senate, but not yet signed into law by Governor Gray Davis, is worse.

AB 1058 will require the California Air Resources Board (CARB) to mandate “maximum feasible” reductions in carbon dioxide (CO2) emissions from new cars and light trucks. The bill has the potential not just to foist ethanol upon unwilling consumers, but to price and regulate millions of Californians out of the market for new large sedans, pickups, minivans, and SUVs.

A California CAFE

Supporters boast AB 1058 will accomplish at the state level what Congress and the President have “failed” to do at the national level; namely, impose stricter Corporate Average Fuel Economy (CAFE) standards on new cars and light trucks, thus beginning to implement the Kyoto Protocol, the non-ratified UN global warming treaty.

Why is this worse than the ethanol mandate? According to the Energy Information Administration, Kyoto’s restrictions on carbon-based fuels will drive up the average price of gasoline 14 to 66 cents per gallon—considerably more than the increases Senator Dianne Feinstein (D-California) fears from the ethanol mandate.

Whereas the safety risks from boosting ethanol usage are hypothetical, the risks from boosting CAFE standards are demonstrable. The simplest way to increase fuel economy—and to reduce CO2 emissions from cars—is to make cars lighter and smaller. But decades of research confirm what common sense tells us: Big cars are safer. The more your car resembles a tank rather than a go-cart, the more protection it provides from collision forces.

The size and weight reductions induced by CAFE added 1,300 to 2,600 fatalities to the nation’s highway death toll in 1993, according to a recent study by the National Research Council. Mandating stricter standards will put even more motorists at risk.

A menu of bad ideas

AB 1058 is quite open-ended about the means CARB may employ to reduce vehicular emissions of CO2. However, a recent CARB and California Energy Commission (CEC) joint report, “Task 3: Petroleum Reduction Options,” reveals the kinds of measures California regulators are thinking about:

  • One option presented in the joint report is to “expand the use” of hybrid gas-electric vehicles. Sticker price per vehicle: anywhere from $9,500 to $14,700 more than a comparable gasoline-powered car.
  • Another option is requiring a 50-cent increase per gallon in fuel taxes.
  • Still another is a “feebate” program that would give $3,500 bonuses to motorists who purchase low-CO2 emitting cars, paid for by $3,500 fees collected from motorists who purchase high-CO2 emitting cars. What kinds of vehicles emit the most CO2? The very ones most consumers want: large sedans, pickups, minivans, and SUVs.

Unintended consequences

Like the ethanol mandate, AB 1058 is environmentally challenged. Today’s new cars and light trucks emit 90 to 97 percent less pollution than their 1960s predecessors, and tomorrow’s vehicles will be cleaner still. Any policy that appreciably slows down auto fleet turnover—the replacement of older cars with newer models—hinders pollution control. By increasing the cost and/or reducing the utility of new cars, AB 1058 could encourage motorists to hang on to older vehicles longer—a consumer response known as the “Jalopy Effect.”

Like the ethanol mandate, many of the options reviewed in the joint CARB-CEC report reduce gas tax receipts and, thus, the trust fund revenues available for infrastructure projects. For example, over the 10-year life of a fuel cell vehicle, the highway program loses $1,653 in revenues—substantially more on a per-vehicle basis than the losses arising from the ethanol mandate.

Of course, AB 1058 supporters will say we must pay any price and bear any burden to save the planet from global warming. That’s easy for them to say, since half the Members of the California Legislature drive gas-guzzling pickup trucks, sedans, and SUVs—heavily subsidized at taxpayer expense. The Legislature buys cars for its members, and pays a hefty share of the cost. “For example,” explains a recent Los Angeles Daily News article, “senators can choose to pay off their cars in two or four years, with the state paying up to $500 a month under the two-year plan and up to $350 under the four-year plan.”

Political consequences

Hillary Clinton’s warning about a “political nightmare” for lawmakers who end up voting against American motorists needs to be heard in Sacramento, not just Washington, DC. Governor Davis has not yet indicated whether he will sign or veto AB 1058.

Can the senior Senator from California pull the Governor and Legislature back from the brink? Don’t bet your SUV on it: Feinstein in March supported a provision to increase by almost 50 percent the CAFE standards for new cars and trucks.