NCPA - National Center for Policy Analysis

CALIFORNIA REGULATOR'S $6 BILLION DREAM

October 15, 2004

A new bill yet to be approved by the California legislature would force automakers to reduce greenhouse gas emissions from cars and trucks sold in the state. The new regulations would have new vehicles in 2012 emit 22 percent less carbon dioxide than today?s vehicles and up to 30 percent less by 2016.

Such measures, say the Wall Street Journal, are assured to cost California residents because the only way industry can viably meet those standards is to make dramatically smaller and more fuel efficient cars. All told, it is expected that the cumulative regulatory cost to the state will reach some $6 billion every year. And since Detroit and Japan can't make a new fleet merely for the Golden State, chances are the rest of us will be stuck with these higher costs, too, says the Journal:

  • Sierra Research estimates that the regulations will add at least $3,000 to the cost of new cars.
  • The California Air Resources Board conservatively predicts the new law will add $1,050 per vehicle.

Ultimately, most Americans don't want to drive smaller cars. After all, as government tightened standards in the past, consumers moved to larger vehicles exempt from such restrictions, says the Journal.

In 1980, light trucks (which include SUVs, minivans, and pickups) made up 22 percent of total U.S. vehicle sales. Today, they account for 56 percent and are the majority of sales in 46 states.

Source: Editorial, "Arnold's Greenhouse," Wall Street Journal, October 5, 2004.

For WSJ text (subscription required) http://online.wsj.com/article/0,,SB109693368599935996-search,00.html

 

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