California Regulations to Control Greenhouse Gas Emissions

from Motor Vehicles

Charles M. ShulockCalifornia Air Resources Board

April 28, 2005

Rhode Island Greenhouse Gas Stakeholder Meeting

2

Clear Public Supportfor Action

“What about the state law that requires all automakers to further reduce the emissions of greenhouse gases from new cars in California by 2009? Do you support or oppose this law?”

2004: 81% support2003: 80% support2002: 81% support

3

AB 1493 Requirements

• Adopt regulations by January 1, 2005– Maximum feasible and cost-effective

reduction in greenhouse gas emissions

• Regulations may not take effect prior to January 1, 2006 (legislative review)

• Regulations apply to 2009 and later model years

4

Strong Technical Basis for Regulation

• International Vehicle Technology Symposium

• Comprehensive technical and economic studies – Technology evaluation by auto industry

consultants– Economic modeling by UC professors

• Independent academic peer review

5

Extensive Public Process

• September 26, 2002 Board Meeting

• December 3, 2002 Workshop (Emission Inventory)

• March 11-13, 2003 Vehicle Technology Symposium

• September 18, 2003 Workshop (Standards, Economics)

• October 14, 2003 Workshop (Alternative Compliance)

• November 20, 2003 Board Meeting

• February 18, 2004 Workshop (Environmental Justice)

• April 20, 2004 Workshop (Technology Assessment)

• July 6, 2004 Workshop (Environmental Justice)

• July 7, 2004 Workshop (Draft Staff Report)

• July 8, 2004 Workshop (Environmental Justice)

• July 13, 2004 Workshop (Environmental Justice)

• September 23-24, 2004 Board Meeting

6

Vehicle GHG Sources

A/C compressorEngine Transmission

Methane

Nitrous Oxide

CO2

CO

2

HFCs

7

Available Technologies (Near-Term)

• Variable valve timing and lift• Turbocharging• Cylinder deactivation• Improved multi-speed transmissions• Electric power steering• Improved alternator• Gasoline direct injection• More efficient, low-leak air conditioning

8

Available Technologies

Cylinder Deactivation

Automated Manual Transmission

2005 Chrysler 300C Hemi

Audi TT 3.2 V6

6%*

7%

* % CO2 reduction, large car

9

Available Technologies

Acura RSX Variable valve timing and lift Honda Accord

Toyota Matrix

4%

10

Available Technologies

Gasoline Direct Injectionw/dual cam phasers

Turbocharger

BMW Valvetronic(continuously variable valve timing and lift)

BMW 5 Series

2005 Audi A4

Volvo S60

5%

8%

6%

11

Emerging Technologies (Mid-Term)

• Integrated starter/generator

• Camless valve actuation

• Gasoline homogeneous charge compression ignition

• More efficient, low-leak R-152a air conditioning system

12

Emerging Technologies

2005 Chevrolet Silverado

Camless Valve Actuation

Homogeneous Combustion Compression Ignition

4%

6% 16%

Integrated Starter/Generator

13

Fleet Average Emission Standards

CO2-equivalent emissionstandards (g/mi)Tier Year

PC/LDT1 LDT2

2009 323 4392010 301 4202011 267 390

Near-term

2012 233 3612013 227 3552014 222 3502015 213 341

Mid-term

2016 205 332

~22% reductionin 2012

~30% reductionin 2016

14

Standards Designed So All Models Can Comply

• Standards set to be feasible for manufacturer with heaviest fleet– Ensures all manufacturers can comply

without altering their fleet mix

• Even the largest SUVs able to comply

• Consumer choice maintained– All models remain available to consumers

15

Regulation ReducesClimate Change Emissions

0

100000

200000

300000

400000

500000

600000

700000

2000 2005 2010 2015 2020 2025 2030 2035

Calendar Year

Lig

ht

Du

ty V

eh

icle

CO 2

Eq

uiv

ale

nt

To

ns

Pe

r D

ay

Without Regulation

With Regulation

Linear (WithoutRegulation)

-18% -27%

16

Average Price Increase of New Low GHG Vehicles

Retail Vehicle Price Increase

Passenger CarsLight Trucks/SUVs

Large Trucks/SUVs

Near Term2012

$367 $277

Mid Term2016

$1064 $1029

17

Net Savings for Consumer (Passenger Cars and Small Trucks)

Near Term(2012)

Mid Term(2016)

Monthly PaymentIncrease

$7 $20

Monthly OperatingCost Savings

$18 $23

Monthly Net Savings $11 $3

18

Economic Impacts

• More jobs (+53,000 in 2020)

• Higher personal income (+$4.8 billion)

• Increase in number of businesses

• Positive effect on minority and low income communities

19

Supplemental Analysis (Other Possible Impacts)

• Potential effects– Fleet turnover (impact on sales)

– Rebound (impact on miles driven)

• Not part of traditional analysis

• Developed California-specific tools

• Bottom line--effects are small

20

Issue--Estimated Costs and Benefits

• Industry typically overstates cost

• Industry estimates rely on weight reduction (expensive)– Lower cost technologies not used

• ARB benefits assume gasoline @ $1.74

21

Automaker’s 1994 Analysis of CA LEV I Standards$

46

3

$1

,01

9

$1

,47

5

$1

46

$1

99 $3

12

$1

20

$1

68 $

33

6$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

California TLEVStandard

California LEV IStandard

California ULEV IStandard (midsize)

Sierra Research

CARB

Actual

Automaker’s estimates were 4-6x too high

Source: NRDC

22

Consistent Pattern of Overestimation

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

1975Federal

Standard($2004)

CaliforniaLEV I

Standard($1994)

CaliforniaULEV I

Standard,midsize($1994)

1996FederalTier1 +OBD

($2001)

CaliforniaULEV II,

Heavy LightTruck

($1998)

CaliforniaCO2-eqStandard($2004)

Industry & Allies Low

Industry & Allies High

Regulators

Actual

Source: NRDC

23

Issue--GHG Impact of Regulation

• California regulation alone will not solve problem, but…

• Proposal provides net benefit

• California not acting in isolation

• Other jurisdictions follow California lead

• California doing its fair share

24

Issue--Model Availability

• Standard can be met by all manufacturers while maintaining today’s fleet

• Speed, power, towing capacity--same as 2009 baseline

• Requires improved technology, not different vehicles

25

Current Status

• Rulemaking– Responding to comments– Staff document (Final Statement of Reasons)

to be submitted to Office of Administrative Law

• Litigation– Federal court– State court