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Get this. The vehicles that automakers claimed was impossible years ago are exactly the ones they have featured at the LA Auto Show. Roland Hwang, the transportation program director for the Natural Resources Defense Council's energy program, walked the show this year and helped hand out the Green Car of the Year award to the Chevrolet Volt. As he did so, he was reminded of a time when automakers were adamant that diesels and clean air do not go hand in hand, that powerful vehicles cannot have low emissions and that no one will buy electric vehicles. My, how the times have changed!

Twelve years ago, Hwang testified in front of the California Air Resources Board and said there is no need to choose between clean air and fuel efficiency. At the time, he writes on the NRDC Switchboard, automakers claimed that we could have one or the other, but not both. Now, manufacturers like Audi and Volkswagen have clean diesel vehicles that offer great gas mileage and meet stringent air quality regulations. In 2004, automakers opposed the Pavley Clean Air Standards, saying that the CO2 emission limits proposed will cost consumers big money. Now, engines that meet this regulation are a prime selling point. Finally, automakers of the past were certain that no one would want electric vehicles, but now they are racing to get their plug-ins and EVs out to market.

So, what's the lesson to be learned in all of this? Hwang writes that we continue to push for vehicles that keep our air clean and have lower environmental impact than the vehicles that came before. If automakers resist, as they will, we should pass a regulation to get their creative juices flowing and, soon enough, what they once claimed was impossible will be the center of their marketing campaigns.

[Source: NRDC Switchboard]


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  • 20 Comments
      • 3 Months Ago
      If by regulation you mean high gasoline prices and cultural changes resulting from the end of a cyclical consumptive trend (SUV boom), then I agree.

      If by innovation you mean that auto manufacturers are responding to legislation that acts as a barrier to entry for foreign competitors and that discourages upstarts by increasing the complexity of new products and the capital necessary to develop them.

      This is not innovation. The DOE is manipulating the supply and demand curves with a blend of demand subsidies (tax credits), technological hurdles that act as barriers to entry (protectionism), and producers subsidies for certain types of government preferred technology. Every single one of those governmental activities is known to put upward pressure on prices. I can live with CAFE or individual fuel-efficiency mandates b/c our balance of trade is so bad and foreign oil has become so costly (social cost) that fuel efficiency is basically a matter of national security. But to refer to regulation as a driver of innovation is to deceive people and pervert the meaning of innovation which generally refers to a market-pull phenomenon not government-push (or government nudge if you're Cass Sunstein).

      It doesn't matter what Hwang says. He could force the auto manufacturers to build a car that gets 200mpg, but there is no guarantee that people will buy it. The government gives themselves way too much credit if they think they can squiggle a few words on a page and then expect innovation and cultural revolution. Innovation is not spurred by government regulation.

      BTW, what are the negative externalities associated with threatening death, economic ruination, or life in a cage? What are the negative externalities to individuals when they are no longer in charge of their own lives? What are the negative externalities of social unrest caused by a government who does not attempt to accommodate the lifestyles and philosophies of all people? Apparently these negative externalities do not exist in the minds of bureaucrats.
        • 3 Months Ago
        Yeah, they gave us EVs when oil was $20, and global demand for oil was relatively nil so pollution wasn't growing exponentially. Of course EV's disappeared when regulations disappeared. They weren't necessary or even economically efficient.

        What brought them back? Hwang? Give me a break. People want electrics, hybrids, and fuel-efficient ICE's b/c 1. the price of oil is skyrocketing 2. they understand that global demand for oil is growing as well as pollution 3. they understand that supply is shrinking as the Chinese mercantilists hoard oil and fail to develop it 4. they want the next-gen of automotive consumer products 5. they want to be rid of foreign oil and close our trade deficit 6. Demand subsidies (not regulation, actually returning money to the American people but they drive up prices so I don't approve)

        Did I mention the price of oil is skyrocketing due to the free market principle of scarcity (not government intervention!)? Do you know what made electric cars even remotely possible in the 21st century? Surging battery technology that's driven by consumer electronics like digital cameras, iPods, laptop computers, cell phones, etc. The government doesn't meddle with those products. Shocking?

        Hwang's little, socialist, eco-friendly pen didn't make this happen. You have to be an ideological hack of the highest order to watch legislation fail in the 1990s, ignore everything that has happened since then, and then claim that legislation is miraculously responsible for innovation in the 21st century and that legislation always works. The laws have done very little except interfere. It's the changing energy marketplace and changing consumer sentiments that alter demand and ultimately spur innovation. OMG! Who knew!

        We were always going to have to leave the oil economy behind at some point. What bureaucrat takes credit for it?

        Europe has had super-high gas prices for decades due to onerous excise taxes. Where are their electric vehicles? Oh yeah, they didn't develop them b/c European bureaucrats also wanted "innovation" in the electricity industry so they taxed electricity into oblivion as well (generally 2x-3x of the average US rate). Hmmm..........sounds like cap and tax in the United States. So the SUV lovers who rape the earth (literally) actually did us a favor by shooting down cap and tax which would have stifled EV creation? Weird. I thought Hwang said that cap and tax would have spurred innovation. According to Europe it would have made us poor and it would have mandated big gasoline excise taxes to make EVs a possibility. Memo to American socialists: wake up! If you need rapid change, it's best not to pile legislative deadweight on an economy. Just look at Europe. Stagnant as a cancer-riddle geriatric on life support.

        A vast majority of government intervention will do nothing other than hold us back and increase regulatory burden upon businesses who need to be much leaner to hire domestic workers and compete in the global marketplace. We can take solace that despite the work of our idiotic government, the Chinese are 100% government and the Europeans are 75% government so with a little luck their technocrats will make a few bad decisions and the American marketplace will outmaneuver them. That strategy requires our bureaucrats not to say dumb things like legislation spurs innovation. Those blanket statements make businesses and taxpayers pucker.

        [paraphrase]The more power I have, the better the world gets.[/paraphrase] Grow up, Mao Hwang, and quit acting as an agent of the Chinese government.
        • 3 Months Ago
        Don't forget it was regulation that gave us those first round EVs in the late 90's (like the EV-1, Rav4 EV, and Ranger EV). And as soon as those regulations were removed, the cars were too. It's not that (as the manufacturers insist) the technology wasn't ready, or that there was no market, they just wanted to keep doing things their way.
      • 3 Months Ago
      I like that electric cars are finally being produced & will be sold. Now, when are they going to come up with an efficient battery to store the electricity in? One of the car models that I read about only goes about 40 some miles between charges. Another one makes it up to about 100 miles between 8 hour battery charges. LOL. That is fine for city folks for a car, but what about us that live in the country. We want them too.
      • 3 Months Ago
      I think its a little misguided to attribute the vehicles we see right now to regulation - its much too quick for the regulation to have spurred new vehicles (it takes too long to develop them for it to have happened already).

      The Volt, the Leaf and most other vehicles that are "wowing" us right now with their efficiency were in development when the Bush administration was in office (more than a year for the Volt at least). The Volt was considered a miracle in the time of development which was over 3 years, supposedly most vehicles take longer than that.

      Other than the electric leaps that Nissan and GM made, which were true leadership risk choices - my guess is that most of the automakers (US based ones at least), back in 2006 - 2007, came to the conclusion that more expensive oil / gasoline was in their future and efficient vehicles would become much larger parts of the sales picture and now we have the results. This is probably also why they didn't fight the tighter EPA regs that were implemented in the last 2 years, since they were going this way anyways and it makes sure their competitors have to spend the development money for the efficient technology (nobody gets a free ride if gasoline doesn't go through the roof).

      Just my $0.02.
      • 3 Months Ago
      It amazes me that there are still people pushing this fantasy that somehow centralized planning by bureaucrats can produce better decisions than the companies that actually make the product and the consumers who actually buy them. The whole past experience with CARB, with hydrogen and electric cars (as documented in Who Killed The Electric Car), was a prime example of the folly of the government trying to dictate technological progress.

      And yet now, the very same people who presided over that fiasco have the *gall* to stand up and tout it as a model for the future. Truly they are disconnected from reality.

      I'm particularly gnashing my teeth over this bit: "For the better part of two decades automakers have told us that nobody wants electric vehicles. Now they are tripping over themselves to lead the race to sell electric drive cars."

      The world has changed since then. CARB was demanding EVs at a time when battery technology was under-developed, gasoline was cheap and plentiful, global warming hadn't got much attention yet, and almost nobody wanted electric vehicles. When circumstances changed to favor EVs, then the free market responded. For the authoritarian central-planning wonks to now step in and try to take credit for that is an outrage.
        • 3 Months Ago
        CARB is one of the biggest problems that has plagued the auto industry for decades. State by state regulation has been disasterous because it allows leftist / 'environmentalists' in California to control the entire north american continent's emissions / diagnostics regulation. They do so with no concern for cost or actual enhancements to air quality.

        State by state should have been nipped in the butt 40 years ago. We'd still have clean air but the auto companies wouldn't have to deal with excessive regulation that only serves to make some loser 'activist' (see Roland Hwang) feel warm and fuzzy about themselves.

        Every time Hwang spews his socialist dribble, I get sick to my stomach. All of this needless regulation was a major part of the economic troubles of the domestic auto industry and is the primary reason why we don't get diesel vehicles in USA.

        The air was clean in 2007, but sure enough, the 2010 regulations mandate an unnecessary reduction of NOx (from already miniscule levels) and voila... almost no diesels. And the ones we do have are so loaded with complicated systems who in their right mind would want them unless you're towing heavy loads...

        Not to mention that CARB is POLITICALLY appointed and its studies are highly biased, full of lies and inflated figures. If anyone in Washington DC was smart, they'd cut off all funding to California until state-by-state regs were officially dead.
      • 3 Months Ago
      Auto makers could have made electric cars since the 1990's. They chose not to because of pure arrogance "We big corporation, what we say goes". It doesn't matter if it's good for the economy, the environment or world peace.

      If it weren't for laws requiring pollution controls, improved fuel economy, and advanced safety systems we would be living with yellow fowl smelling air, 5 MPG cars and cars that kill over 100,000 people a year. Auto makers fought tooth and nail against all of these measures.
        • 3 Months Ago
        Randy, we could boycott Ford and the company would probably go down in a ball of flames in 30 days or less as cash flow dried up. Even if they company survived they wouldn't sell cars in the US, and you'd never have to deal with the company again b/c you aren't buying their products.

        Try boycotting Mr. Hwang's legislation or trying boycotting the IRS. The government will run the printing presses and exterminate the dissidents until the sheeple lose their stomach for revolution.

        You are afraid of your own shadow, and you are clearly too young or too stupid to remember the oil crises of the 1970s that nearly put Detroit out of business for the first time. Consumers demanded fuel efficiency b/c of the price of oil and they wanted a lot more than 5mpg. The manufacturers delivered what people demanded. Since then, many consumers have always bought for fuel efficiency, it's just that the other consumers who wanted excess, overshadowed frugal consumers. The SUV boom was a money-printing machine for the manufacturers b/c people were willing to pay enormous profit margins to the auto manufacturers. That kind of idiotic consumption is no more the fault of the auto manufacturers than the government.

        The auto manufacturers don't like auto legislation that screws with the demand curve and price bid for their products. They don't trust the government (who would) to manipulate supply and demand via legislation without disrupting their business operations and their responsibility to shareholders.

        Randy, if I didn't force you to eat your turnips you'd be a 300lb obese diabetic. No actually, you'd probably just enjoy your dinner. Now quit being an idiot.
        • 3 Months Ago
        "The auto manufacturers don't like auto legislation that screws with the demand curve and price bid for their products. They don't trust the government (who would) to manipulate supply and demand via legislation without disrupting their business operations and their responsibility to shareholders."
        ______
        Oh how naive. Firstly, it is the automakers and big oil who manipulate supply and demand by gobbling up patents to electric car batteries and keeping them off the market for 10 years, therefore forcing everyone's continued addiction to oil. This also means that if people want to have a car with decent performance, then they have to have at least a somewhat gas guzzler. By contrast, with an electric car, performance (power) has almost nothing to do with mileage rating. With an electric car, you can have your cake and eat it too -- a very powerful car that is also very energy efficient. This is a result of the very nature of motors versus engines.

        Secondly, the free market is inefficient at allocating resources, because it externalizes its true costs on to other people, things, or places at some other time. This is why government intervention and fossil fuel taxes are needed, and should be way higher than they are now.

        And the American carmakers in the past have shown no responsibility to their shareholders, that is why they went bankrupt and had to be be bailed out by government -- they refused to innovate and make products people actually wanted.
        • 3 Months Ago
        Mark, I'm sure big oil have bought up a lot of alternative energy patents and attempted to stifle development, but clearly they have failed. They have not stopped the Volt or the Prius or the Leaf.

        Know why? B/c everyone in the oil biz from the Mexicans to the Saudis to the Exxon board members have known for quite some time that the only way to avoid alternative energy was to keep oil around $50-$75 per barrel. Oil is over $75 per barrel. In theory, cars should be getting more fuel efficient and they should be getting new fuel efficient technologies b/c buyers are demanding them. Even in a miserable economy with 10% unemployment, consumers are still demanded more efficient cars. Is it not the least bit troubling that your conspiratorial universe you believe in does not jive with the zeitgeist of the auto industry?

        Don't you wonder why we are paying demand subsidies to consumers for buying fuel efficient cars when oil is $100 per barrel? b/c evil auto companies colluding with evil big oil? No, if anything, the auto manufacturers are racketeering off of the green industry and invoking the name of China in order to help themselves to our money. Everyone knows demand subsidies drive up prices. Does Detroit look worried? Hardly.

        The free market has negative externalities. True statement, but your conclusion about government intervention reveals that you've only received half an education. The negative externalities of government are far more damaging to a market economy and to a free populace. The evidence is present in both economic theory and the history of human economic development. Imo, it's such a straight forward idea, it's basically a postulate anyway. The government can kill, cage, and ruin (financially) it's populace in order to enforce the social contract. As the social contract becomes more complicated, there is more killing, caging, and ruining of our citizens. A big part of the complications to the social contract are well-intentioned, but ultimately Draconian business regulations.

        The reason this country was founded was to avoid the negative externalities of intrusive government. We are digressing for two reasons 1) the free market isn't perfect which doesn't sit well with the problem solving side of our nature 2) Laissez-faire, the art of doing nothing, is boring as all hell and economists were naturally going to look for ways to tinker with the free market.

        There are some ways the government can make a positive impact on the private sector, but regulating the pace and heading of technological innovation is not one of them.
        • 3 Months Ago
        How right you are!
        • 3 Months Ago
        Randy, I'm pretty sure they chose not to continue with elec cars in the '90's because there was no profit in it. And they simply didn't have the far-sightedness to keep at it for the long term as Toyota did.

        Anyone that thinks corps are in the business of making anything other than money has a screw loose.

        -----------

        And about gov regs solving the problem - why not just outlaw poverty? $100 minimum wage and everyone's problems just dissappear!!!

        /s for this last, of course.
      • 3 Months Ago
      "Hwang writes that we continue to push for vehicles that keep our air clean and have lower environmental impact than the vehicles that came before."

      Also, consumers push for lower operating costs, or simply want the latest and most high tech gadgetry. Hybrids and EVs aren't just about the environment.
      • 3 Months Ago
      This is one instance where regulation has had a VERY GOOD effect.
      The best example i can think of is how the new Jeep models with the pentastar motor are selling like crazy right now.
      Same with the new Fords; and that Hyundai Sonata. I'm actually seeing a lot of those on the road now.

      I think people wanted these kinds of high mpg cars in the first place. And the technology was there to produce them. So, i wonder exactly why automakers relented for so long.
      • 3 Months Ago
      Why is there so much arrogance and certainty that tt was a evil conspiracy but that practical electric cars could have been built 20 years ago? The technology just wasn't there then. Or somebody would have done so. .

      And even now, technological progress is still only on the verge of being there now.

      • 3 Months Ago
      Basically, if an auto industry executive stands up and says that it can't be done, you know right then and there that it can be done.

      Been there, seen that with seat belts, safety glass, collapsing steering wheels, tire temperature and wear ratings, air bags, 5 mph bumpers, the original CAFE regulations, having any emissions standards at all, side impact protection, stability control, even blinkers.

      Yes, the auto industry opposed blinkers. Blinkers.

      But they aren't opposed to blinders. They want blinders on everyone so that we can't see their history of opposing every single regulation with the same arguments of how it can't be done. Yet here we are today with cars that have all those features. Can't be done? riiiight.... Auto execs may fool blindered folks like mylexicon, but they can't fool anyone who refuses to wear their blinders.

      • 3 Months Ago
      The reason for going with EVs is to get us off foreign oil. The clean air is a great side effect.

      When we can learn to say THAT every day and stress THAT as the headline every time we do something with EVs or other alternatives then we can get somewhere. When we make the issue to stop GW then we lose over half the support we'd get before they even give it a chance.

      People want jobs. $450Billion a year going out of our economy takes jobs away from us here in the US. I'm not even going into the military costs anymore as that leads to a different set of arguments.
        • 3 Months Ago
        Exactly. So many people just don't buy the enviro angle - but that's not the only reason going elec is the right thing to do. The Nat Security and economic rationale is more than reason enough.
      • 3 Months Ago
      It's easy to over-learn this "lesson".

      The laws of physics and economics cannot be repealed by legislative or regulatory decree.
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