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Analysts Discuss Obama's New Fuel Standards

By The NewsHour, The NewsHour - May 19, 2009

GWEN IFILL: Today's announcement appeared to mark a rare meeting of the minds from parties usually at opposite ends of the table, but there are still plenty of loose ends to come.

We explore that with Dave McCurdy, president of the Alliance for Automobile Manufacturers, which represents 11 domestic and overseas carmakers, and Daniel Becker, the founder of the Safe Climate Campaign, an advocacy group. He's been working on global warming issues for nearly two decades.

So here you sit at the same table in agreement. Let's talk about this agreement.

But, first of all, how much, Mr. McCurdy, will it affect someone who goes out to buy a car? I read somewhere today that this agreement will add $600 to the cost of a car; I read somewhere else today that it would add $1,300 at a minimum to the cost of a car. Which is it?

DAVE MCCURDY, Alliance of Automobile Manufacturers: Well, government figures are an average of $1,300 per car, again, over the life of this program. So any advanced technology, any new technology is going to cost more.

And the key here, though, is that we expect fuel prices to increase over time. And if consumers purchase a fuel-efficient vehicle, they do improve savings for them, improves their cost at the pump, but this does cost automakers up front.

GWEN IFILL: And how is it that they suddenly agreed to this? This becomes, I guess, the obvious question, which is, if this has been on the table for years, this discussion about higher fuel efficiency, why now?

DAVE MCCURDY: It was a unique opportunity. It was convergence of concerns about climate and energy security, but there was a new administration and I think a president who is talking about providing solutions.

We approached the administration and said, "We think there's an opportunity here, and we'd like to see an Obama national approach." They seized that. They created the table. They pulled people together. And it took a lot of work.

In your segment with Carol Browner was absolutely correct. She deserves a lot of credit, as does the president and her team, to really pulled people together to find an outcome.

DANIEL BECKER, Safe Climate Campaign: The automakers are weaker. They've run out of rope. The Congress won't listen to them anymore. The Supreme Court told the government to get with it and create standards like these. And the president finally pulled the plug and said, "All right, we're going to get you guys together and we're going to make this progress."

This could have happened 20 years ago, but the auto companies fought it year after year, but it's a little bit like painting a bridge. By the time you finish painting the bridge, it's time to start at the other end.

And now it's time to thank the administration for the great work that they've done and implement this agreement, but it's also time to begin to plan the next phase, which is, after 2016, we need to have tougher standards so that we can actually break our addiction to oil and begin to look at and drive new vehicles with new technology and get rid of the internal combustion engine.

GWEN IFILL: You're already moving -- you're already ahead of today's agreement on to the next thing?

DANIEL BECKER: Well, what we've learned is, if we just wait for the industry to do it themselves, it won't happen. And we have the technology to implement this agreement and then some, but we need to begin to move very quickly, if we're going to make real progress.

DAVE MCCURDY: They accept the national program because the stringency will be there. They will be able to count the greenhouse gas reductions. When you increase fuel economy by 30 percent, you have a commensurate reduction in greenhouse gases.

And we're not here to debate. And there's revisionist history here. But I will tell you, we supported the energy bill two years ago, which increased standards by 40 percent. That was historic. We now are accelerating that timeline from 2020 to 2016. We actually initiated this with the administration in working with them.

So it's a very positive thing. And the important thing is that the administration was able to bring together not only automakers, but the different agencies and the states said, "We need to harmonize this." And then they reached out to the environmental community and said, "Look, we all share the same goal, and that is reducing greenhouse gases and improving fuel economy."

DANIEL BECKER: There's another very important piece of California's power. They're going to begin this program by regulating for the next two to three years while this agreement begins to be implemented. And, very importantly, they have preserved their power to regulate at the end.

Because California is really the engine that has made this effort move. Whenever it's come to cars, California has been the first out of the gate. And their ability to set the 2002 30 percent reduction in global warming emissions was the thing that the president has now nationalized, but had they not done that, we wouldn't be here today. So California must preserve its ability to move forward in the future.

DAVE MCCURDY: Well, Gwen, first of all, it doesn't matter how many cars you make. It matters how many cars they buy, the consumers buy. When we had $4 gas...

GWEN IFILL: That's how this efficiency is measured?

DAVE MCCURDY: That's how it's measured, correct. And when we had $4 gas, we couldn't make enough hybrids or fuel-efficient small vehicles. But now that gas is at $2, then we see lots full of these.

So it takes a combination. And I think, in this case, it's going to take some incentives. Government has provided incentives for tax credits for hybrid purchases.

GWEN IFILL: I heard Carol Browner not answer that question when Judy asked her about that.

DAVE MCCURDY: Well, it may be proven true for that, but they are supporting cash for clunkers, which is a fleet modernization bill that worked in Germany, increased sales by 22 percent, and improved fuel efficiency, and got old gas-guzzlers off the road, and replaced them with newer vehicles.

You know, you were talking about a weakened industry. It's weakened because we have a credit crunch; we had a financial collapse; we have a recession; people lost value in their home. And the autos are the second-largest purchase that a consumer makes.

We have to restore that confidence there. And that's what the government has to do. What we have to do is produce technology, continue to make cars that people want to buy.

I represent an industry that's global in nature, and so it's not just Detroit. It's Japanese manufacturers and German manufacturers, Europeans that all came together. They stood with the president today because they signaled that this was an historic event and a new beginning.

GWEN IFILL: Mr. Becker, is the car industry ready to do this?

DANIEL BECKER: I hope so.

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