Monday, July 27, 2009

Cooler Cars in California

I was just perusing the month-old press release for the new regulation from California's Air Resources Board requiring car makers and auto repair shops to reduce the amount of infrared light that windshields and other car glazing allow into a car's interior, beginning in 2012. On the surface this seems like an eminently sensible idea and one sure to appeal to drivers in a warm, sunny state who are tired of climbing into hot cars in the summer and waiting for the A/C to catch up. Living in another warm state, I'd be tempted to order this as an option on my next car, too. The problem is that CARB isn't requiring carmakers to offer low-transmittance glass as an option; they're mandating its use, in two successively stricter stages, and consumers must absorb the higher cost, whether they want to or not. Moreover, when the touted emissions reductions are compared to those costs this looks like a very pricey means of achieving them, compared to many other alternatives. Regulating car-window glazing as a way to reduce emissions epitomizes the pitfalls of applying the command-and-control approach from the regulation of local pollution to climate change.

When I couldn't quickly find enough information to unpack the assumptions behind the emissions numbers in the press release, I reverted to examining its implied cost/benefit by applying some very simple assumptions to the figures in the release itself. At a conservative average fuel price of $3 per gallon, CARB's estimate of annual fuel savings of $16 per car from reduced air-conditioner use implies a fuel saving of 5 1/3 gallons per year, resulting in cumulative avoided greenhouse gas emissions of under 0.6 tons of CO2 over 10 years. Applying the $70 per car estimated cost of the 2012 standard, it appears the cost of achieving these reductions comes in at around $120 per ton. That's more than double the expected cost of directly capturing and sequestering CO2 from power plants and ten times the federal government's expected price of emissions allowances under the Waxman-Markey climate bill in its early years--coincidentally beginning in 2012. Using the same logic, the equivalent emissions reduction cost of the tighter 2016 standard exceeds $300/ton of CO2.

I'm also skeptical about the need to apply such a standard to the entire state, ignoring the enormous geographic diversity it encompasses, unless that was simply intended to increase CARB's leverage with carmakers. I grew up on the Central California coast and didn't feel the need to purchase the A/C option until I moved to L.A. While I doubt many cars are sold in my native state without A/C today, the coastal concentration of California's population, particularly north of the Tehachapis, suggests much lower fuel savings and emissions benefits in important portions of the state. If anything, many car owners in cooler regions of the state will need to use their heaters more to compensate for less natural warming of the vehicle interior. That's not a big drain on conventional cars, but it represents a direct energy cost for EVs and plug-in hybrids.

Now, it seems clear that the new regulation would benefit some consumers directly through reduced fuel costs, though I wonder how many of them would find the agency's expected payout of five to twelve years on the required investment especially compelling, if they weren't already sold on the comfort aspects of this feature. Since CARB isn't constrained by cost/benefit analysis of its rules, car window glazing represents just another piece of the puzzle to an agency that is already under the gun to implement the state's AB32 emissions law--even if the contribution of the new regulation toward cutting the state's 480 million tons per year of net emissions looks relatively trivial. There is no disincentive to pursuing such prescriptive solutions, however incremental or inefficient they might be. As a result, CARB doesn't need to ask the more important question of how that $250 per car (after 2015) might better be spent to reduce more emissions. Anyone preferring national regulation of emissions by the EPA to cap and trade--assuming the excesses and distortions of Waxman-Markey can be reined in by the Senate--should consider this a cautionary tale.

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