Cleaner Cars Through Tailpipe Trading

Proposal would extend California's benchmarks on total acceptable volume of greenhouse gas emissions from tailpipes to the nation as a whole, with a critical new wrinkle: setting up a system of tailpipe emissions "credit" trading.

Published: 22-Mar-2004

If you are worried, as you should be, about U.S. dependence on unreliable oil sources, or the environmental threats of air pollution and global climate change, then look no further than your driveway or the highway for one of the main culprits. Our rides account for 40 percent of U.S. oil consumption and one-third of America's carbon dioxide emissions, generally conceded to be a key contributor to potentially catastrophic global warming. But as former Clinton administration environmental expert Roger Ballentine and the Progressive Policy Institute's Jan Mazurek argue in a new report from PPI, it's time for a new approach for reducing dependence on oil, and reducing the ugly stuff spewing out of our tailpipes, through a system that combines controls on emissions with market-based incentives for spurring new automotive technologies.

Dating back to the energy crisis of the 1970s, the main vehicle for dealing with automotive emissions has been CAFE -- Corporate Average Fuel Economy standards that require automakers to achieve certain overall gas mileage levels. CAFE did its job, especially in the early years, but recent efforts to improve CAFE standards -- or to reform them to account for the massive increase in use of gas-guzzling SUVs -- have gotten perpetually bogged down in a stale Congressional debate over the feasibility of tougher rules and the impact on consumer choice. The gridlock has been immeasurably increased by the determination of the Bush administration to pursue what Ballentine and Mazurek call a "Drain America First" strategy focused on increasing domestic oil production and ignoring action to clean up cars until hydrogen fuel cell technologies come along to save the day, some day over the horizon.

California showed the way out of this gridlock on cleaner cars and oil dependency in 2002, with an initiative that shifted the focus from what goes into cars -- gasoline and other fuels -- to what comes out of their tailpipes -- those nasty emissions. Ballentine and Mazurek propose to extend California's benchmarks on total acceptable volume of greenhouse gas emissions from tailpipes to the nation as a whole, with a critical new wrinkle: setting up a system of tailpipe emissions "credit" trading to give auto manufacturers a strong economic incentive to innovate and improve fuel efficiency.

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