Monday, May 18, 2009

The California Effect

The Obama administration is expected to make an announcement tomorrow that California's strictest-in-the-nation vehicle mileage and emissions requirements shall be adopted as federal policy, as reported by the New York Times. (Governor Schwarzenegger is even flying to DC to take part in the announcement, another sign his May 19 ballot measures are decidedly hopeless.)

The policy will reverse the deregulatory approach of the Bush administration, which directed the Environmental Protection Agency (EPA) to reject the California standards.

Automakers will have to maintain a fleet average of 42 mpg for cars by 2016, which will likely leave a small proportion of gasoline-only cars for sale. Bravo.

The crippled American auto industry is not expected to challenge the announcement. This is welcomed regulation that clearly states a timetable and a national standard. It took federal regulation to get seat belts into our vehicles, and it will take federal regulation to make them more fuel efficient. There are times when government intervention can impede innovation, but this is not one of them. By utilizing a performance-based measure as the target for the future of the industry, the Obama administration is not picking a technology - which would be the wrong approach - instead leaving it up to automakers to pick and choose the most effective strategy for achieving compliance.

The Bush approach was to pick fuel cells, which is a waste of resources when there are better, more feasible technologies, such as hybrids, plug-in hybrids, ultra efficient diesel engines, and even electric cars. Let's hope that President Obama continues to follow California environmental policy; might we even see AB32 go national?

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