Say you buy a car that coughs out a lot of greenhouse gases. Should you pay more for the privilege of polluting?
And say your neighbor buys a car that spews out far less. Should he be rewarded for helping to save the planet?
This week, the California Assembly is expected to vote on the California Clean Car Discount Act, which, if passed, would be the nation's first "feebate" law, imposing charges and granting rebates based on a vehicle's emission of carbon dioxide and other gases.
One-time registration fees of up to $2,500 would be levied on new gas guzzlers, such as Hummers, Dodge Vipers and Chevy Tahoes. Some cleaner sport utility vehicles, pickups and minivans would be exempt from any charge, while the Toyota Prius, Honda Civic, Nissan Sentra and other fuel-efficient cars would get hefty rebates.
The bill, AB 493, is among a raft of measures under consideration in the Legislature and, behind the scenes, by officials at California's powerful Air Resources Board, to press the auto industry to do its part to fight global warming.
"We put 1.8 million vehicles a year on the road in California," said Assemblyman Ira Ruskin (D-Redwood City), the bill's author. "We have to find ways to get more clean cars on the road and more dirty cars off. There's no time to waste if we're to avoid the catastrophes ahead from global warming."
A previous version of the bill was narrowly defeated in the Assembly in June after seven Democrats from the Los Angeles region, under heavy lobbying from auto dealers, abstained from the vote. Strategists say supporters of the bill need five of those seven legislators if it is to pass this time.
The fence-sitters included Mike Davis (Los Angeles), Mervyn Dymally (Compton); Hector De la Torre (South Gate); Tony Mendoza (Artesia); Felipe Fuentes (Sylmar); Edward Hernandez (West Covina) and Jose Solorio (Santa Ana).
This time the measure may have a better chance. The state is reeling from the Bush administration's refusal to allow enforcement of a 2002 state law to cut carbon emissions from vehicle tailpipes by 30% in the next eight years. Unless that decision is reversed in court, overruled by federal legislation or withdrawn by the next president, those tons of emissions must be cut by other means.
Feebate laws have been enacted in Canada, Finland and France, and in the European Union overall, countries are moving to tax cars based on carbon emissions. In the United States, feebates have also been considered in New York, Massachusetts, Connecticut and Vermont.
"Industry argues that market signals don't exist for consumers to buy low-greenhouse-gas and fuel-efficient vehicles," said Daniel Sperling, director of the UC Davis Institute of Transportation Studies and a member of the Air Resources Board. "This bill fixes the market forces."
Even if California is able to enact limits on tailpipe emissions, other strategies would be needed to meet the state's broader commitment to slash heat-trapping gases to 1990 levels over the next 13 years, officials say. That goal requires radical cuts in transportation emissions, which are responsible for about 40% of California's carbon footprint, according to the air board.
While the board has not formally endorsed the bill, Chairwoman Mary Nichols said, "We've been looking at feebates for a long time. A modest break for consumers to buy cleaner cars is a good deal."
Auto companies, whose profit margins are higher on big cars, vigorously oppose feebates.
"Feebates harm businesses and consumers who need a range of vehicles," said Gloria Bergquist of the Washington, D.C.-based Alliance of Automobile Manufacturers, noting that carbon emissions will drop due to a new average fuel economy standard of 35 miles per gallon by 2020.
Brian Maas, a lobbyist for the California Motor Car Dealers Assn., predicted a dip in sales tax revenue from the law. "If it is successful, and more people buy fuel-efficient vehicles, those are smaller, less expensive cars. We're talking about a hit to local and state government in the millions of dollars."
Under the bill, the air board would rank passenger vehicles, beginning with 2011 models, according to the amount of carbon dioxide and other greenhouse gases they emit. Fees and rebates would be applied on a sliding scale. About a quarter of vehicles would be unaffected, and about 35% would be charged a fee collected by auto dealers and sent to the State Board of Equalization. The fees would pay for rebates to about 40% of purchasers.
The Union of Concerned Scientists, an advocacy group that worked closely with Ruskin, estimates that California's emissions could drop by as much as 57 million metric tons a year by 2030 as a result of the feebates. That would be equivalent to taking about 9 million cars and trucks off the road.
Opponents, including automakers and the United Auto Workers, warn that the fees could have a disproportionate effect on lower-income buyers who may need large family cars and businesses that haul equipment.