California Should Follow Europe's Lead

Europe has a better idea.

And if state politicians followed its lead on curbing carbon-dioxide emissions, they could avoid a lengthy, pointless tug of war and greatly impact how Americans view — and ultimately do their part to combat — global warming.

Here in the U.S., Washington regulators, the auto industry and nearly a dozen states are locked in a battle over who has ownership of CO2 emissions standards.

The only way to cut CO2 is to burn less fuel, and when President Bush signed into law in December new regulations calling for the U.S. fleet to average 35 mpg (6.7L/100 km) by 2020, the Environmental Protection Agency took the opportunity to declare that the last word on the subject, prohibiting individual states from establishing their own CO2 standards.

California and some other states now are suing for the right to require even tougher mileage bogeys of an estimated 43-mpg (5.5 L/100 km) for 2016.

Manufacturers rightly argue there should be only one national fuel-economy requirement. Forcing them to meet a patchwork of standards would be complicated and costly and take regulatory power away from the federal government. It's a battle destined for the Supreme Court.

But here's where the states could get what they're purportedly after — cleaner air — if, like several European countries, they step up to the plate and work the problem from the consumer, instead of the manufacturer, side.

The European Union is on the verge of setting a CO2 standard of 130 g/km, roughly equivalent to 45 mpg. Auto makers have to hit that fleet target, but to encourage buyers to switch to more fuel-efficient vehicles, individual countries are establishing graduated carbon taxes that increase the cost of a gas-guzzler.

In Spain, for instance, vehicles producing less than 120 g/km are exempt from the CO2 tax, which tops out at a stiff 14.75% of the sale price of vehicles emitting more than 200 g/km.

Austria employs a more complicated system, rebating part of its taxes if the vehicle runs on alternative fuels or is powered by a clean diesel.

Europe also has launched CO2-awareness campaigns, encouraging consumers to drive more efficiently, keep tires properly inflated and eliminate unnecessary junk in the trunk that adds weight.

If California took a similar tack, it could control its vehicle-fleet makeup and possibly move the entire country along the path to better fuel efficiency.

The problem today is auto makers make their biggest profits on the least-efficient vehicles. But a state-led surcharge system could help turn that business model on its ear, because buyers willingly would pay more for fuel-efficient vehicles that cut or eliminate their tax bills. Manufacturers could split the difference with consumers, plowing some of those higher profits into fuel-saving technology.

Car makers no longer simply would be charged with building more frugal vehicles, they would have the incentive to sell more as well.

Of course, politicians find it easier to put the burden on the industry than require a commitment from their own constituency. Tax credits, rather than fees, could take away some of the sting. But either way, it would take political will that is less about winning a power struggle and more about actually achieving clean-air goals.

As one of California Gov. Arnold Schwarzenegger's film characters once noted, “I don't know what the problem is, but I'm sure it can be solved without resorting to violence.”

Working both sides of the equation, with the feds pushing auto makers on technology and the states engineering a change in buyer behavior, would get more accomplished than slugging it out in court.

David E. Zoia is editorial director of WardsAuto.com and executive news editor of Ward's AutoWorld.

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