Vehicles sold in Arizona in 2011 will have to meet new greenhouse gas standards

PHOENIX - A state panel gave final approval Tuesday to requiring vehicles sold in Arizona beginning in 2011 to meet new standards for greenhouse gas emissions, a move that everyone admits will drive up the cost.
 
The 5-2 vote by the Governor's Regulatory Review Council came despite arguments by a lobbyist for the Alliance of Automobile Manufacturers that the state Department of Environmental Quality lacks the legal authority to do what it is doing. Knox Kimberly said the state laws approved by the Legislature allowing the regulation of air "contaminants'' do not include carbon dioxide. But only council member Stan Barnes, himself a former lawmaker, said he found that argument persuasive.
 
"I do not believe they have the authority to do what they are doing,'' Barnes said of DEQ. And he chided other council members for going along, saying the Legislature set the council up as a check on the power of the governor, who directed DEQ to enact this rule.
 
The other negative vote was cast by Marcus Osborn who had concerns over federal authority.
 
In approving the rule, the majority of council members also rejected contentions by the manufacturers that the standards will add at least $6,000 to the cost of new cars and light trucks. At the same time Wynn Bussman, an economist hired by the manufacturers, pegged the net savings from things like increased fuel efficiency at less than $1,000.
 
"It's flat-out wrong,'' responded Pat Cunningham, DEQ's deputy director. He called the manufacturers' claim little more than "advocacy,'' citing instead figures from the California Air Resources Board which peg the price tag for vehicles at less than $1,100 more with savings from lower gasoline use and maintenance approaching $3,000.
 
Kimberly scoffed at the figures as "intellectually dishonest.'' "There is no free lunch,'' he said.
 
But Sierra Club lobbyist Sandy Bahr scoffed at industry claims of cost. She quoted from a 1973 claim by former Chrysler chairman Lee Iacocca who, in trying to block a federal mandate for catalytic converters on vehicles, claimed it would put 800,000 people out of work and decrease tax revenues by $5 billion.
 
"And the car companies survived, as did our economy,'' she said. Tuesday's action does not make the change official. The U.S. Environmental Protection Agency has so far refused to give California the power to enact its own greenhouse gas emission standards. And Arizona cannot enforce its rule, modeled after those in California, until the federal courts rule on a challenge to that EPA decision.
 
There also is the chance someone will sue over the legality of the rule.
 
That goes to the heart of the debate Tuesday.
 
Arizona lawmakers first approved state regulation of vehicle emission "contaminants'' in 1967. Kimberly said lawmakers at the time never intended to give state agencies the power to limit carbon dioxide emissions.
 
But Cunningham cited a 5-4 U.S. Supreme Court ruling last year which concluded carbon dioxide is, in fact, a contaminant - at least under the federal Clean Air Act. Anyway, he said, if state lawmakers did not want his agency regulating carbon dioxide they had multiple opportunities between then and now to say so.
 
That, in fact, may be occurring: The state Senate voted 20-7 last month specifically to bar DEQ from enforcing regulations dealing with greenhouse gases, not just from vehicles but also from industry. That measure now awaits House action.
 
But Bahr called the legislation irrelevant: She expects Napolitano to veto it.
 
Tuesday's debate was limited solely to the questions of DEQ's legal authority and the cost-benefit analysis, the sole grounds on which the council can consider regulations. But there was some debate about what costs and benefits, beyond the price of the car and the gasoline savings, are relevant, especially when it comes to greenhouse gases and global warming.
 
Cunningham cited an Arizona State University study which concluded that a one degree rise in temperatures in the state will increase daily water usage by 290 gallons for every resident.
 
He conceded, though, even a 30 percent reduction in greenhouse gas emissions from vehicles in Arizona will not make any dent in global climate change, especially with large carbon dioxide emissions in countries like China and India. But he said Arizona joining 13 other states that already have enacted such rules will matter.
 
"It is our share,'' he said. "And soon everyone will be doing their share.''
 
Cunningham said there are other economic benefits from the rule.
 
He said 85 percent money spent on gasoline goes out of state, or to other countries. But if motorists buy electric vehicles that are recharged by Arizona utilities, the money stays in the state.
 
Alan Chan, chairman of the Arizona Automobile Dealers Association, said that presumes people will buy the more expensive vehicles. He said a higher price tag that adds even $20 a month to car payments might actually disqualify some "subprime'' borrowers for a new car loan, meaning they might instead go to a state without the new emission rules.
 
The new rule, if it takes effect, requires each automobile manufacturer to reduce overall greenhouse gas emissions from its total sales in the state by 37 percent by 2016.
 
It does not ban the sale of any particular type of vehicle now sold in Arizona. Instead, it sets standards for how much more each manufacturer's "fleet'' of vehicles sold in the state must reduce carbon dioxide from current levels.
 
It also mandates that 11 percent of each manufacturer's vehicles sold in Arizona beginning in 2011 have no emissions at all, whether electric, hydrogen or some other technology. That increases to 16 percent by 2018 and beyond.