Get Energy Smart! NOW!

The strong success of the CARS Program (WIN on economic stimulus, with wins environmentally, energy security, and highway safety) have led to consideration of what to do next. Last week, Senators Senator Bingaman, Snowe, Kerry, and Lugar introduced S. 1620, Efficient Vehicle Leadership Act of 2009. This act would set up a feebate program, much like that proposed by Energize America back in 2006.

A “FeeBate” system seeks to have, roughly, a balanced financing by providing rebates for desired behavior and charging fees for undesired behavior. When it comes to automobiles, this would mean a fee for low mileage vehicles and rebates for high mileage vehicles.

S 1620 sets a three-tiered system, so that fees would mount with lower fuel efficiency and rebates mount with increased efficiency. As drafted, S. 1620 would apply to the CAFE standard, which means it would be a moving (strengthening) target as the CAFE standards tighten in years to come. (I am told that this actually works based on the more meaningful gallons per mile rather than the misleading “mpg” even though I don’t see this laid out in the introduction or legislation.) The Senators have a feel for the politics. ‘Let’s seize on CARS Program’s success and build on it.’ And, the “rebate” would be in place for two years (starting in 2010, with 2011 model year) before “fee” sets in (2013 model year).

As Senator Bingaman said in introducing this bill,

“Detroit automakers have made a historic promise to the President to advance fuel efficiency technologies, from clean diesels to hybrids to electric vehicles. This bill will help stimulate demand in the showroom for these advanced American vehicles when they arrive at auto dealerships across the country.”

Note that this is one of those missing rarities in the DC scene, a bi-partisan solution that makes some real sense (see here for a Merkley-Lugar one last week). From Senator Snowe’s comments,

“With the United States consuming 9 million barrels of gasoline per day, we must develop bold policies that dramatically reduce our demand for foreign oil. As leading sponsor of the Ten-in-Ten Fuel Economy Act with Senator Feinstein, I have long called for increasing vehicle efficiency and this bill will complement the CAFE program and the aggressive fuel economy standards established by the Administration. As we have witnessed from the Cash-for-Clunkers program, households respond to incentives to purchase advanced vehicles and the Efficient Vehicle Leadership Act will build a long-term policy to assist families to purchase fuel efficient vehicles that strengthen our energy security, reduce greenhouse gas emissions, and save money at the pump.”

Rational, thoughtful, bipartisan solutions that seek win-win-win-win across economic, energy, environmental, and security spaces? This is the sort of real bipartisanship that the nation requires as opposed to seeking to appease anti-science syndrome sufferers and those willing to lie directly to scare the American public on issue after issue.

Let’s be clear. This legislation isn’t perfect (as per mpg vs gpm). For example, as David Roberts of Grist highlights,

Purely as policy, it has some shortcomings. It doesn’t penalize driving—we’d prefer someone buy an SUV and park it most of the time than buy a hatchback and drive it every day. But that shortcoming can easily be remedied by pairing feebates with higher gas taxes. As a political matter, though, lead with the policy that’s easier to understand and offers tangible benefits!

David’s is a good post about the power of FeeBate and why this is should lead moving toward any sort of gasoline tax.

If Energize America’s Act 1 was a FeeBate, Act 20 was a 1 cent per gallon per month addition to the gasoline tax for no less than a decade. Combine direct purchase incentives for greater fuel efficiency with a quite certain increase in the gasoline tax for years to come, and purchasers will flock to go high mileage, helping drive Detroit toward an ever more fuel efficient set of options (that will be increasingly competitive on world markets). What is amazing to consider is the quite real potential that combine a FeeBate with a steadily increasing gasoline tax would lead to the same (or even lower) absolute gas prices at the pump due to the reduced oil demand lowering the price of gasoline by the same or even more than the $1.20 gallon gasoline tax. And, due to the fuel efficiency improvements, it is certain that the average drivers’ annual gasoline bill will be lower since they will be using so many fewer gallons of gasoline.

The Senators have introduced good legislation. With a few tweaks and improvements, it can move from ‘good’ to truly Energy Smart.

NOTE: FeeBates work. For several years now, the French have had a FeeBate system based on carbon emissions (which relates closely to fuel efficiency, but this captures the differences between diesel’s higher mpg and higher emissions by focusing on the emissions) which range from a 7500 Euro rebate for very low polluters to 2500 Euro fee for high polluters. The French government credits this with helping push the market toward greater efficiency and lower pollution.