Supreme Court Deals Win for Environment
Last Monday, the U.S. Supreme Court, in Massachusetts v. EPA, produced what some are calling its most important environmental ruling in a generation, telling the EPA that unless it determines that global warming causes no harm, it must begin regulating CO2 emissions.
The case began with a lawsuit in 1999 by environmental groups, later joined by a number of states, asserting that under the authority of the Clean Air Act, the EPA had to regulate greenhouse gas emissions from cars. The auto industry then joined in the lawsuit, coming to EPA's defense.
The Alliance of Automobile Manufacturers also brought a separate suit against California after the state passed its own law regulating CO2 emissions in 2002. The bill, AB 1493, sponsored by California Rep. Fran Pavley, requires new cars and trucks sold in California to reduce greenhouse gas emissions by 22 percent by 2012 and 30 percent by 2016.
Detroit maintains that California has no right to make its own CO2 regulations because regulating CO2 has to mean regulating fuel economy and that is the prerogative of the Department of Transportation. On that basis, the Alliance of Automobile Manufacturers sued California and two states that adopted its regulations, Rhode Island and Vermont.
Monday's ruling should moot Detroit's lawsuit against California, Rhode Island and Vermont because the Supreme Court made it very clear that CO2 is defined as a pollutant. California has the right to promulgate its own air quality regulations under the Clean Air Act because it had strict air pollution rules in place at the time the act was passed. The Clean Air Act is a minimum standard, and California and other states following California's lead can exceed those standards if they wish.
Courts have stayed the auto industry's lawsuit in California and Rhode Island, but not in Vermont. The judge in Vermont held a hearing on Wednesday to determine if the auto industry's case should go forward. Environmentalists were hoping he would toss it out, but he didn't. Judge William Sessions III said bringing the case to trial means "there will be a full record to go forward to the appeals court or the Supreme Court or a higher authority, if there is a higher authority." The trial begins next week.
While Detroit may not know much about climate science, it doesn't take a weatherman to know which way the wind is blowing. Reacting to the Supreme Court verdict, Dave McCurdy, chief executive of the Alliance of Automobile Manufacturers said, "There needs to be a national, federal, economy-wide approach to addressing greenhouse gases." He also said the auto industry was eager to work with Congress and the EPA to make the changes uniform and "constructive."
In the aftermath of Massachusetts v. EPA, Detroit is now calling for legislation and uniform national standards. California is a threat because it has the power to lift standards higher. The auto industry would prefer to pre-empt California and then get a weak standard passed while the Bush administration is still in charge.
That's why writer Bill McKibben says "... it's more important than ever that those of us who know enough and care enough to take action ratchet up the pressure. The oil companies and the coal barons read the newspapers too -- they know that their days of a free ride are coming to a close, and the only question now is how high the fare is going to be." McKibben calls for people to join a nationwide rally for climate change action on April 14 called Step It Up '07.
In the long run, automakers would be better off if they would embrace strong regulation now, because it might be the only thing that can save them from themselves. If you read the business news, you see that Detroit is not doing very well these days. Ford lost a record $12.7 billion last year and plans to close nine plants by next year.
The U.S. big three are bleeding market share to Asian manufactures. Why is that? Ron Pinelli, president of Autodata Corporation, an industry statistics firm, said it is because "the products that the import brands have are just the ones that are hitting a chord with Americans right now. The domestic makers, the reason their sales are down, is they're still dependent on their trucks."
Shareholders of DaimlerChrysler recently lambasted their CEO for the company's tone-deafness in continuing to produce gas-guzzling SUVs and trucks even after high oil prices prompted Americans to begin the shift to more fuel-efficient vehicles. "How could it happen that you were so surprised by the developments in the United States?" asked banker Henning Gebhardt. "Turning away from gas-guzzling vehicles was not really a surprise."
People want a change because gas prices have gone up and, unlike in the past, it's sinking in that they won't be going back down again. Last week the Government Accountability Office released its first report on peak oil, concluding that we will indeed run out of oil and that production declines could actually begin very soon. While the term "peak oil" is not often used in public debate, the term "energy security" is used and well understood. People are getting the idea that their big gas-guzzling trucks and SUVs are fueling the US war in Iraq, and they don't like it.
If Detroit were willing to change, there could be help available. Sen. Barack Obama (D-Illinois) and Rep. Jay Inslee (D-Washington) have floated a proposal for transition financing that would relieve some of the health care burden of auto companies that volunteered to develop new hybrids and other fuel-efficient technologies. The Apollo Alliance, a labor and environment coalition, has more ideas like this.
But there is little indication that the US auto industry is ready to embrace change. At Ford's upcoming annual meeting on May 10, shareholders will vote on a resolution to set goals for reducing total greenhouse gas emissions from the company's products and operations. The board of directors is recommending a "no" vote on that resolution.
In order to really change, Ford and other automakers may need to get more public pressure. This week at the New York Auto Show, the Freedom from Oil campaign dropped a banner inside the Javits Convention Center challenging Toyota. The banner showed a picture of Toyota's big truck, the Tundra, driving over a globe with the tagline, "Toyota: The Truck That's Changing the Climate."
Mike Hudema, co-director of the Freedom from Oil campaign said: "Toyota can't have it both ways; Toyota can't call themselves an environmental leader while fighting legislation to curb greenhouse gas pollution and accelerating into the truck market."
As a member of the Alliance of Automobile Manufacturers, Toyota is part of the lawsuit against the states that will be heard in Vermont next week. The Freedom from Oil Campaign issued demands that Toyota drop out of that lawsuit; stop lobbying efforts against fuel-economy standards; lead the way in reducing greenhouse gas emissions; and make a concrete production commitment with a timeline for putting Plug-In Hybrid Electric Vehicles onto the roads as soon as possible.
Toyota, Ford and all the others should listen up because it is not only the earth's climate that is changing. It is the business climate too.