American Honda Motor Company is calling on the federal government to create a special credit trading program for automobile emissions, according to comments the company filed with the Senate energy committee in advance of its recent highly publicized hearing on climate change.
The company’s proposal appears at odds with the rest of the auto industry, which has declined to participate in several federal efforts to address climate change. The Alliance of Automobile Manufacturers, a coalition of U.S. and foreign automobile manufacturers, did not testify at the Senate hearing and, at the same time, is working to block consideration of climate change policies by an Environmental Protection Agency advisory committee reviewing overall air quality programs.
An alliance spokesman says the industry has chosen to not participate in the advisory group’s discussion of climate change because automakers are engaged in a pending lawsuit challenging California regulation of greenhouse gases.
Alliance member companies include Ford Motor Co., DaimlerChrysler, BMW Group, General Motors, Toyota, Mitsubishi Motors, Volkswagen, Mazda and Porsche. Honda is not a member of the alliance.
The auto industry has long opposed any efforts to impose greenhouse gas controls on tailpipe emissions. So Honda’s proposal to the Senate energy committee maybe indicate a sea change among some within the industry.
The Senate Energy and Natural Resources Committee on April 4 convened talks to discuss the design of a possible mandatory program to curb greenhouse gas emissions. While Senate energy committee chief Pete Domenici (R-NM) has said legislation is unlikely this year, the talks have encouraged an unusually substantive Capitol Hill discussion of questions facing lawmakers, including whether such a program should be economy wide, how emissions credits would be distributed, and the extent to which the program would link to other state or international regimes for curbing greenhouse gas emissions.
Participants in the dialog encompass a range of players, including the retailer Wal-Mart and participants from the power and energy sector. Electric utility giant Southern Company, which has long opposed mandatory climate change controls, offered suggestions at the hearing on how such a program might be designed, including the suggestion that any program be instituted on an economy-wide basis. Shell’s Garth Edward suggested during his opening statement that “vehicle manufacturers are in the best position” to reduce emissions from mobile sources.
While no auto industry official testified at the hearing, Honda filed comments several days before on a Senate “white paper” released earlier this year. A Senate aide says the comments were received too late to allow the company time to make a presentation, but other congressional sources question that explanation, saying the committee did not try to encourage or discourage participation by specific industry sectors. The committee received hundreds of comments on the white paper from various industry groups, who were asked to submit reactions by a March 13 deadline. Honda was the sole auto industry group to submit suggestions to the committee.
Honda in its comments suggests that there should be a “separate greenhouse gas trading program for cars and light trucks.” The company also says it would oppose any system that allocates total carbon emissions by manufacturer and not per vehicle. “Honda firmly believes that climate change needs to be addressed at the federal level. State-by-state GHG regulations are impractical, expensive and ineffective,” Honda says.
Auto industry and other sources tracking the issue offer a range of explanations for the alliance’s stance, including ongoing auto industry litigation challenging California regulations to curb greenhouse gases, the difficulty of achieving a consensus within the industry, and the fact that the Senate “white paper” that started the energy committee’s dialogue does not propose direct regulation of the auto industry.
The alliance is also adopting a similar reticence on global warming in discussions before EPA’s Clean Air Act Advisory Committee (CAAC) on how to factor climate change into future efforts to manage air pollution. The group is discussing the matter in the wake of a 2004 National Academy of Sciences report recommending a range of strategies to bolster long term air quality planning, including closer attention to the effect of global warming on viable air pollution control strategies. Automakers, with the support of the Bush administration, are currently challenging California regulations that would institute new curbs on greenhouse gas emissions from motor vehicles.
But at CAAC’s April 4 meeting, the alliance’s Greg Dana told participants, “Many in the industry and our lawyers told me they don’t want any discussion of greenhouse gas activities” in the committee.
A source with the alliance downplays the group’s absence from the Senate conference, saying “there are many hearings that take place on the Hill everyday” and that the group does not always comment on those hearings.
The source adds that the industry is focused on recently announced Bush administration fuel economy standards for light trucks, adding that fuel economy is “synonymous” with CO2 emissions. The source also cites a pre-existing position paper from the alliance which references a commitment by alliance members to achieve at least a 10 percent reduction in GHG emissions from their manufacturing facilities by 2012.
Another industry source also downplays the significance of the group’s absence from the Senate talks, saying the sector does not attach the same significance that utilities do to the current debate over multi-pollutant legislation to curb emissions from the power sector.
The source says the white paper that launched the Senate discussions was geared more toward other industry sectors, and “upstream approaches” for regulating emissions close to the fuel source. “Why be a punching bag” by participating in the talks, the source says.
One environmentalist says there is some logic to the industry’s reluctance to participate given the white paper’s focus, but says the dialog also appears to have put the auto industry in a difficult position due to its reluctance to embrace a mandatory climate program and the lack of a clear consensus within the industry on how to proceed.
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