[ Issues ]

Energy and Environment

Fuel Economy Standards, Advanced-Technology Vehicles and Other Measures to Reduce Oil Consumption

In 2007 Congress enacted landmark energy legislation designed to reduce our nation's dependence on foreign oil, and thereby enhance our energy security. This legislation included provisions that substantially increased corporate average fuel economy (CAFE) standards, requiring that the fleet of vehicles sold by all manufacturers in the United States would have to achieve at least 35 mpg by 2020. At the same time, this measure reformed the structure of the CAFE program by establishing an attribute-based system that eliminated the discrimination against automakers that produce larger cars and light trucks. It maintained the distinction between cars and light trucks, and provided credit trading between fleets and manufacturers to increase flexibility for producers. And, in a victory for the UAW, the legislation included an anti-backsliding provision to protect small car production in the United States. The UAW supported enactment of this important legislation.

Section 136 of the 2007 energy legislation also established the Advanced Technology Vehicles Manufacturing Incentive Program (ATVMIP), which authorized funds to encourage companies to retool facilities in the United States to produce advanced-technology vehicles (hybrids, diesels, plug-ins) and their key components. The UAW has long called for the enactment of this type of Marshall Plan for the domestic auto industry. We believe this initiative will be good for the environment and good for jobs. It can help accelerate the introduction of advanced, more fuel-efficient vehicles, thereby reducing oil consumption and greenhouse gas emissions. At the same time, it can ensure that these vehicles of the future and their key parts will be built in the United States, creating jobs for American workers.

In the fall of 2008, the UAW and the auto companies waged a major campaign to get Congress to provide $25 billion in appropriations to fully fund the Section 136 ATVMIP. In addition to furthering the important objectives of this program, we saw this as an important mechanism for providing assistance to the struggling domestic auto companies. Thanks to an aggressive grassroots mobilization by the UAW, Congress eventually approved the funding before it adjourned for the elections.

Despite the enactment of the 2007 energy legislation, environmental groups and their allies continued to push for even higher fuel economy standards. They urged the Environmental Protection Agency (EPA) to promulgate standards regulating CO2 emissions from vehicles, which would be a backdoor means of regulating their fuel economy. They also supported the efforts by California and other states to do the same. When the Bush administration denied California’s request for a waiver to implement this auto CO2 tailpipe standard, this provoked a firestorm of criticism in Congress and various states.

The 2008 elections gave a boost to the prospects for increases in fuel-economy standards and the production of advanced- technology vehicles. President Obama supports substantial increases in federal fuel economy standards, and has said he will grant California and other states a waiver to implement their more aggressive state standards. In addition, President Obama is committed to achieving major increases in the production of plug-in hybrids. At the same time, he has repeatedly promised to provide assistance to auto companies to ensure that the more fuel-efficient vehicles of the future and their key components are built in this country. The expanded Democratic majorities in the House and Senate are expected to be sympathetic to all these initiatives.

During the coming year, the UAW will be working make sure that any increases in fuel-economy standards are economically and technologically feasible. To ease the economic and compliance burdens on automakers, we will also be urging the Obama administration and Congress to facilitate an agreement between the various agencies of the federal government (NHTSA and EPA) , as well as California and other states, on implementing a single nationwide fuel-economy standard. Most importantly, the UAW will be calling on the Obama administration and Congress to provide the auto companies with sufficient resources so they are able to make the investments needed to achieve higher fuel-economy standards. This includes making sure that the Section 136 program continues to be fully funded, and also taking other steps to address the severe economic challenges facing domestic automakers.

The UAW will be urging the Obama administration and Congress to take other steps to reduce oil consumption and greenhouse gas emissions by light-duty vehicles. This includes measures to address the fuels that go into vehicles. The UAW supports initiatives to promote the production of vehicles that can run on alternative fuels, including mandates requiring that certain percentages of all vehicles sold in the United States by each automaker must be flex-fuel capable by specified dates. Congress should also fund measures to overcome technical hurdles facing cellulosic ethanol. And it needs to make ethanol more widely available by providing additional incentives or mandates to convert filing stations to handle alternative fuels. Most importantly, the UAW supports the establishment of a cap on the carbon content of fuels to encourage movement toward renewable fuels with lower carbon emissions.

In addition to addressing the fuels that go into light-duty vehicles, the Obama administration and Congress should promote measures that will reduce vehicle miles traveled by consumers. This includes expanding mass transit, and well as better urban planning and other initiatives.

Action:

Global Warming

The UAW shares the growing national concern about climate change. Scientific studies have confirmed that human use of fossil fuels is contributing to global warming. These studies indicate that global warming will pose major environmental challenges, including changes in climate patterns and threats to coastal areas. To avoid these dangers, growth in greenhouse gas emissions must be reduced and ultimately reversed.

To address the problem of global warming, the UAW believes we need a comprehensive policy that will require all sectors of the economy to come to the table to help reduce our nation's greenhouse gas emissions. This includes all mobile sources, not just light-duty vehicles. It also includes stationary sources, such as power plants and factories, as well as producers of coal, oil and natural gas. Each sector should be required to contribute to the reduction of greenhouse gases in a proportionate manner. No sector should enjoy a free ride. No sector should be required to bear a disproportionate burden, or to shoulder costs that would have a devastating impact on its operations or employment.

Specifically, the UAW strongly supports the establishment of an economy-wide mandatory tradable-permits program to slow the growth of and eventually reduce greenhouse gas emissions in the United States. This type of "cap-and-trade" program should be done as much as possible on an "upstream" basis in order to minimize regulation and to ensure that all sectors of the economy participate in a proportionate manner.

During 2008 the Senate took up a climate change bill sponsored by Sens. Barbara Boxer of California, Joe Lieberman of Connecticut and John Warner of Virginia. This legislation established an economy-wide cap-and-trade program, with the transportation sector being regulated on an upstream basis. It had a number of other positive features, including:

• cost containment provisions to guard against price spikes and to ensure that no sector is hit with unacceptable burdens that would negatively impact economic growth and jobs;

• programs to use the revenues generated from the auction of carbon permits to provide incentives for various low-carbon energy initiatives, including resources to fund the UAW's Marshall Plan proposal to encourage auto companies and parts suppliers to retool facilities in this country to accelerate domestic production of advanced- technology vehicles and their key components.

• provisions to assist states whose economies rely heavily on manufacturing.

Unfortunately, this legislation also had various shortcomings. In particular, it:

• preserved residual authority for the EPA to regulate greenhouse gas emissions under the Clean Air Act, thereby allowing this agency to supersede decisions by Congress concerning emissions levels, how emissions should be regulated, and the relative burdens that should be imposed on various sectors and regions of the country;

• trumped pending litigation concerning the scope of state authority to regulate greenhouse gas emissions, and whether state regulation of greenhouse gases from automobiles is pre-empted by federal law;

• failed to deal with the issue of how state climate change measures will interface with the economy-wide cap-and-trade program; as a result, state measures would not result in any additional reduction in greenhouse gas emissions; instead they would just shift the economic burdens imposed by the federal cap-and-trade program.

• did not deal adequately with the problem of international competition by ensuring that imports of finished products, such as automobiles, would be subject to carbon allowance requirements; this could place the U.S. auto industry at a competitive disadvantage, resulting in the loss of jobs for American workers.

Because of opposition from the Bush administration, and concerns expressed by senators from both parties, the Boxer-Lieberman-Warner bill was ultimately withdrawn before there could be any key votes on this measure. A number of major climate change proposals were also introduced in the House during 2008, but there was not sufficient time or support for the House to take them up.

In sharp contrast to the Bush administration, President Obama has made it clear that prompt action on climate change legislation will be a priority for his administration. He has appointed individuals to key Cabinet positions and agencies who are committed to moving ahead with measures to combat global warming. The expanded Democratic majorities in Congress are also expected to give greater support to this effort.

During the coming year, the UAW will be urging the Obama administration and Congress to move forward with proposals to establish a strong economy-wide cap-and-trade program to reduce greenhouse gas emissions in the United States. We will be urging them to retain the positive features in the legislation that was debated by Congress during 2008, while seeking ways to address the shortcomings that we identified in this legislation.

Action: