Posted by: greeningwashington | February 6, 2009

A Green Directive and the Ailing Auto

President Obama’s first two weeks in office have already signaled a significant shift from the broken polices of the past, as he recently directed the EPA to reconsider California’s application to further regulate automobile emissions. President Obama also directed the Transportation Department to “draw up rules to implement a 2007 law requiring a 40 percent improvement in gas mileage for autos and light trucks by 2020.” (New York Times, 2009).  Under the new regulations, automobile makers must update their technology by the time their 2011 models roll off the line. President Obama has been more outspoken on this issue than the past administration — priorities have been rearranged.

Either way, the automobile industry has stalled its way into a crisis. American automakers must restructure in order to (i) regain competitiveness against foreign companies, and (ii) reduce America’s over-consumption of oil, which leads to higher oil prices in the long-run and disincentives for prospective car buyers.

Instead of complaining about the modest fuel economy (CAFE) standards, which would require a fleetwide average of 35 miles per gallon by 2020, as provided for in the Energy Independence and Security Act of 2007, automakers must begin to take action and accept responsibility for the quality of their products.

Citing statistics from a number of governmental agencies such as the Federal Highway Administration, the Environmental Defense Fund released statistics in 2007 that reported the United States is responsible for nearly half of the greenhouse gases emitted by automobiles globally, despite the fact that we host 5 percent of the world’s population and only own 30 percent of the vehicles produced globally. According to the EPA, the transportation sector is responsible for the second largest CO2 emissions in the United States. Within that sector, automobiles and light-duty trucks account for almost two-thirds of emissions.

In the face of solid scientific evidence linking greenhouse gases like carbon dioxide to the expedient warming of the globe, (one must distinguish between geological time and the day-to-day perception of time) American automakers and their international counterparts must realize certain standards are necessary. Automakers must listen to the concerns of their consumers and not scuff their feet in the face of technological innovations and changes.

The following is a selection from a 2007 NPR report:

“The technology already exists to make vehicles get at least 10 more miles per gallon; supporters of raising fuel-economy standards say it could be incorporated into cars in a cost-effective manner.

One study found that, when gas costs more than $2.30 a gallon, technologies that raise fuel-efficiency to around 33 mpg across the fleet pay for themselves within three to four years.

According to Tom Cole of the Center for Automotive Research, even big cars could save a lot of fuel with improvements, such as six-speed automatic transmissions, cylinders that shut down when they are not needed, and improved aerodynamics and materials. For an extra $1,000, Cole says, a conventional, gas-powered car could go 25 percent farther on a single gallon of gas.”

According to the United States Department of Energy, 62.4 percent of  the fuel’s energy in gasoline-powered vehicles is lost in the internal combustion engine. Sixty two percent is inefficient to say the least.  

Despite the technology available, the Big Three have continued to stall and have blamed everyone else — labor unions, regulators, environmental litigators, etc. — for their financial demise. Although, the automakers may have the financial sector to thank for the lack of money available for new investors interested in new automobile technology. 

While the government can push regulations and press the automakers to change their products, ultimately, it is their choice to renovate or deteriorate.

Promoting material wealth and unfettered growth over a morally conscious market is certainly the Achilles’ heel of our system. I just hope that John Thain’s $87,000 rug debacle serves as a warning to all top executives — even those in Washington.

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