A loophole in US crackdown on carbon emissions from cars

US gives carbon emission credits for hybrid, electric, and other alternatively fueled cars. The loophole is aimed at spurring the alternative technology.

Jessica Rinaldi/Reuters
The all-electric Nissan Leaf, seen on display at the New York International Auto Show Thursday, is one of the cars that would get a zero-emission credit in new US limits on carbon emissions from cars. Regulators hope the loophole will spur automakers to produce alternatively fueled vehicles.

The federal government's tough new fuel economy and greenhouse-gas emissions have a big green loophole: electric and other alternatively fueled cars.

In its effort to encourage the technology, the Environmental Protection Agency (EPA) is giving automakers a pass on each so-called "green" car they produce.

Here's how it works. Starting in 2012, automakers will have to produce a fleet of cars and light trucks that produce on average no more than 295 grams of carbon dioxide per mile. By 2016, the standard tightens to an average 250 grams per mile. That's the equivalent of 35.5 miles per gallon.

But automakers can get a credit for each electric or other alternatively fueled vehicle they produce. The EPA will pretend that the first 300,000 such vehicles that an auto company makes (200,000 for small automakers) produce zero emissions. Hybrids get credit for the amount of range provided by their batteries.
The agency says it's offering the incentive in the hopes of promoting the technology.

That's a noble goal, but it relaxes the pressure on auto companies to improve their conventional fleet, says David Friedman, research director of the vehicles program at the Union of Concerned Scientists in Washington.

For example: The more Nissan boosts sales of its upcoming all-electric Leaf, the less it will have to improve the fuel economy of the rest of its cars.

Once automakers reach their 200,000 or 300,000 limit on alternative vehicles, then the EPA will begin to figure the emissions costs of producing the electricity or other fuel that powers the alternative cars.

If new climate legislation gets passed, the EPA could reexaming the issue, perhaps giving even low-mileage vehicles a zero-emissions designation if they're powered by renewable fuels.

Mr. Friedman and others argue that there are better ways – through subsidies and tax credits – to encourage the new technologies. "Do we really want automakers to go back to selling Hummers and claiming that they're zero-emission vehicles?" he asks.

Still, Thursday's announcement of the new standards will be a huge benefit to consumers and the environment, he adds. "This is a historic rule and this is a day to celebrate."

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