Sizing Up the The Direct Approach
May 19th, 2009Posted by: Roger Pielke, Jr.
[UPDATE: DH writes in to note that there are only 19.6 gallons of gasoline per barrel of oil, which contains 42 gallons. Numbers corrected below. Thanks!]
The Obama Administration’s announcement this afternoon of tightened fuel efficiency standards provides an excellent example of what the Congressional debate over cap and trade does not — a direct and obvious connection between the policy and the outcome, in this case reduced use of gasoline and by extension greenhouse gas emissions. If emissions are to be reduced then efficiency gains will necessarily have to be a big part of the equation. Speaking on a morning news program White House official Carol Bowner had this to say:
The new limits will save 1.8 billion barrels of oil over the program’s seven-year life, President Obama’s climate czar said Tuesday. Well the price of a car will increase, the Obama adviser also said consumers would save money in long run on lower fuel costs.
“[T]he American public — when they go to the pump, will actually save money. Their cars will drive further on a gallon of gas, and ultimately we’ll reduce our oil use by 1.8 billion barrels over the life of the program. Now, that’s good news,” White House energy and climate change advisor Carol Browner said on MSNBC Tuesday morning.
What are the carbon dioxide emissions consequences of 1.8 billion barrels of gasoline?
At 20 pounds of carbon dioxide per gallon and 19.6 gallons of gasoline per barrel the answer is 706 billion pounds of carbon dioxide or 0.32 gigatonnes of carbon dioxide (a gigatonne is a billion metric tons, and a metric ton is about 2,200 pounds, so 0.32 Gt = 706 billion pounds = 706/2,200). Over the life of the fuel economy program (7 years) this equates to a reduction of about 0.046 gigatonnes per year (i.e., = 0.32/7). In 2007 the US had about 7.28 Gt of greenhouse gas emissions, so the effect of the new emissions regulation on greenhouse gas emissions from a 2007 baseline are a reduction of about 0.6%. If this seems like a small number consider that the U.S. consumes 390 million gallons of gasoline per day (!), meaning that 1.8 billion barrels represents about 90 days worth of gasoline usage, or 13 days per year for the 7 years of the program.
So if the program actually saves 1.8 billion barrels of gasoline then the new standards over 7 years will free up 90 days of gasoline and reduce greenhouse gas emissions (from a 2007 baseline) by 0.6%. These numbers may seem small, but they are actually quite significant. Piece by piece, step by step are how efficiency gains are achieved in practice, and perhaps more importantly, when established as performance standards can be made permanent so the benefits continue (and indeed increase) indefinitely.
May 19th, 2009 at 9:14 am
“So if the program actually saves 1.8 billion barrels of gasoline then the new standards over 7 years will free up 90 days of gasoline and reduce greenhouse gas emissions (from a 2007 baseline) by 0.6%.”
Except if people drive their cars more, because their fuel costs are lowered. Or if people hang onto their old cars longer, because they don’t want the new cars (which will likely be smaller and have less power).
May 19th, 2009 at 10:00 am
Another possible/probable fly in the ointment:
“Under the new standard, the national fleet mileage rule for cars would be roughly 42 miles a gallon in 2016. Light trucks would have to meet a fleet average of slightly more than 26.2 miles a gallon by 2016.”
“The current standards are 27.5 miles a gallon for cars and about 24 miles a gallon for trucks. The new mileage and emissions rules will gradually tighten, beginning with 2011 models, until they reach the 2016 standards.”
So it’s quite possible that people will shift from cars to more light trucks, reducing or even eliminating any fuel savings.
May 19th, 2009 at 10:07 am
-1-2-Mark
Of course. Which is why policy evaluation is needed along the way. Policies are experiments, and fortunately can be revised and adjusted along the way.
May 19th, 2009 at 10:32 am
More Big Brother crap put out by folks like BHO and his ridiculous band of tax-cheats, who are technologically illiterate and don’t have even enough understanding of physics to know that there is a practical LIMIT to the gas mileage a car can get, given constraints of cost, safety and convenience. I don’t believe that the Govt should dictate what I drive, but that is exactly where we are going here, in the long run.
May 19th, 2009 at 10:39 am
As I point out here, significant Air Traffic Control reform would save 36mmt of emissions per year, which amounts to 0.4gtc over 7 years. That puts it in about the same ball park as this, yet this program is being rammed through at undoubted cost to the economy ($1300 increased cost per vehicle, the administration admits), while the other is being conspicuously ignored.
May 19th, 2009 at 11:41 am
I am a skeptic on the issue of AGW but I do believe in efficiency. The increased efficiency being mandated is not pie in the sky, it is eminently achievable, most likely even without the use of hybrid technology. My only beef is that the DoE should have been moving toward this kind of standard over the last 20 years rather than seeing it implemente now through the EPA. This ruling and EPA’s CO2 finding also begs the question, is DoE irrelavant now. Is there any policy to be made at DoE that EPA won’t have the final say on.
May 19th, 2009 at 12:51 pm
1) If the vehicles are more expensive as a result of the mandates, that creates incentives to hang onto older vehicles longer thus marginally offsetting the projected emissions and efficiency improvements. I don’t see that factored in.
2) I suspect that it won’t take much to knock a highly tweaked engine off of maximum performance. We learned after the last two major rounds of Clean Air amendments that “deferred maintenance” degrades the hell out of expected emissions performance.
Given that Congress and state legislatures hate to impose vigorous inspection regimes and always instead try to somehow keep the onus on the car maker rather than car owner, a lot of gains will not be realized.
(DISCLOSURE: I used to lobby for automotive-related businesses and was immersed in the the various impacts arguments of the 70s, 80s and early 90s)
3) I suspect a hefty tax increase on gasoline would result in fewer miles driven, more fuel savings and higher incentives for efficient cars and would be a much more efficient way to achieve the same goals.
4) If Detroit lags in meeting this standard (any bets?) Congress will grant the industry delays (there is ample precedent). Therefore, the likelihood of this unfolding on the timetable presented is slim.
5) The truth is that if in addition to higher fuel costs thru taxation, a performance mandate were placed on vehicle owners rather than the makers to meet new standards (even requiring retrofit of older vehicles), the competition to get that done cheaply would be fierce and the emissions and efficiency gains enormous.
But the Command & Control mindset now back in power wants to magically effect change by directing the bad corporate people in Detroit to somehow make it all work while pretending none of this will impose any costs on the rest of us.
6) With respect to greenhouse impact, using Patrick Michaels’ figure of 1,767,250 million metric tons of CO2 per 1 degree C of warming (see: http://www.worldclimatereport.com/index.php/2009/04/30/what-you-cant-do-about-global-warming/#more-376) if we actually get the full CO2 reductions promised by this plan, we would reduce global warming by only 0.00018 degrees C. Not all that impressive.
May 19th, 2009 at 1:48 pm
Sean:
“I am a skeptic on the issue of AGW but I do believe in efficiency. The increased efficiency being mandated is not pie in the sky, it is eminently achievable, most likely even without the use of hybrid technology. ”
“Efficiency” can be a very loaded term. More mpg is not necessarily more efficiency. You have to look at the COSTS of doing this. Here are some appropriate comments from one of my favorite commentators: http://factsnotfantasy.blogspot.com/
May 19th, 2009 at 3:45 pm
Unless US manufacturers are allowed to count captive imports against their fleet averages, which they aren’t allowed to do now, this will mean even more unattractive cars manufactured with expensive union labor and sold at a loss. The consequences are obvious. Anybody want to bet that Chrysler will be able to count imported Fiats but Ford won’t be allowed to count its European cars.
May 19th, 2009 at 4:56 pm
Jae, being a boomer and a tightwad one at that I recall my ‘88 Mercury Topaz with a 5 speed manual transmission that cost me all of $12K brand new. Commuting back and forth to work (80% freeway) I could get 32 MPG and 38 MPG on a long trip. The car held 5 people and had a decent sized trunk. Somehow, I know there are a few car designers who would not have a problem designing cars for old farts like me as opposed to the lead footed gear heads who right automobile reviews. I think with 20 years of materials, manufacturing and engine technology it would not be all that heard to increase the efficiency 10% even with the added safety features and WITHOUT hybrid technology. These are reasonable goals that really can save people money getting from point A to point B. Now for those whose sense of power and virility is wrapped into the vehicle they drive, that may take a bit more work.
May 19th, 2009 at 5:57 pm
I am a climate skeptic. And, after scraping frost off my car on May 19, I think my skepticism is justified.
I view the cost of foreign oil as a significant problem though so I may put my skepticism aside if I think the legislation accomplishes anything.
Let me state what I think about the Waxman bill from a compliance standpoint. It is complete and abolute stupidity. I agree with Dr. Pielke comments that if you do implement a tax, it should be imposed at the highest level. You don’t ask a laundromat to count carbon and you don’t ask a steel mill too either.
Another act of stupidity is the CAFE standards. My attitude is that if you want to do something, pass a gasoline tax. Let me say that Carter took credit for implementing those CAFE standards. Well, Carter never did anything constructive. If you remember history, Carter actually fought for price caps on gasoline, a tremendous incentive to consume and consumption did not drop until those price caps were taken away. And, John Anderson who ran for the Republican nomination wanted to put a significant tax on gasoline. (He won a few primaries but not the nomination.)
The CAFE standards have been a failure. They have actually encouraged the development of SUVs which weren’t subject to the CAFEs. Talk about perverse incentives.
Anyway, it makes more sense to do what every other oil importing country has done — Put a tax on gasoline, diesel, aviation fuel and heating oil that would discourage consumption. (I would also put a tax on plastics because of oil use.) The tax could be phased in.
End the nonsense with CAFE, end the nonsense with the carbon tax, end the nonsense with the complex CAP and TRADE. And CAP and trade is even worse because of the potential for abuse.
May 20th, 2009 at 11:23 am
Since it appears more than half of a barrel of oil is consumed in other petroleum products (e.g., from the EIA – jet fuel, home heating oil, liquified petroleum gases, ink, crayons, bubble gum, dishwashing liquids, deodorant, eyeglasses, records, tires, ammonia, and heart valves), then must it also be assumed that there is either a glut in these other products or efficiencies in these other areas will be achieved to save those 1.8 billion barrels of oil?
Is it not more appropriate to say that cap and trade is just that much less expensive when raising the cost of energy by not spending on the so called savings in 840,000,000 gallons of gasoline over the seven year life of the program?
May 20th, 2009 at 12:21 pm
Let’s not overlook the fact that carbon dioxide emissions are not a climate measure. So if the reasons that we are interested in reducing carbon dioxide emissions has something to do with imparting a climate change, we shouldn’t be satisfied with only quantifying the effects of any regulation on CO2 emissions—that tells us nothing about the effect of the regulation on any aspects of climate.
Tools abound to convert between emissions reductions and climate change—they are called general circulation models. But even lacking full GCM runs comparing the future climate with and without the projected emissions reductions achieved through some piece of legislation, there are still other ways at getting a good handle on the climate impact. These methods include GCM-emulators, like NCAR’s MAGICC, as well as some even simpler (and rougher) back-of-the-envelope calculations. I describe the latter in a recent article (http://www.worldclimatereport.com/index.php/2009/04/30/what-you-cant-do-about-global-warming/), in which I develop a handy-dandy converter to get from CO2 savings to global temperature savings. Applying my converter to Roger’s 320mmtCO2 (0.32 gigtonsCO2) total program CO2 savings produces a resulting global temperature savings of ~0.0002ºC.
So if climate is the goal, then the 0.0002ºC number is the one that Roger and Carol Browner ought to be advertising, not barrels of oil or gigatons of CO2.
-Chip
May 21st, 2009 at 9:28 am
Hi Roger,
You write, “1-2-Mark: Of course. Which is why policy evaluation is needed along the way.”
So we have a policy that is estimated to reduce gasoline consumption by about 3.5% per year over the 7 years of the program. And I pointed out that the reductions are likely to be less, and could even be zero. You agreed.
So how is this “actually quite significant”?
It saves a trivial amount of fuel, and gets the President and the Congress intimately involved in an industry about which they know virtually nothing. (And it’s an industry that already has enough problems on its own!)
When you mentioned the “Revenue-Neutral Carbon Tax” (HR 2380) you didn’t give any indication that you supported it. Indeed, your one comment about it was that “it starts by taking science off the table”.
http://sciencepolicy.colorado.edu/prometheus/what-a-carbon-tax-proposal-looks-like-5215
Do you think that a president promulgating automobile and light truck fuel standards is better policy than a simple tax on carbon (with a concomitant and equal reduction in payroll taxes)?