REPORT: Obama To Allow California To Set Auto Emissions Standards

President Obama plans to remove federal opposition to statewide automobile emissions standards today, allowing California and other states to regulate emissions above-and-beyond federal guidelines and possibly putting political expediency above good public policy.

According to the New York Times, President Obama will announce later today a series of environmental initiatives, the cornerstone of which would grant waivers to states seeking to enforce their own emissions laws.

California passed a law in 2005 requiring automakers to meet stricter auto emissions standards, only to be denied a waiver from the EPA and forced to sue the government along with approximately a dozen other states to enforce the states' guidelines.

This move by the Obama administration will force some automakers to make adjustments to their lineup sooner than required by federal laws passed in 2007. They've argued vehemently against the bills saying they'd be forced to make their cars meet different standards for different states. This is partially true, though most states follow California's lead. However, the potential for a patchwork quilt of emissions standards across the country becomes an even greater possibility with this precedent-setting decision on the part of the nascent administration.

President Obama will also likely have the Department of Transportation draft guidelines to get automakers to comply with enhanced mileage requirements laid out in the federal law enacted more than a year ago.

Given the timing of these actions, Obama is trying to show he's strongly committed to moving forward on environmental issues and win support among his green-focused constituency. Additionally, Obama avoids having to spend any political capital on this while in the middle of his fight for a stimulus package because both of those moves are purely executive, requiring no significant action on the part of Congress. However, by also not writing the guidelines first, the Obama administration has put political expediency ahead of good policy and working with Congress to create and reveal a more holistic energy package from the start.

Allowing CARB to set the emissions standards for the country takes the ball away from the federal government, makes the possibility of a patchwork quilt of emissions standards an actual possibility and fails to provide the necessary monies to automakers to help make the shift. That's not good business and it makes it difficult for automakers to build for the future with constantly shifting goals.

Lastly, whether it's CAFE or CARB's regulation of emissions, the issue isn't fixing supply of vehicles with better fuel economy, it's changing demand. Remember, CAFE does not directly offer incentives for customers to choose fuel efficient vehicles, nor does it directly affect fuel prices. Rather, it attempts to accomplish these goals indirectly by making it more expensive for automakers to build inefficient vehicles by introducing penalties. CAFE advocates assert most of the gains in fuel economy over the past 30 years can be attributed to the standard itself, while opponents assert economic forces are responsible for fuel economy gains, where higher fuel prices drove customers to seek more fuel efficient vehicles. The truth is probably somewhere in the middle. The truth is, the best policy for increasing overall fuel economy is to change consumer habits, and that means increasing the costs of low fuel economy vehicles. Countless automotive experts have claimed the best way to do that is not through mandating automakers make more efficient cars, it's to increase, artificially, the price of gas. But that would require more political capital than Obama — or any politician — appears willing to spend.

So, in a world of half measures, President Obama's decision may make sense. But in a utopia, it's nowhere close.

[NY Times]