Wednesday, January 28, 2009
PRESIDENT OBAMA this week made an initial break from the frustrating inaction of President Bush on curbing greenhouse gas emissions. This reflected a welcome change in attitude at the White House. Unfortunately, the regulatory action that Mr. Obama set in motion is not the best, or even the second-best, approach to curbing climate change. It risks creating conflicting standards across the country and further stressing the domestic auto industry while accomplishing less than could be achieved with a simple tax increase on gasoline.
Mr. Obama took two steps. He ordered the Transportation Department to issue interim fuel-efficiency targets for automakers to meet by the 2012 model year. This is a step toward achieving a national fleet average of 35 miles per gallon by 2020, as mandated by the 2007 energy law.
He also told the Environmental Protection Agency to review a request from California to grant it a waiver to implement its stringent tailpipe emissions law. The District of Columbia, Maryland and 12 other states have adopted the California standard. Six others are considering adopting it. Together they account for more than 45 percent of the sales of new vehicles in the United States. The goal is to reduce carbon dioxide emissions from cars and light trucks in participating states by 30 percent by 2016. The Bush EPA rejected the waiver request, despite support for it from EPA scientists and lawyers, in part because a "patchwork" of standards among states would be unwieldy and costly to industry.
It is a relief that talk of reducing greenhouse gas emissions is giving way to action. But there is a more effective way to reduce such emissions than to order Detroit to start making cars that people may not want to buy, or to let states issue such orders. The answer is to change the incentives so that people want to buy fuel-efficient vehicles; then companies will make such cars, even without commands from Washington. We saw this principle in action last summer when gas prices rose; rail ridership and small-car purchases also increased, while SUVs went begging on dealers' lots.
Mr. Obama and Congress could impose a gradual rise in fuel prices that would not shock the system. To avoid an anti-stimulatory effect, they could rebate the proceeds to taxpayers. Yet the action would send a crucial signal to automakers, auto buyers and investors in alternative energy. And that would establish what the nation and its auto industry ultimately need: a robust market for cars and trucks that reduce our dependence on fossil fuels and protect the environment.