Streetsblog San Francisco

The Obama administration got a lot of attention earlier this year when it raised fuel efficiency rules to an average 35 miles per gallon across the nation’s fleet of automobiles that will be produced between 2012 and 2016. Now the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), a division of the U.S. Department of Transportation (US DOT), have laid out an ambitious road map [pdf] to push tougher greenhouse gas emission and fuel economy standards for passenger cars and trucks built from 2017 through 2025, standards that hypothetically could push the national fleet average up as high as 62 mpg.

“We must, and we will, keep the momentum going to make sure that all motor vehicles sold in America are realizing the best fuel economy and greenhouse gas reductions possible,” said U.S. Transportation Secretary Ray LaHood. “Continuing the national program would help create a more secure energy future by reducing the nation’s dependence on oil, which has been a national objective since the first oil price shocks in the 1970s.”

Today’s report provides an initial assessment for a potential national program for the 2025 model year horizon and outlines next steps for additional work the agencies will undertake to meet the yet-to-be established GHG reduction goals. Depending on the scenario eventually chosen, the industry will have to reduce CO2 production across the national car and truck fleet from a minimum 3 percent (or the equivalent of 47 mpg) up to 6 percent (or the equivalent of 62 mpg).

The report outlines the costs and benefits of several approaches for reaching the targets (technology pathways A, B, C, or D), from focusing on reducing vehicle size and advanced gasoline, to relying on gas-electric hybrids and full electric vehicles (EVs). Rule makers assert that even the 6 percent target is achievable with existing technology, though the higher benchmark would require more hybrids and EVs within a manufacturer’s fleet. Read more…

Environmental Protection Agency (EPA) chief Lisa Jackson extended an olive branch
this week to lawmakers who are pushing to block her from regulating
carbon emissions in the absence of a congressional climate bill, but
Jackson’s promise to delay action until next year appears to have made no headway with Republicans and coal-state Democrats. 

If Congress succeeds in blocking the EPA from following through on a Supreme Court mandate
to regulate emissions, a legislative path to nationwide pollution
limits would effectively become the sole means for the Obama
administration to follow through on commitments it made at last year’s Copenhagen climate summit.

But White House climate adviser Carol Browner
noted today that a congressional block on the EPA’s authority would
have a second wave of consequences for transportation policy — it
would jettison the Obama administration’s much-heralded deal to raise auto fuel-efficiency standards to 35.5 mile per gallon by 2016.

"I
don’t know why members [of Congress] would want to go out and vote
against the science of climate change," Browner told attendees at a
climate conference sponsored by The New Republic.

Without EPA
authority to regulate emissions under the Clean Air Act, she explained,
"there is no car rule" — referring to the agreement to adopt
California’s landmark efficiency standards as a national model.

"If
the car rule were not to go forward, California would still have all
its authorities," Browner added, meaning that the auto industry’s fears
of compliance with a "patchwork" of regional fuel standards would become a reality.

Browner’s
comments came as climate legislation continues to lose momentum in the
Senate, giving more political ammunition to lawmakers and industry
representatives who seek to stall the process.

Yet Sen. John Kerry (D-MA), one of three negotiators working on a "tri-partisan" climate deal in the upper chamber, took a notably upbeat tone today on the prospects for action this year, and Browner concurred with Kerry’s sentiment.

Read more…

Seven months after first trying
to re-brand congressional climate change legislation as an "energy
tax," Senate Republicans were back at it today with a new report and op-ed that attempts to expose the climate bill as a "$3.6 trillion gas tax."

Sens.
Kay Bailey Hutchison (R-TX) and Kit Bond (R-MO) gathered outside the
Capitol today, flanked by aides wearing black stickers imprinted with
the slogan "CAP & TRADE = GAS TAX," to promote a new report [PDF] that presents their "gas tax" assertions.

How
did Hutchison and Bond get to their $3.6 trillion total, which their
report calls "relatively simple and straightforward to calculate"? They
simply multiplied their estimate of how much fuel the U.S. would
consume between now and 2050 by their estimate of the per-gallon gas
price increase that would result from an economy-wide emissions cap.

Hutchison and Bond got their numbers from the National Black Chamber of Commerce (NBCC), a business group that released projections on the cost of the House climate legislation at around the same time it joined the official astro-turf lobbying campaign against the bill. The NBCC’s analysis, produced by consulting firm CRA International, is one of many competing cost estimates for the climate bill, each of them relying on different assumptions and models that claim to predict the future price of carbon under the pending legislation.

In
fact, the NBCC analysis states (in Appendix C) that it has assumed
higher CO2 allowance prices than the Environmental Protection Agency
(EPA) analysis of the same House climate bill, thus resulting in higher
estimates for the plan’s impact on real-world carbon prices.

What
does the EPA say about the House climate bill’s likely effect on fuel
prices? Its analysis found a 25-cent per-gallon increase by 2030, or
less than three pennies per gallon per year — small potatoes compared
to the oil price swings of recent years, as the Pew Center on Global
Climate Change pointed out.

Center for American Progress senior fellow Joe Romm has delved further into the claim, promoted by the oil industry,
that a cap on carbon emissions would increase gas prices. Using the
non-partisan Congressional Budget Office’s estimate of allowance
prices, Romm found a per-gallon gas price increase similar to the EPA’s.

Still,
it’s unlikely that Hutchison and Bond would be fazed by economic models
that discredit their case. Although they told reporters at today’s
event that they support cutting carbon emissions, the first page of
their report makes clear that they dislike the very idea of more
moderate energy consumption:

Advocates of climate
change legislation want to increase the price of traditional forms of
carbon-based energy, such as coal and oil, so that consumers are forced
to respond by using less of those forms of energy. Policy-makers call
this putting a price on carbon. Economists call this sending a price
signal. The bottom line is that the price of energy will go up.

More expensive energy from climate legislation can be seen as a new national energy tax on American consumers and workers.

One thing the government’s CARS program — a.k.a. "cash for
clunkers" — has clearly stimulated is commentary. For a policy
involving a shade under $3 billion in federal spending, it has enjoyed
no shortage of media coverage.

In
part this is because the program looks like a big success, and
certainly congressional leaders and the White House have not been
bashful about touting it as such. The original $1 billion allocation
for the program was exhausted within days, and as sales data for August
begins to emerge it is clear that car sales experienced a banner month.

Was CARS a good policy, all things considered? Let’s look at a few of the latest numbers on the program.

There
were approximately 1.17 million vehicle sales in August, which works
out to a seasonally adjusted annual rate of about 14 million vehicles.
June’s sales rate was under 10 million and near the recession low,
while last August’s rate was also about 14 million. Meanwhile, the
August norm in good times was about 16 million.

What does
that say about the value of the program? Well, let’s say that August
sales would have matched June’s sales in the absence of CARS. They
almost certainly would have been higher given economic improvements
between June and August, but for argument’s sake, let’s say they were
the same. We can then estimate how many additional sales CARS produced
and the actual subsidy per new sale.

Here‘s economics blogger Calculated Risk:

If Edmonds.com is correct,
and total sales were 1.17 million…in August, then the tax credit
only generated about 320 thousand extra sales. Of course some regular
car buyers might have put off a purchase to avoid the rush in August,
so this isn’t perfect, but instead of costing taxpayers $4,170 per car
(as announced by DOT), the cost to taxpayers per additional car sold
was close to $7,200.

In other words, CARS just didn’t generate that many new sales. Much of the subsidy went to buyers who would have purchased anyway.

As
it turns out, much of the subsidy also went to people who weren’t
interested in purchasing GM or Chrysler vehicles. While year-over-year
sales figures rose in August for Ford, Honda, and Toyota, sales declined by
15 percent and 20 percent respectively for Chrysler and GM. To the
extent that CARS was designed to help struggling American automakers,
it doesn’t seem to have had the desired effect.

Particularly worrisome is today’s report
that sales fell precipitously in the last week of August — after the
CARS program ended. Rather than generate momentum for the automobile
industry, CARS may have primarily moved sales around. To a certain
extent, it might also have been counterproductive. How so?

Read more…

The story so far: Ed Glaeser recently began an effort to assess the costs and benefits of constructing high-speed rail lines at the New York Times’ Economix blog. Last week, he posted
his first substantive take on the issue, an attempt to estimate direct
costs and benefits from a hypothetical line between Houston and Dallas.

This effort was riddled with errors.
First among them was the choice of route: a Dallas to Houston line that
doesn’t appear on the administration’s plan for high-speed rail
construction.

In this week’s post
he responds to that complaint by saying he picked a "mythical" 240-mile
span between Dallas and Houston "to avoid giving the impression that
this
back-of-the-envelope calculation represents a complete evaluation of
any actual proposed route" — which should lead one to wonder exactly
what he’s doing here.

He’s
unwilling to put his figures on the line as representing a complete
analysis, and yet he’s fairly immodest in detailing his conclusions. He
at least owes his readers an assessment of what is being left out, how
important it is, and how its inclusion might alter his findings.

Glaeser’s
analysis assumes no population growth — he bases ridership on current
metropolitan populations — and no shift in mode share over time,
despite the fact that both Houston and Dallas have rates of transit
ridership well below similar-sized cities (suggesting that with growth,
transit’s share will increase) and are rapidly constructing new systems
to facilitate greater transit use.

If one adjusts anticipated ridership figures to correct for these errors, and if one uses a more realistic figure for the value of business traveler time, then benefits appear to come quite close to or exceed costs of construction.

Today,
Glaeser seeks to estimate the environmental and congestion benefits of
high-speed rail, and he quickly stumbles into error once again. Once
more, he fails to take into account population growth, despite that
variable’s crucial importance to this analysis.

Read more…

The Environmental Protection Agency today granted California's request for a waiver allowing greater limits on auto tailpipe emissions, a move that effectively speeds up the phasing-in of the Obama administration's fuel-efficiency standards in as many as 13 other states.

The EPA billed its decision, which was widely expected and fulfills a campaign promise made by the president, as a return to long-standing precedent of regulating under the Clean Air Act.

But the waiver is likely to bring short-term benefits for California as well as the 13 states that joined its waiver request, permitting that group to impose stricter auto emissions standards between now and 2012.

In 2012, California has agreed to equalize its program with the federal government's, EPA officials explained to reporters today. That paves the way for the Obama administration's 35.5 mpg fuel-efficiency standard to begin taking effect in the 2016 model year.

California lawmakers reacted excitedly to the announcement. Senate Environment and Public Works Committee Chairman Barbara Boxer (D-CA), referencing the Bush administration's controversial denial of the emissions waiver, remarked: "It should be comforting to know that the [EPA] is now putting science and the law back into the driver's seat rather than politics and special interests."

Meanwhile, the auto industry was as glum as could be expected, given that it has already agreed to the Obama administration's fuel-efficiency rules and agreed to drop all lawsuits contesting the waiver request. "We are hopeful the granting of this waiver will not undermine the enormous efforts put forth to create the national program," Alliance of Automobile Manufacturers President Dave McCurdy said in a statement.