Levin talked about seriously overhauling how the U.S. government promotes cleaner vehicles. He said there are three policy drivers pushing us in this direction today: climate change (which he said "is real, it is urgent and we either deal with it now or our children and grandchildren will have to deal with it later when the remedies will be much more difficult, much more expensive and much less effective."), national security (i.e., oil independence) and the desire for a thriving manufacturing sector (i.e., jobs).
What has held the U.S. back from dealing with these issues in a coordinated way? Levin cited a fear of government support of manufacturing because that was considered industrial policy, what he termed "the kiss of death":
America made progress on fuel efficiency gains in the 1970s, Levin said, but OPEC knew how to set us back:While our government refused to partner actively with American manufacturers, our competitors were establishing partnerships and making investments to position their manufacturers for the future. The second impediment was the ability of oil-exporting nations to play like a yo-yo.
Continue reading...Oil ministers of those nations made it clear they would keep the price of oil at a low enough level so that alternative energy sources would not make economic sense and that distracted us from the fact that ending out dependence on imported oil in our long-term economic interest, beyond the need for environmental and security reasons.
Levin praised the 2009 American Recovery and Reinvestment Act (the "stimulus bill") for the $2 billion (at least) it gave to advanced battery companies in the U.S. and said that the country is ready to focus on the long term:
Up to this point in the speech, Levin hadn't really said anything that would be too controversial in Detroit or other Democratic-leaning areas. Then came this (remember, Levin used to warn against higher CAFE standards):I believe we have begun to clear our eyes. We are no longer shackled by an ideological aversion to industrial policy. The administration understands that our manufacturers are not competing with foreign companies but with foreign countries that support their manufacturers. And our long overdue understanding of what our companies are up against in the global economy is demonstrated in the area of electric vehicles.
Levin proposed getting rid of CAFE, and more:CAFE forces auto manufacturers to focus on incremental improvements rather than dramatic leaps forward. CAFE is a rowboat, when what we need is a high-tech whitewater raft, something to carry us with confidence towards that ultimate goal: affordable alternatives to the internal combustion engine.
Controversial? Most certainly. Effective? Could be, if done right. How would you do it?We need to rethink the whole regulatory approach to achieving advanced technology vehicles. We should explore the possibility of requiring, by a certain time, perhaps 10 or 15 years down the road, that the entirety of certain classes of vehicles be made up of plug-in hybrids, all-electric vehicles, fuel cell vehicles or other alternative to gasoline. We would need to include in any such proposal a strong government partnership, investing in research and development and investing in the infrastructure necessary to support these vehicles. I know that the idea of such a mandate would be controversial. Thinking it through and avoiding unintended consequences would be difficult, but the incremental gains of our current approach are achieved at great cost in terms of resources and policy struggles. We should at least consider removing those high costs – along with the EPA, NHTSA and the California regulatory regimes that have produced those costs – and putting in their place a longer-term approach that gets us to a better result.