[R-G] [BillTottenWeblog] The Other Bail-Out

[Bill Totten]

Another set of corporations is pressing for public money. Governments
should let them die.

by George Monbiot

The Guardian (October 07 2008)


While all eyes were fixed on the banking bail-out, a bucketload of
public money was quietly sloshed into the pockets of another undeserving
cause. Last week, George Bush agreed to lend $25 billion to US car
manufacturers. It's a soft loan, which will cost the government $7.5
billion {1}. Few people noticed; fewer fought it. The House of
Representatives approved the measure by 370 votes to 58. The great
corporate bail-out is spreading like the plague.

It has already crossed the Atlantic. Yesterday European car makers
demanded that the EU hand them forty billion Euros ($54bn) in cheap
loans to match the US subsidy {2}. Where will the public spending spree
end?

The motor companies in both Europe and the US claim they need these
loans to help them go green. They will invest the money in a new
generation of environmental technologies, which will allow them to meet
the efficiency standards their governments are setting. There is more
joy in heaven over one sinner who repents ... but how strange this green
enthusiasm seems, now that there's the smell of public money in the air.
For the past ten years the car manufacturers have driven every useful
green initiative into the wall.

In 1998 European car makers promised to show that they could cut their
greenhouse gases voluntarily. By the end of 2008, they pledged, they
would reduce the average emissions produced by their cars from 190 grams
of carbon dioxide per kilometre to 140. How well have they done? By the
end of last year they had cut average pollution to 158g/km across Europe
{3} and 165g/km in the UK {4}: they will miss their target by some forty
per cent.

Discerning, only ten years too late, that lobby groups' promises are
worth as much as a share in Lehman Brothers, in 2006 the European
Commission announced that it would set compulsory standards: by 2012 all
manufacturers would have to reduce their average carbon dioxide
emissions to 120g/km. It looked like progress, until you remembered that
120g was the target proposed by the EU in 1994, to be met by 2005 {5}.
It was repeatedly delayed by industry lobbying.

Last year the 2012 target fell to the same forces. Angela Merkel,
lobbying on behalf of companies like DaimlerChrysler and BMW, demanded
that the European Commission put the brakes on {6,7}. (Ironically it was
Merkel, as the idealistic young German environment minister, who first
proposed the target of 120g by 2005 {8}.) The commission agreed to
revise the figure to 130g, and to cover the gap by raising the
contribution from biofuels. Since then we've seen hard evidence that
most biofuels, as well as spreading starvation, produce more greenhouse
gases than petrol {9, 10, 11}, but the policy remains unchanged.

Now the pollutocrats are whinging that they can't meet the 130g target
either. A month ago they persuaded the European Parliament's industry
committee to take up their case: it proposed postponing the target until
2015, reducing the fines if they don't comply and allowing manufacturers
to offset eco-innovations against the target even if these don't
actually reduce emissions {12}. These invertebrates, in other words,
proposed to grant official approval to industry greenwash. Fortunately
this scam was rejected two weeks ago by the parliament's environment
committee {13}.

In the US, manufacturers have still not reached the standard (an average
of 27.5 miles per gallon) that they were supposed to have met, under the
Energy Policy Conservation Act, by 1985 {14}. The average car sold in
the States today is less efficient than the 1908 Model T Ford {15, 16}.

What makes this dithering so frustrating is that to be talking, in 2008,
about targets of 130 or 120 grams per kilometre is a bit like discussing
whether modern computers should have ten rows of sliding beads or 100.
In 1974 a stripped-down 1959 Opel T-1 managed 377 miles to the US gallon
(160 kilometres per liter) {17}, which equates to fifteen grams of
carbon dioxide per kilometre {18}. There is no technical reason why the
maximum limit for mass-produced cars shouldn't be 50g/km.

Nor is there a good commercial reason. A poll by the Newspaper Marketing
Agency shows that eighty per cent of car buyers say economy is now more
important to them than performance {19}. The car industry's
technological failure results entirely from lobbying by the companies
now demanding public money to go green. They want to squeeze every last
drop from existing technologies before switching to better models.

Their sabotage of green technology has been both subtle and
comprehensive. The film Who Killed The Electric Car? shows how the
manufacturers, working with oil companies and corrupt officials, sank
California's attempt to change vehicle technologies {20}. Having bumped
off battery power, they persuaded the federal government to pour money
instead into hydrogen vehicles, aware that the technological hurdles are
so high that a cheap, mass-produced model might never be possible.
Electric cars, by contrast, have been ready for the mass market for
almost a century. The $1.2 billion that the US government is spending on
research and development for hydrogen cars {21} - like the two billion
Euros pledged to the same quest by the European Union {22, 23} - is a
subsidy for avoiding technological change.

Now, after so much procrastination, the car makers have the flaming
cheek to demand public money to pursue the policies they have spent
fifty years and millions of dollars crushing. Of course, the "green
loans" they are soliciting are nothing of the kind. Funding better
environmental performance is simply an excuse for bailing out another
failing industry. As a result of the credit crunch and high oil prices,
new car registrations in the UK fell by 21% last month {24}. In the US,
sales by the major manufacturers have declined this year by between
twenty 20 and 35 per cent {25}.

There is no need to spend a penny of public money on greening the motor
industry. As a recent report by the House of Commons environmental audit
committee shows, you could achieve the same outcome by creating a bigger
differential between vehicle tax bands: it proposes that people buying
the least efficient cars should pay around GBP 2000 more per year than
those buying the most efficient {26}. This would kill the market for gas
guzzlers and force the industry to make the changes it has long resisted.

But the government has taken all the flak a good tax policy would have
generated for very little gain. Its controversial new vehicle tax
banding will save a mere 0.16 million tonnes of carbon dioxide per year
{27}: a drop in the acidifying ocean. At scarcely greater political cost
it could have hammered emissions and generated much of the money it
needs to revolutionise public transport. Again there has been a
historical slide: between 1920 and 1948 cars were taxed at one GBP per
horsepower {28}: in real terms (and in some cases in nominal terms {29})
a far higher rate for gas guzzlers than today's.

But subsidies are what governments pay when regulation doesn't happen.
If you don't have the guts to force companies to do something, you must
bribe them instead. It's a fair guess that European car makers will
still fail to meet their environmental targets, even if they get the
money they're demanding. The greenest thing governments could do is to
allow these foot-dragging, planet-eating spongers to go under.

www.monbiot.com

References:

{1} Bernard Simon, 25th September 2008. House clears $25bn for
carmakers. Financial Times.

{2} ACEA (the European Automobile Manufacturers Association), 6th
October 2008. European auto industry calls on EU to help sustain
changeover to low-emission car fleet.
http://www.acea.be/index.php/news/news_detail/european_auto_industry_calls_on_eu_to_help_sustain_changeover_to_low_emissi

{3} European Federation for Transport and Environment, August 2008.
Reducing CO2 Emissions from New Cars: A Study of Major Car
Manufacturers' Progress in 2007.

{4} Low Carbon Vehicle Partnership, 18th March 2008. Average UK new car
CO2 emissions fell 1.4% in 2007. http://www.lowcvp.org.uk/news/866/bulletin/

{5} European Federation for Transport and Environment, 26th August 2008.
BMW leaps ahead on new car CO2 emissions, others still stalling.
http://www.transportenvironment.org/News/2008/8/BMW-leaps-ahead-on-new-car-CO2-emissions-others-still-stalling/

{6} George Parker and Andrew Bounds, 31st January 2007. Brussels
climbdown on car emissions. Financial Times.

{7} European Commission, 7th February 2007. Commission plans legislative
framework to ensure the EU meets its target for cutting CO2 emissions
from cars. Press release.
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/155&format=HTML&aged=0&language=EN&guiLanguage=en

{8} European Federation for Transport and Environment, 26th August 2008,
ibid.

{9} Joseph Fargione, Jason Hill, David Tilman, Stephen Polasky, Peter
Hawthorne, 7th February 2008. Land Clearing and the Biofuel Carbon Debt.
Science. Doi 10.1126/science.1152747.

{10} Timothy Searchinger, Ralph Heimlich, R. A. Houghton, Fengxia Dong,
Amani Elobeid, Jacinto Fabiosa, Simla Tokgoz, Dermot Hayes, Tun-Hsiang
Yu, 7th February 2008. Use of U.S. Croplands for Biofuels Increases
Greenhouse Gases Through Emissions from Land Use Change . Science. Doi
10.1126/science.1151861.

{11} PJ Crutzen, AR Mosier, KA Smith and W Winiwarter, 1 August 2007.
N2O release from agro-biofuel production negates global warming
reduction by replacing fossil fuels. Atmospheric Chemistry and Physics
Discussions 7, pp11191?11205.
http://www.atmos-chem-phys-discuss.net/7/11191/2007/acpd-7-11191-2007.pdf

{12} European Federation for Transport and Environment, 16th September
2008. MEPs' call for ‘phased' CO2 limits amounts to a postponement, IEEP
study shows.
http://www.transportenvironment.org/News/2008/9/MEPs-call-for-phased-CO2-limits-amounts-to-a-postponement-IEEP-study-shows/

{13} European Federation for Transport and Environment, 25th September
2008. MEPs stand up for fuel-efficient cars.
http://www.transportenvironment.org/News/2008/9/MEPs-stand-up-for-fuel-efficient-cars/

{14} Kathy Gill, 28th April 2006. CAFE (Fuel Efficiency) Standards for
Passenger Cars and Light Trucks.
http://uspolitics.about.com/od/energy/i/cafe_standards.htm

{15} The estimated average fuel efficiency for cars, including SUVs and
pickups, in the US in 2008 is 20.8 mpg.
http://epa.gov/otaq/cert/mpg/fetrends/420s08003.pdf

{16} In 1908 the Ford Model T ran at 25mpg. Detroit News, 4th June 2003,
cited by Want to Know, 11th July 2005.
http://www.wanttoknow.info/050711carmileageaveragempg

{17} See http://www.treehugger.com/files/2008/02/souped_down_old.php

{18} According to Audi, 100km/l equates to 23.8gCO2/km.
http://www.audi.com/etc/medialib/cms4imp/audi2/company/financial_information/pdf_0803.Par.0103.File.pdf

{19} Low Carbon Vehicle Partnership, 27th September 2008. Survey shows
more buyers want low emission cars.
http://www.lowcvp.org.uk/news/1013/survey-shows-more-buyers-want-low-emission-cars/

{20} http://www.whokilledtheelectriccar.com/

{21} Office of Science and Technology Policy, Executive Office of the
President, no date given.
Hydrogen Fuel Initiative. Research and Development Funding in the
President's 2007 Budget.
http://www.ostp.gov/pdf/1pger_hydrogenfueliniative.pdf

{22} No author, 16th August 2003. The clean green energy dream. New
Scientist: Energy Special ? Hydrogen.

{23} The allocation for the current Framework Programme is E470m.
European Union, 10th October 2007. The Fuel Cells and Hydrogen Joint
Technology
Initiative. Press release.
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/07/404&format=HTML&aged=0&language=EN&guiLanguage=en

{24} BBC Online, 6th October 2008. New car registrations fall by 21%.
http://news.bbc.co.uk/1/hi/business/7654648.stm

{25} Suzy Jagger, 2nd October 2008. US carmakers forced to wait for
$25bn ‘green' loan. The Times.

{26} House of Commons Environmental Audit Committee, 4th August 2008.
Vehicle Excise Duty as an environmental tax.
http://www.publications.parliament.uk/pa/cm200708/cmselect/cmenvaud/907/907.pdf

{27} ibid.

{28} ibid.

{29} The top standard rate of vehicle excise duty from 2010 will be GBP
455. The Mercedes-Benz SL is 604hp; the Lamborghini Murcielago is 640.
http://www.autobytel.com/content/research/top10/index.cfm/action/highhorsepower/vehicleclass/sprt/listtype/9

http://www.monbiot.com/archives/2008/10/07/the-other-bail-out/


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