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30 September 2004

California takes on auto industry

In a significant move to reduce global-warming emissions, California regulators approved the first-ever rule in the U.S. limiting such emissions from cars and trucks.

The Wall Street Journal also reported that Russian officials took what appeared to be the first formal steps toward ratifying the Kyoto Protocol, the international treaty that seeks to curb global-warming emissions from industrialized countries.

In California, state environmental officials approved a rule ordering automakers in the 2009 model year to start selling cars and trucks with significantly reduced emissions of carbon dioxide and other gases widely believed to contribute to global warming. Because the vast majority of an automobile’s global-warming emissions come from burning fuel in the engine, the California rule effectively would force the auto industry to markedly improve the fuel economy of vehicles sold in the state. The rule would force a reduction of about 30% in global-warming emissions from vehicles by 2016, when the measure takes full effect, officials said.

The rule—if it sticks—would have wide ramifications. Not only is California the nation’s biggest auto market, but also New York and six other Northeastern states, as well as Canada, are expected to consider adopting the California rule, moves that would triple the number of automobiles required to meet the tougher standard, said the California Air Resources Board, the state clean-air regulatory agency whose board voted unanimously Friday to move forward with the rule.

The rule is a long way from taking effect. The auto industry, even as it is running advertisements trumpeting its new crop of fuel-efficient hybrid gasoline-and-electric vehicles, said it would fight hard to overturn the California measure.

The Alliance of Automobile Manufacturers, the industry’s trade group in Washington, said it would urge the California legislature and California Governor Arnold Schwarzenegger to block the rule. They argue the rule would require so much new technology on vehicles that it would raise the price of the average new vehicle sold in California by about $3,000—about triple the amount that California regulators estimate.

The industry also said it is considering suing California to block the rule. The legal argument: The rule effectively amounts to a mandate for improved fuel economy, a power that, under U.S. law, only the federal government has.

California regulators and their environmentalist supporters insist the state has legal authority to implement the rule. Federal law, in a nod to California’s longstanding smog problems, lets the state enact tougher air-pollution rules than the federal government has enacted—a power California long has used to implement some of the toughest air-pollution regulations in the world.

The Bush administration has ordered a toughening of the nation’s fuel-economy rules, though not enough to please environmentalists. And the administration has rejected the Kyoto treaty’s mandatory emissions cuts, instead asking U.S. industry for voluntary measures to slow emissions growth as the economy expands.

Despite the continuing U.S. opposition, the Kyoto treaty would take effect if Russia ratified it, and Russia appears to be inching toward such a move. The country’s Natural Resources Ministry said last week it had signed all the documents necessary to send the treaty to parliament for approval. Environmental groups now hope the Duma will pass it.

For Kyoto to come into force, the industrialized countries that accounted for at least 55% of the world’s global warming must ratify it. Because the U.S. rejected the treaty, its success now hinges on ratification by Russia.