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Bridging climate science, citizens, and policy


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Obama, Emissions & The Auto Industry

President Barack Obama made his first series of important moves on energy policy yesterday.  He directed regulators to quickly determine whether California and 18 other states can impose stricter car emissions and fuel efficiency than the EPA mandates nationally.  He also ordered the Transportation Department to enact short-term rules on how automakers can improve fuel efficiency of their new models based on a 2007 law. The law requires that by 2020, new cars and trucks meet a standard of 35 miles per gallon, a 40 percent increase over the previous standard.

The auto companies have nashed their teeth very forcefully throughout the 2007 law passage and now its enactment.  They have done so while driving themselves into near-obsoletion.  Their sales have plummeted in the past couple of years, but especially in 2008.  Why?  Because they bet the market would do one thing and it did the other.  What has their main complaint been with these potential regulations?  That they would force the corporations to sell one kind of car in California and another in the rest of the country.  How ridiculous is this claim?  Very, when you realize that these same corporations are already selling vehicles that produce fewer emissions and get much better gas mileage in other countries.

GM, until last month, had been the world’s number one autoseller for decades.  Were all those cars sold exclusively in America?  Of course not.  They sold cars in Europe and Asia; in countries who have mandated much higher fuel efficiency standards than did the U.S.  GM and Ford built plants overseas that manufactured cars that met those standards.  They did so and they remained profitable.  What has destroyed their bottom line was spending millions of dollars to lobby the U.S. government to not impose those same standards here.  So the car corporations forced themselves to make one kind of car to sell in the U.S. and another in the rest of the world.  That led to their current financial struggles.

Cons and pro-corproate Democrats often cite the virtues of the mythological “free-market”.  Here is an opportunity for them to do so again.  If GM, Ford and Chrysler can’t read the market’s signals, don’t they deserve to go under?  Won’t some other entrepreneurial entity come forward to fill the needs of the market?  Darn right, it will.  So what President Obama is doing is allowing our government to help out our mature industries.  GM, Ford and Chrysler are on the brink of collapse.  Obama is extending a helping hand to them, allowing them to continue their existence when they did everything in their power to end it by their own hands.

As usual, corporate media types misread the middle America realities before their eyes.  A “senior editor” (isn’t that impressive?) at CNN writes that

There is an idea afoot in the land that automakers are holding back on small cars because they would rather sell high-margin pickups and SUVs.

It isn’t true. They hold back on small cars because nobody wants to buy them. And since they are hard to sell, automakers can’t make any money on them. If there was steady, predictable demand, you would see waves of good, small cars.

The history of auto sales in 2008 provides a case in point. When gas prices spiked, sales of small and hybrid cars shot through the roof. After prices came back down, dealers couldn’t give them away.

How badly can one person misread the market?  Auto corporations definitely held back on small cars in their pursuit of the more profitable SUBs and pickups.  How many small car advertisements do you see?  Now think of how many truck & SUV ads you see.  Millions of dollars of marketing spent every year by every automaker is the cost of all that advertising.  Small car profits can’t justify themselves in the face of large vehicle profits.  It is a pretty simple business decision.  The problem is not every potential cost is adequately accounted for by the auto corporations.  Well over 1 million Toyota Priuses have been sold in America.  The technology in the Prius?  GM and Ford said Americans wouldn’t want it.  Why then do people remain on waiting lists for the car?  The manufacturing hasn’t caught up to the demand, just the opposite of what the CNN editor wrote.

The last sentence I quoted?  An even worse misread of the economy, if that’s possible.  When did gas prices start coming down in 2008?  In September, when the economy started to collapse.  Dealers can’t give any vehicle away right now.  There are thousands upon thousands of vehicles sitting around in port cities like Los Angeles.  That has never happened until last year.  American’s credit has been cut, and that was the only thing that allowed for our recent economic activity to occur.  Without that credit, people are starting to realize their post-inflation wages haven’t increased in years.  They have no money to buy cars.  Or appliances.  Or houses.  That’s why 500,000 people are losing their jobs every month.  It’s not because gas prices are $1.75 instead of $4.25, despite what the CNN editor wants you to believe.

I haven’t even touched on the environmental benefit of regulating emissions standards.  That has to be done, and done today.  Our climate forcing is making itself felt in an increasing number of ways.  We have the opportunity to try to alleviate the worst of climate change.  The American people spoke in November: they want to make the best of that opportunity.  Dinosaurs like the CNN editor just haven’t caught up to that reality yet.


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News Links & Discussion 9/2/08

Personal incomes fell in July by 0.7%.  Remember, inflation in June was over 9%.  Americans had 10% less buying power than they did before.  Republican economics at work!

FAA computer practices leave quite a bit to be desired.  Two computer centers are supposed to operate for the entire country?!  Similar systems in different industries require multiple redundancies.  The FAA has also had many problems with adequately staffing properly trained air traffic controllers.  That’s a trend that started under St. Ronnie Reagan’s union busting days.  Republicans argue that investing in new technologies would require (gasp!) raising taxes.  Because crashing planes and a crippled air system are so much more desirable.

Union members make more and have better health insurance.  Their wages and benefits are part of the reason why corporations and their Republican lackeys have always attacked unions so viciously.

The Arctic becomes an island.  For the first time in recorded history, the Arctic ice sheet can be circumnavigated.  This year’s 2nd lowest ice extent (so far) on record means it will take quite different conditions to build the pack back up to the 1979-2000 average.  What’s left is thinner and weaker than before.

EPA emission limits are rejected by a federal appeals court.  It is absurd to think that the EPA should be able to limit what emission targets states can set for themselves, as long as they aren’t higher than the federal standard.  This decision is yet another slap in the face to the Bush-friendly EPA managerial appointments.  Not that that will stop them from continuing to act like a-holes for the next 120 days.

Marilyn Musgrave wants more debate time with challenger Betsy Markey, who has led in polls since May for the CO-04 seat.  This is a direct reversal of the 2006 race when Musgrave refused to debate challenger Angie Paccione as she led in polls all the way to election day.  Don’t give her any chance, Betsy!

The Space Shuttle program could be extended past the currently planned retirement date of 2010.  NASA is rightfully concerned that the U.S. would then have no platform to get astronauts to the ISS and Low Earth Orbit until the Orion capsule’s planned 2015 service entry.  One of the things Iraq has shown us is that projects and policies aren’t about available money, they’re about political will.  There is no reason for NASA to be beholden to an increasingly contentious Russia for passage to a space station that American taxpayers mostly paid for.

Oil prices down and this is the money quote:

Stocks slumped more than $7 a barrel Tuesday morning as investors bet that the damage from Gustav was not as bad as had been feared. Prices also dropped due to the stronger dollar, which makes dollar-traded commodities cheaper for overseas investors. Additionally, investors continued to bet that global demand for oil is waning.

Isn’t it nice to know that we’re getting gouged at the pump while Wall Streeters bet on this and that and the other thing?  Also note that oil prices have fallen 25% off their high of $147.20 on July 11.  Has American demand fallen by 25% this year?  Has American supply risen by 25% this year?  Nope.  More importantly, global demand has in no way fallen this year. Neither has global supply.  Republicans keep talking about the “free market” and how it will lower oil prices.  Those prices weren’t supported by market fundamentals.  They were propped up by speculators that have been scared off by the threat of regulation introduction by the Democratic Congress.  The lesson: Republicans cause oil and gas prices to rise; Democrats cause oil and gas prices to fall.

Will future Gulf landfalling hurricanes weaken like Katrina & Gustav?  Joe Romm argues that with much warmer future oceans (based on a business as usual approach), hurricanes moving across the Gulf may not have to contend with cooler sea surface temperatures closer to land.  That would mean more devastating storm damage as storms would maintain some or much of their open-water potency.  Also of concern: warmer Mississippi waters and warmer delta waters that would allow stronger hurricanes to affect more areas inland from the Gulf.


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Linkies 1/30/08

James Hansen tells it like it is; Climate Progress has a quote.

A Clean Air Group is suing Xcel over alleged pollution standards. Total estimated cost if guilty? $400 million. Even if Xcel is guilty, there’s no way they’ll end up paying that much money. A settlement is much likelier.

Climate Progress’ take on Bush’s ‘discussion’ of energy during the SOTU.

“The Earth’s climate is now clearly out of balance and is warming.” So says the American Geophysical Union. Any solution? “Mitigation strategies and adaptation responses will call for collaborations across science, technology, industry, and government.” Not going to happen with the Neandertals currently pulling the levers. 2009 and 2010 will be too late. Get ready for a vastly different planet.

More good ideas from Trapper John.

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