Bill would set car fees, rebates
Say you buy a car that coughs out a lot of greenhouse gases. Should you pay more for the privilege of polluting?
And say your neighbor buys a car that spews out far less. Should he be rewarded for helping to save the planet?
This week, the California Assembly is expected to vote on the California Clean Car Discount Act, which, if passed, would be the nation’s first “feebate” law, imposing charges and granting rebates based on a vehicle’s emission of carbon dioxide and other gases.
One-time registration fees of up to $2,500 would be levied on new gas guzzlers, such as Hummers, Dodge Vipers and Chevy Tahoes. Some cleaner sport utility vehicles, pickups and minivans would be exempt from any charge, while the Toyota Prius, Honda Civic, Nissan Sentra and other fuel-efficient cars would get hefty rebates.
The bill, AB 493, is among a raft of measures under consideration in the Legislature and, behind the scenes, by officials at California’s powerful Air Resources Board, to press the auto industry to do its part to fight global warming.
“We put 1.8 million vehicles a year on the road in California,” said Assemblyman Ira Ruskin (D-Redwood City), the bill’s author. “We have to find ways to get more clean cars on the road and more dirty cars off. There’s no time to waste if we’re to avoid the catastrophes ahead from global warming.”
A previous version of the bill was narrowly defeated in the Assembly in June after seven Democrats from the Los Angeles region, under heavy lobbying from auto dealers, abstained from the vote. Strategists say supporters of the bill need five of those seven legislators if it is to pass this time.
The fence-sitters included Mike Davis (Los Angeles), Mervyn Dymally (Compton); Hector De la Torre (South Gate); Tony Mendoza (Artesia); Felipe Fuentes (Sylmar); Edward Hernandez (West Covina) and Jose Solorio (Santa Ana).
This time the measure may have a better chance. The state is reeling from the Bush administration’s refusal to allow enforcement of a 2002 state law to cut carbon emissions from vehicle tailpipes by 30% in the next eight years. Unless that decision is reversed in court, overruled by federal legislation or withdrawn by the next president, those tons of emissions must be cut by other means.
Feebate laws have been enacted in Canada, Finland and France, and in the European Union overall, countries are moving to tax cars based on carbon emissions. In the United States, feebates have also been considered in New York, Massachusetts, Connecticut and Vermont.
“Industry argues that market signals don’t exist for consumers to buy low-greenhouse-gas and fuel-efficient vehicles,” said Daniel Sperling, director of the UC Davis Institute of Transportation Studies and a member of the Air Resources Board. “This bill fixes the market forces.”
Even if California is able to enact limits on tailpipe emissions, other strategies would be needed to meet the state’s broader commitment to slash heat-trapping gases to 1990 levels over the next 13 years, officials say. That goal requires radical cuts in transportation emissions, which are responsible for about 40% of California’s carbon footprint, according to the air board.
While the board has not formally endorsed the bill, Chairwoman Mary Nichols said, “We’ve been looking at feebates for a long time. A modest break for consumers to buy cleaner cars is a good deal.”
Auto companies, whose profit margins are higher on big cars, vigorously oppose feebates.
“Feebates harm businesses and consumers who need a range of vehicles,” said Gloria Bergquist of the Washington, D.C.-based Alliance of Automobile Manufacturers, noting that carbon emissions will drop due to a new average fuel economy standard of 35 miles per gallon by 2020.
Brian Maas, a lobbyist for the California Motor Car Dealers Assn., predicted a dip in sales tax revenue from the law. “If it is successful, and more people buy fuel-efficient vehicles, those are smaller, less expensive cars. We’re talking about a hit to local and state government in the millions of dollars.”
Under the bill, the air board would rank passenger vehicles, beginning with 2011 models, according to the amount of carbon dioxide and other greenhouse gases they emit. Fees and rebates would be applied on a sliding scale. About a quarter of vehicles would be unaffected, and about 35% would be charged a fee collected by auto dealers and sent to the State Board of Equalization. The fees would pay for rebates to about 40% of purchasers.
The Union of Concerned Scientists, an advocacy group that worked closely with Ruskin, estimates that California’s emissions could drop by as much as 57 million metric tons a year by 2030 as a result of the feebates. That would be equivalent to taking about 9 million cars and trucks off the road.
Opponents, including automakers and the United Auto Workers, warn that the fees could have a disproportionate effect on lower-income buyers who may need large family cars and businesses that haul equipment.
“What if some poor guy in Watts retires and says, ‘I want an SUV,’ ” Dymally said. “Do you punish him for that?”
The bill exempts low-income buyers -- defined as those at or below twice the federal poverty level -- as well as businesses with fewer than 25 workers, from surcharges.
And even for those without exemptions, “there would be a tremendous amount of choice in each category,” Ruskin said, noting that cleaner SUVs, pickups and minivans would qualify for rebates.
Advocates counter that air pollution aggravated by global warming disproportionately affects poor neighborhoods. A cleaner fleet, they say, would reduce the asthma, heart disease and other illnesses that plague poor communities.
So far, 83 organizations, nearly twice as many as last year, have endorsed Ruskin’s bill, including the American Lung Assn. and the Silicon Valley Leadership Group, a business coalition. But the opposition has powerful allies too, including the California Chamber of Commerce.
Gov. Arnold Schwarzenegger, a Hummer driver, has yet to take a position.
Regardless of whether the feebate bill passes, pressure is mounting to find new ways to deal with transportation emissions.
In a letter last month, Senate President Pro Tem Don Perata (D-Oakland) urged the air board to move beyond the battle with the federal government over tailpipe standards and “to act with appropriate speed and creativity” on such measures as “efficient car purchase incentives, smart growth investments, increased transit usage and other means.”
Some environmentalists want the board to use its “zero-emission vehicle” regulations to require auto companies to move to a 100% hybrid-electric fleet by the end of the next decade. Others want to bring automakers under a statewide cap on emissions so that they would have to seek offsets in order to sell vehicles that emit more than a certain level of greenhouse gases.
State Atty. Gen. Jerry Brown, the Legislature and the air board are all grappling with how to encourage cities and counties to control sprawl and promote mass transit as a way to reduce driving.
State officials are optimistic that they will win their court fight against the federal Environmental Protection Agency over tailpipe standards and make a big dent in auto emissions through regulations that 16 other states have pledged to adopt. But they intend to forge ahead with other strategies in the meantime.
“Everything is on the table,” Sperling said.
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Charges or payouts
California’s proposed “feebate” will impose a one-time charge on vehicles that emit high levels of greenhouse gases and offer rebates on those with a lower carbon footprint. Here are some of the losers, winners and unaffected.
Chevy Tahoe: $1,300
Ford F-150: $1,200
Dodge Ram 1500: $1,000
Chevy Silverado 1500: $900
Toyota Prius: $2,500
Toyota Yaris: $2,100
Honda Fit: $1,900
Honda Civic, Toyota Corolla, Ford Escape hybrid: $1,800
Kia Rio: $1,700
Hyundai Accent, Mercury
Mariner hybrid: $1,500
Nissan Sentra, Toyota Highlander hybrid: $1,400
No fees or rebates
Chrysler Town & Country
Source: Union of Concerned Scientists (based on 2006 models)