Tuesday, January 27, 2009

More thoughts on individual State's right to set emmissions standards

Well the outlash has been quick and strong.....as expected. Here are the camps:

States want to push this autonomy saying it will bring more choice to consumers.

Big automakers say that this will make cars less appealing and more expensive.

Who is right?

Here is the LM opinion: Government must take a leadership role for the common good when customers alone will not demand the change. If the Fed allowing states to adopt more stringent standards gives such an opportunity for leadership and does so at the more local level then that is a good thing. In a sense, this could even be construed as smaller government. In our auto world today, customers have not demanded the change because the current fuel efficient offerings are not exciting. So what to do? We all have a choice: 1) Keep offerings that customers desire without increased efficiency (current plan), 2) Mandate efficiency and believe that companies will compete to make exciting offerings.

I think that the choice is that stark. I know, personally, how hard it is to make a car, and I do believe that there needs to be more respect and understanding for this complex process. We are trying hard to help in that. I also believe that automotive regulation and crash standards are responsible for making it even more impossible for companies to change products quickly and less expensively. Nonetheless, we must do better, and we cannot expect the Big Companies to do it on their own. If customers will not demand it (meaning they may talk a big game, but they buy with a different message), then the government has an obligation for the good of us all to push the companies and the people to strive for more for all of our sakes.

The devil, of course, is in the details. States and the Federal Government must understand that the real innovation comes from companies and not from the regulation itself, so they must be careful not to write the regulation to be too restrictive such that companies cannot be free to innovate. This can be done. Whether it will or will not be done that way remains to be seen.

My advice to the regulators: Stay out of the technology definition business (hybrid versus diesel, big versus small car, etc), just define air quality, greenhouse gas, and efficiency standards. Let the companies come up with solutions. Then take the regulation to the local level. AND if necessary grant money to all companies who have ideas to make this effort possible.

To see this debate in action and to hear both sides, visit Jim Lehrer's NewsHour report on PBS.org and watch the streaming video, it is only 11minutes, but it provides for a meaningful discussion.


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