How To Spur The Market For Cleaner Cars

When it comes to reducing global greenhouse gas emissions, there's no shortage of whiz-bang technologies to talk about. Often lost in the buzz is an option that's as important as it is boring: energy efficiency. After all, what’s the fun of weatherproofing when there are hydrogen fuel cells to drool over?

That’s too bad, because hydrogen as an energy source is largely hype and will likely remain so for decades, while energy efficiency is the great untapped resource we can get at today. In California over the last few decades, population has doubled and the economy has exploded (even with the current deep recession). During that same time, the state's energy use has remained constant—thanks to energy efficiency (largely government-spurred or mandated, it so happens). In the Pacific Northwest, the interstate agency that directs regional resource issues indicates Washington, Oregon and Idaho can meet 58 percent of new electricity demand through 2015 by improving efficiency alone.

More recently, the buzz around energy efficiency has been growing. Home weatherization is one of the “shovel-ready” projects that received a lot of stimulus money—$327 million in Texas alone [subscription only]. Over at the Environmental Defense Fund, they’re helping companies add millions to their bottom lines through energy efficiency (and conservation) with no corresponding drop in productivity. And RiskMetrics, a New York-based firm that does risk management and financial research, recently issued a report showing how the high-tech industries can find their next big wave of growth in energy efficiency products and services.

But the Big Kahuna of E.E. is automobiles. In the U.S., the transport sector accounts for 29 percent of greenhouse gas emissions and 47 percent of the growth over the last two decades. Corporate Average Fuel Economy standards, which are set by Washington, didn’t change for cars during the entire administrations of both Clinton and Bush—a period during which the auto industry revved up production of gas-guzzling SUVs.

The chair of a National Academy of Sciences report on efficiency, Lester B. Lave, told the New York Times earlier this month, “We could double fuel economy for light-duty vehicles [i.e., cars, SUVs and pickups] by 2035 without changing the size or acceleration of vehicles.” He doesn’t say what that would do to cost, but considering that a Honda Accord today has more horsepower than a 1991 Porsche 911, I think it’s clear that car companies have been applying improvements in engines to power rather than efficiency and could just as easily go the other way. Anyway, there’s precedent for such a jump; fuel economy doubled between 1974, the year before the first CAFE standards took effect, and 1985. That's less than half the time Lave says we could make the same advance starting today. A consortium of environmental groups last week wrote [PDF] President Obama urging that CAFE standards reach 60 mpg by 2025. Today it’s 27.5.

In Europe, where the energy laws aren't written by the extraction industry, they incentivize purchases of more efficient cars, while making high-emitters pay the cost of their pollution, by linking sales tax on new vehicles to their CO2 output. The result is that Europe's cars emit less than half the CO2 per kilometer traveled as ours do.

We could do even better by including annual state registration fees in the internalization of the cost of pollution. For example, a Prius could get 1 percent sales tax and a nominal $10-a-year cost to register, while an Escalade would get knocked with 20 percent tax and a $1000-a-year fee. Lawmakers might want to make the formula revenue-neutral based on existing car sales data and estimates of how the changes to costs of different models would affect the market, or they could formulate the plan to help bolster state coffers.

It seems to me that anyone who can afford a $65,000 car can also afford to pay the real cost it incurs on the rest of us by its outsize contributions to greenhouse gasses and smog. And if not, well, I’m not aware of where in the Constitution it says we have the right to whatever car we want, regardless.

What do you think? Is it a good idea for car owners to pay fees and taxes based on the level of pollution their vehicle emits?

Photo credit: iboy_daniel via Flickr

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