ShareThisBy SHAWN MCCARTHY
Wednesday, November 08, 2006
Ken Austin sells Hummers a few miles from the California state capitol building where legislators enacted greenhouse gas emission standards that the auto industry argues will drive gas-guzzling SUVs out of the California market.
But he's more worried about an economic slowdown biting into sales than the controversial emission standards that the car makers and some of his fellow dealers are challenging in federal court.
"Manufacturers will always adjust," he said, noting that the new silver H3 mid-sized model in his showroom will achieve 20 miles per gallon on the highway, as required by state law. "They'll always figure out how to change it according to what the state requires."
Just as it was the leader in addressing smog-causing pollution 30 years ago, California has imposed North America's most aggressive rules to force the auto makers to reduce greenhouse gas emissions to combat global warming. The regulations, now part of the state's overall plan to reduce GhG emissions to 1990 levels by 2020, take effect in the 2009 model year, and require each car maker to reduce emissions from its fleet of new vehicles sold in California by 30 per cent by 2016.
The state dealers' association says the emission standards will drive up new car costs and limit choice.
California Governor Arnold Schwarzenegger insists the auto regulations are critical to the state's global warming plan. But the auto industry is fighting back, fearful that the state's regulatory approach could spread to other states and Canada, and become the de facto standard for North America.
In a federal court action by Alliance of Automobile Manufacturers and several central California dealers, the industry _ backed by the Bush administration _ claims the state has overstepped its authority by regulating GhG emissions.
The auto makers argue that the federal Environmental Protection Agency has sole authority to set new fuel efficiency standards, and that California is essentially targeting fuel efficiency to limit carbon dioxide and other GhG emissions.
California pioneered clean air legislation in the 1970s by passing regulations that required auto makers to eliminate nitrous oxide, sulphur dioxide and other particulates that cause smog from the tailpipe emissions, an approach later adopted by the federal government. But the auto industry argues California has no authority over carbon dioxide, which the EPA does not consider to be a pollutant.
In a letter to President Bush made public last month, Schwarzenegger demanded that the EPA issue a waiver to California allowing it to regulate carbon dioxide and other greenhouse gas emissions, an action that would undermine the auto makers' court case.
"Further delay (on the waiver) will result in California losing its right as a state to develop forward-thinking environmental policies," he said.
The California Air Resources Board, which is charged with implementing the legislation, suggests the industry can achieve its initial California targets, which would reduce emissions by 22 percent with existing "off-the-shelf" technology. To achieve the state's 2016 targets, however, the industry will have to turn to technologies now in development, and significantly expand its offering of hybrids and alternative fuel vehicles, said Charles Shulock, the board's program manager.
"The near-term target was specifically designed to be achievable without changing their sales mix," Shulock said.
However, as Californians adapt to higher gasoline prices by shifting to smaller cars, and purchasing hybrids, the auto makers can claim credit for emission reductions.
Last year, Californians purchased some 52,000 hybrids _ roughly a quarter of the 200,000 hybrids sold in the U.S., though hybrids and alternative-fuel vehicles remain a small part of the overall new car market. California drivers registered nearly 1.8 million new cars and light trucks last year, according to data-gathering agency AutoCount.
In 2000, the light truck category, which includes minivans and SUVs, accounted for 48 per cent of the California market, and rose to 52.5 per cent by 2005. Amid record pump prices this year, the market share for light trucks has slipped 2.5 percentage points, AutoCount figures show.
Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, argues California's approach is wrong-headed because the new regulations will drive up the costs of new vehicles, meaning Californians will drive their older, less-fuel-efficient vehicles longer.
Territo acknowledged that technologies exist to improve fuel efficiency, but said the various power train and transmission packages are already available in certain models and often not complementary in the way that the regulators envisage. The alliance estimates the new rules could cost as much as $3,000 per vehicle, while state regulators put the cost at less than $1,000.
Despite the confidence of some dealers that the industry will adjust, Peter Welch, president of the California Motor Car Dealers Association, said many of his members remain concerned.
"We want to ensure our customers have access to the full range of products," he said. "And we're concerned that there may be models that we would normally have that we won't be able to get because they don't meet the fuel requirements."
