Clean Car Program to Promote Green Cars, Increase Savings

In the race to promote green cars among car buyers, legislations have been passed and marketing strategies have been formulated. In the State of California, true to Governor Arnold Schwarzenegger’s promise, these steps are already being implemented by the State government and the private sector.

The University of Michigan’s Transportation Research Institute (UMTRI) recently made a study concerning a possible incentive program which will promote the sale of green cars in California. The findings show that the incentive program can lead to a 33 percent reduction of greenhouse gas emission. The program not only helps the environment but also help drivers save on their fuel expenditures. The study found out that on an average, green cars can offer as much as $2,500 savings in fuel consumption.

The said program studied by UMTRI is known as the Clean Car Discount. This program offers a timetable of fees and rebates dubbed as “feebates”. The said feebates will be based on the amount of greenhouse gas emitted by the vehicle that car buyers will purchase. Of course, the less greenhouse gas a vehicle emits, the more the incentive that will be offered.

Currently, different clean car technologies are being employed by car manufacturers. In California, known as the hotbed of Asian car manufacturers, hybrid vehicles are the most popular green cars. The promotion of other clean car technologies such as clean diesels and flex-fuel vehicles is the aim of the new incentive program. Not only will the incentive program encourage car buyers to purchase green cars but also affect car manufacturers. “Our analysis shows that by harnessing the power of price signals, feebates spur consumers to purchase and manufacturers to produce cleaner vehicles,” says Walter McManus, the director of UMTRI’s Automotive Analysis Division.

The study conducted is entitled “Economic Analysis of Feebates to Reduce Greenhouse Gas Emission from Light Vehicles for California”. The said analysis is based on “The California Clean Car Discount Act” (AB 493) which is authored by State Assemblyman Ira Ruskin of the 21st Assembly District. The bill states that the California Air Resources Board or CARB must provide rebates to first time car buyers. The said rebates will be made available to those who purchase green cars or those with low global warming potential. The bill states that about twenty to twenty-five percent of cars and trucks will not be made available with the rebates. This may include large vehicles such as SUVs and pickup trucks such as the Chevrolet Colorado whether they are equipped with Chevrolet pickup traction bar or not.

The said legislation is expected to be considered by the California Assembly Appropriations Committee by the end of this month. Voting on the bill is expected to commence by early June.

The study made by the UMTRI examined the effect of the incentive program on the amount of greenhouse gas emissions released by vehicles on the State’s roads. The incentive program is also examined how it will work with the existing Global Warming Solutions Act of 2006 in reducing the amount of greenhouse gas released onto the atmosphere by cars and trucks. The study found out that the present greenhouse gas regulation reduces greenhouse gas emissions by as much as 26.7 percent. The said legislation enforces a limit on greenhouse gas emission by different industries in the state of California and imposes penalties for industries unable to comply.

With the existing regulation combined with the proposed bill which offers feebates at $18 for every gram of carbon dioxide emitted by a certain vehicle per mile, greenhouse gas reduction is 25 percent more than what the present regulation can do on its own. The present and the proposed regulation when used together can also help retailers earn by as much as 6.7 percent. This is because the feebates is expected to boost the sale of green cars. “We concluded that a feebates program combined with California’s Pavley law is a potent policy solution to reduce global warming emissions because everyone gains – the consumer, the retailer and the environment we share,” says McManus. This proposed bill when passed into law will greatly reduce California’s greenhouse gas production since cars and trucks produced about a third of the total greenhouse gas emissions of the state. Presently, there are in excess of 20 million passenger vehicles on the state’s roads. That number is expected to rise by as much as 1.9 million vehicles every year.