From Economic Reporting Review by Dean Baker March 29, 2004 The Economy and Fuel Efficiency Standards
Kerry Is Sticking With Plan to Raise Auto Fuel Efficiency Danny Hakim New York Times, March 26, 2004, Page C1 http://err.c.topica.com/maab5zdaa5xULbnpHI6b/ This article discusses a proposal by Senator John Kerry to increase fuel efficiency standards for automobiles by 50 percent by 2015. The article includes a reference from a Bush Administration official to a report from the Energy Information Administration (EIA), that shows that this proposal would "cost 450,000 jobs and result in $170 billion in 'lost economic output' from 2003 to 2020. It would have been useful to point out that $170 billion in lost output corresponds to approximately 0.07 percent of projected GDP over this period. In other words, the projections from the EIA model imply that the higher efficiency standards will cost the country approximately 7 cents on every hundred dollars of income. It is also worth noting that the projected economic costs of higher fuel efficiency standards would be dwarfed by other recent policy changes, such as the expansion of the military over the last three years. Standard economic models would show that this build-up of the military leads to far greater loss of jobs and declines in economic output than a proposed increase in fuel efficiency standards. Neither the Times or Post has run a single article discussing the economic costs of this military build-up. ----- http://www.nytimes.com/2004/03/26/business/26fuel.html Kerry Is Sticking With Plan to Raise Auto Fuel Efficiency By DANNY HAKIM Published: March 26, 2004 DETROIT, March 25 - In the face of rising gasoline prices and stagnating fuel efficiency, Senator John Kerry is sticking with a plan he backed in the Senate to increase the nation's fuel economy standards 50 percent by 2015. That would be the largest increase, by far, since automotive fuel economy standards were first imposed after the oil shocks of the 1970's. Few think even Mr. Kerry, Democrat of Massachusetts, could actually make good on such a plan if he were elected president, because there is too much opposition from Congressional Republicans and Midwestern Democrats. When Senator Kerry and Senator John McCain pushed such a proposal two years ago, it failed in the Senate on a 62-to-38 vote. But Mr. Kerry's emergence as the likely Democratic nominee has reinvigorated debate in Detroit and Washington about the nation's plummeting fuel economy. Environmental groups say they believe that bolstering fuel regulations would be Topic A, or close to it, in a Kerry presidency. The Bush campaign says the Kerry plan would have a devastating effect on a region already hemorrhaging manufacturing jobs. Automakers say they do not have the technology to meet his numbers. And a who's who of top Democrats in Michigan, considered a battleground state, have been pressing Mr. Kerry to scale back. "We've all talked to the Kerry camp individually, and together," said Gov. Jennifer Granholm of Michigan, a Democrat whose husband is one of two state campaign chairmen for Mr. Kerry. "We've had meetings with their people, there's been a series of discussions on this," she said, adding, "he is not wedded to a particular miles per gallon and wants to work with the auto manufacturers and do this in a cooperative fashion." Senator Carl Levin, Democrat of Michigan, also said in an interview that Mr. Kerry was "not locked into any particular approach or any particular number." But the Kerry campaign Web site says "we should increase our fuel economy standards to 36 miles per gallon by 2015," and the senator's campaign staff said he was sticking to that number, which is similar to his Senate proposal. Cars and trucks, combined, are now required to average about 24 miles a gallon when they are tested in a lab by the Environmental Protection Agency. Out of the lab and on streets and highways, however, cars and trucks averaged 20.4 miles a gallon in the 2002 model year, the lowest point since 1980. And that figure excludes the largest and least-fuel-efficient vehicles, like Hummers, which are exempted from the regulatory system altogether. Any current discussion of fuel economy is colored by the conflict in the Middle East, rising gas prices and surging global demand for oil, particularly in China. But amending corporate average fuel economy rules - known as CAFE standards - is also fraught with questions about jobs and safety. Jobs, because the traditional Big Three - General Motors, the Ford Motor Company and the Chrysler Group division of DaimlerChrysler - argue that raising standards would benefit foreign-based rivals, particularly an automaker like Honda that does not sell the largest vehicles. Safety, because one way to improve fuel economy is to make lighter vehicles, which tend to fare worse in crashes with heavier ones. But the safety question has been complicated by the boom in sport utility vehicles and large pickup trucks, which are heavy but less stable than cars. And a recent government study said lightening the heaviest S.U.V.'s and pickups would save lives by making them less lethal in collisions with other vehicles. The Kerry approach stands in contrast to the Bush administration's plan to overhaul fuel economy standards for light trucks, a regulatory category that includes S.U.V.'s, pickups and minivans. Though the planning is in its early stages, administration officials have said saving gas is not their top priority. They have envisioned a plan that would potentially do away with a single fleetwide average for light trucks and replace it with multiple mileage targets, depending on size or weight, on the theory such a plan would save lives. The two sides cited competing studies to bolster their arguments. Scott Stanzel, President Bush's campaign press secretary, said an analysis by the Energy Information Administration concluded that the Kerry plan would cost 450,000 jobs and result in $170 billion in "lost economic output" from 2003 to 2020. David Wade, a spokesman for Mr. Kerry, said his candidate "won't accept George Bush's false choice between the environment and jobs." Mr. Kerry has said his plan would create half a million jobs because it would offer incentives for domestic manufacturers to retool plants to build more efficient vehicles, pay for advanced technology research and create tax incentives for consumers to buy clean vehicles. The United Auto Workers, which has endorsed Mr. Kerry, has not embraced either plan. The union opposed the Kerry plan in 2002 and recently joined with the Sierra Club to write an essay for The New York Times's Op-Ed page attacking the outlines of the Bush plan, saying it would "hurt the environment, auto workers and the economy." Advertisement While campaigning, Mr. Kerry has framed fuel economy as a security issue. "The threats that America faces today don't just come from gun barrels, they come from oil barrels - and we need to disarm that danger," he said in a speech last year at the Detroit Economic Club. President Bush has looked to hydrogen cars as a way to end America's dependence on crude oil imports, but many automakers and analysts see that futuristic technology as being decades away. Most of the industry has long fought against significant increases in fuel economy standards, arguing that they would hinder the ability to build light trucks, which now account for more than half of new-car sales in the United States. Automakers have also said it is hard to sell the most fuel-efficient vehicles, though the early returns for hybrid electric vehicles sold by Toyota and Honda indicate a significant market. Dieter Zetsche, the chief executive of the Chrysler Group, said in a recent interview that when it came to cutting fuel consumption as much as Mr. Kerry has proposed, "we can improve, we will improve, but it's technologically not possible to do it that fast, and that much." Gloria Bergquist, a spokeswoman for the Alliance of Automobile Manufacturers, which includes both domestic and foreign automakers, said: "We certainly have disagreed with him about how extreme his CAFE proposal was, but we have met with him, talked with him and continued to work with him. Sometimes the position you have as a senator is different from the position you have as a president." The 2002 Senate proposal backed by Mr. Kerry and Mr. McCain was bitterly opposed by the auto industry. The Alliance of Automobile Manufacturers said it would "effectively eliminate sport utility vehicles, minivans and pickup trucks." G.M. sponsored rallies with the U.A.W. at plants in Michigan, Ohio and Wisconsin to oppose the measure and said it would lead to 100,000 lost jobs. Environmental groups argue that automakers in Detroit, Japan and Germany have the technology to build more efficient vehicles but will not do so unless prodded by regulation. They note that Ford plans this year to sell a hybrid S.U.V. that will get 30 to 40 miles a gallon. And California, which is authorized to set its own air quality standards, has already moved to force the industry to cut emissions of smog-forming pollutants and global-warming gases. "Raising the CAFE standards has been a major priority for the environmental community to cut our oil dependence, and pollution," said Daniel Becker, a global warming expert at the Sierra Club. "We're delighted it has been a major priority of John Kerry." E.P.A. Seeks Comment DETROIT, March 25 (Reuters) - The Environmental Protection Agency has opened the door to possible revision of its fuel economy tests. The move came in response to a petition filed nearly two years ago by an environmental group, the Bluewater Network, which contends the current auto stickers overstate fuel economy values. In an advisory on its Web site, the E.P.A. said Wednesday that it would publish a notice in the Federal Register soliciting comment from all interested parties on Bluewater's call for a revision of its test procedures within 120 days. Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuels list archives: http://infoarchive.net/sgroup/biofuel/ Please do NOT send Unsubscribe messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Yahoo! Groups Links <*> To visit your group on the web, go to: http://groups.yahoo.com/group/biofuel/ <*> To unsubscribe from this group, send an email to: [EMAIL PROTECTED] <*> Your use of Yahoo! Groups is subject to: http://docs.yahoo.com/info/terms/
