What the world’s automakers refused to do in California they readily agreed to in Canada. On April 5, a who’s who of big carmakers signed a voluntary agreement to build much cleaner automobiles for the Canadian market, avoiding the emission of more than 5.3 megatons of greenhouse gases by 2010. When faced with the same prospect in California, they called their lawyers.
The former schoolteacher's bill has shaken up the auto industry.
The concept of regulating the global warming performance of the auto industry has never been welcomed in Detroit, Stuttgart, Seoul or Tokyo. Credit for the idea is due to Fran Pavley, a retired schoolteacher turned state assemblywoman in California. She quietly shepherded a bill through the legislature that would require automakers to reduce their greenhouse gas emissions about 30 percent by the 2016 model year. Since the only practical way to achieve that goal is to increase fuel economy (which threatens the profits made from the largest SUVs), the industry reacted with fear and loathing.
Most bills of this type die a quiet death, starved of financial support and co-sponsors. But a funny thing happened as Fran Pavley’s bill moved through committee: instead of dying, it gained strength, and even attracted the powerhouse support of Governors Gray Davis (who signed it) and Arnold Schwarzenegger (who inherited it, but supports it, too). Now known simply as "Pavley," it’s the law of the land in the Golden State. California, with 1,100 miles of coastline, worries a lot about rising tides, and 58 percent of the state’s climate-related emissions are from motor vehicles.
The Alliance of Automobile Manufacturers (AAM) filed its suit at the end of the year. California, said AAM President Fred Webber, had "clearly gone far beyond what is reasonable and achievable." He claimed that the state law was a fuel economy bill under another name, and that only the federal government (through the Corporate Average Fuel Economy, or CAFE, rules, which have remained unchanged for 20 years) has that authority.
On its own, and even in the face of gas prices that are now hurting a majority of Americans, Congress is unlikely to force automakers to make their cars more fuel efficient. The automakers, which have a lot of clout in districts with plants, won’t stand for it. That intransigence has only gotten worse since last November’s election, and it could come back to haunt Congressional Republicans even more than their precipitous action in the Terri Schiavo case. Even Treasury Secretary John Snow is now worrying about the effects the highest gas prices ever are having on the economy. And according to a new CNN/USA Today/Gallup poll, just under half of the people surveyed say they’re cutting back on driving because of prices that in some areas are over $3 a gallon.
Keep this in mind, auto industry. The absence of tough CAFE standards has allowed you to build fleets of cars and SUVs that, despite evolving technology, are actually less fuel-efficient than the low-tech vehicles of the 80s. And now high gas prices are causing consumers to abandon the big SUVs in record numbers, which is cutting a hole in Big Three profits (and particularly hurting General Motors). It was all fairly predictable.
Also predictable was the dire warnings from car-state Congressmen about the effects Pavley would have on the auto business. Congressman John Dingell (D-MI) estimated that making Pavley-compliant cars would add $3,000 to the bottom line (the bill’s supporters say $1,000). He told PBS those costs would "close about eight plants which assemble automobiles, four transmission plants and four engine plants, resulting in the loss of thousands of American jobs."
And now Canada gets into the act. The Canadian agreement isn’t Pavley, because it’s voluntary, but it should have pretty much the same effect. According to John Bennett, a senior policy advisor for energy at the Sierra Club of Canada, the document is a "memorandum of understanding" between the Canadian government and the companies that do business in the country, from BMW through Volvo.
Former Governor Gray Davis signs the greenhouse gas bill in San Francisco's Griffith Park.
The carmakers committed to reducing the emissions their fleets produce by 5.3 megatons by 2010, with intermediate targets of 2.4 megatons in 2007, three megatons in 2008, and 3.9 megatons in 2009. "The industry has admitted it can actually do here what it said it couldn’t do in California," Bennett says. "This is a first for North America." It happened after two years of stalling, he said, because Canadian Environmental Minister Stéphane Dion told the carmakers that if they continued to refuse a voluntary agreement they’d get mandatory regulation. After that, a deal was struck in three months. "He got tough, and that toughness brought them to the table," Bennett said.
There are other ways besides fuel economy to reduce global warming emissions, but they’re really drops in the bucket. One solution is to produce a more climate-friendly refrigerant for auto air conditioners, but those refrigerants only account for an estimated .8 megatons of the Canadian auto fleet’s annual 90.1 megatons of emissions. The only real choice is to turn gas guzzlers into fuel sippers with more efficient engines that, for example, shut down one bank of cylinders when not required. Multi-speed transmissions may make a dent, as will adding hybrid options across company fleets.
In the offing is the prospect that the Canadian law will be a prelude for a dramatic change in the U.S., resulting in one clean car standard for all of North America. That’s what’s envisioned by Bennett’s counterpart in the U.S. Sierra fuel-economy crusader Dan Becker uses the equation "7+1=50." A rough translation: California plus six Northeastern states have embraced California’s tough emission laws (and may endorse Pavley, too). Add Canada to that list of seven and the carmakers will finally agree on their own that they’re better off making just one clean version of their cars.
The auto industry has resisted every environmental regulation, so this decision won’t come easily. Eron Shosteck, an AAM spokesman, claims that the Canadian agreement should have no bearing on the U.S., because only Congress, through CAFE, can set fuel economy policy here. Most automakers, their dealers and trade associations don’t get it. Peter Welch, president of the California Auto Dealers Association, argues that Pavley is unnecessary because California’s global warming emissions don’t stay put over the state and therefore "Californians are not going to get any health benefits," but that completely misses the point. Climate emissions affect all of us, and we’re in this mess now because the whole world has ignored the problem for far too long. Kyoto was a first step toward reversing that trend, and Pavley, in California and now Canada, is the second.