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January 26, 2009

Will Big Three Continue to Resist Climate Change Action?


Last year, Detroit’s Big Three automakers were accused of a lot of things when their chief officers went to Washington, seeking assistance to bridge the worst of the credit crisis. In response, when they finally got help, much of it was hung on strings meant to hurt Detroit’s unionized factory workers. What was taken at face value was Detroit’s commitment to change its long-known resistance to change.


Over the next couple of weeks, we will see whether that pledge holds any water. President Obama has, in his first days in office, made good on a number of campaign pledges. Eventually, his attention will turn to promises for action on climate change. One of the biggest of those is California’s application for a waiver to the Clean Air Act to cut carbon emissions from cars.


The application culminates from a process started by a law passed by California in 2002, the nation’s first law to cut emissions related to global warming. Detroit opposed the law just as ferociously and they have fought attempts to raise fuel economy standards.


Eventually the case landed before the U.S. Supreme Court, which sided with California and gave the Environmental Protection Agency the power to grant waivers to states that asked for them. In the past, such waivers were given freely. California, in fact, has received more than 50 of them over the years. But California was requesting a waiver from a Bush Administration that came to town promising action on carbon emissions, but which left eight years later without taking any action. The EPA’s administrator turned the state down. Not long after, Bush himself said that he would ride out the rest of his term without taking any action on climate change.


Detroit warned that granting California’s waiver would lead to a patchwork of 50 different standards for 50 different states and industrial chaos. They’ve taken their fight into the Obama Administration, arguing that rather than granting California’s request for a waiver that the EPA itself establish a nationwide standard.


They face daunting prospects. The Obama Administration appears inclined to take strong action on climate change. Obama mentioned it prominently in his inaugural address and his appointments to key positions point to an administration serious about the issue. Specifically, the woman he chose to lead the EPA, Lisa Jackson, as soon as she is confirmed said she would revisit California’s request, and both she and her boss have in the past said that they support California’s bid.


On top of that, California is not alone. Seventeen states have said that they will follow California’s lead in cutting carbon emissions from automobiles. All told, those states represent about 40 percent of the American public, and a portion that was critical in winning the White House for Obama.


With 40 percent of the American people covered by what would be the California standard, fears of a 50-patchwork appear to be based more on myth than reality. In reality, you’re likely to see two sets of standards – one for states that adopt California’s standards, and one set of standards for states that don’t adopt any. That is, until the Obama Administration itself crafts its own standards based on the Supreme Court ruling authorizing it to regulate carbon dioxide as a pollutant.


The question is whether Detroit was being genuine in pledging that it would no longer resist change. Some of Detroit’s competitors have already answered that. In a Sunday article in the Los Angeles Times, an official for Honda said that the company believes that carbon standards are inevitable, assumes the Obama Administration will grant the waiver and has made plans to build a fleet of cars that meets California’s standards. If those standards turn out to be as inevitable as Honda thinks, you’ve got to wonder where will rest the competitive edge.


© 2009 North Star Writers Group. May not be republished without permission.


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