Although as yet unofficial, an exciting new development is expected when President Obama will soon – probably later today – announces new federal rules for automobile emissions and mileage standards.

When Obama cleared the road for a federal waiver, which would have allowed California (and 13 other states which would have followed suit) to develop more stringent fuel efficiency standards, there were concerns that this will lead to a patchwork of regulations around the country. The new regulations which are about to be announced should redress these fears and bring the whole of the US up to the standards set by the Californian regulations (see fact sheet for California’s regulations, though the two set of rules use difference measurements, so complex conversions are needed to actually compare them). They will also mark the first ever limits on GHG tailpipe emissions in the United States.

Although some of the details are not completely clear, and there seems to be some confusion as to exact numbers, these rules which will take effect in 2012, will create a car and light truck fleet which is about 40% cleaner and more efficient than what we have today, by 2016. This is four years earlier than is required under current federal law, which was passed in 2007 but never enforced, as no regulations were made by the Bush administration.

This development will have wide support as it follows months of discussions with the ailing American auto industry, as well as fit in with the Waxman-Markey ACES bill which calls for a nationwide standard. Car manufacturers welcome the pending announcement in part because this will allow them to better plan for the future market, after finding themselves lagging behind Japanese and European manufacturers.

The expected announcement is naturally also supported by environmental politicians and NGOs. And as Daniel Becker, director of the Safe Climate Campaign said – “This is the single biggest step the American government has ever taken to cut greenhouse gas emissions.”

UPDATE - and now it’s official. With executives from 10 automakers by his side, and environmental leaders applauding from the audience, President Obama announced a new national fuel efficiency policy. The policy will cover model years 2012-2016, and by 2016 will require an average fuel economy standard  of 35.5 mpg (or 15km/litre. Compare this to the 35 mpg by 2020, which is what the 2007 CAFE law requires. The current average is 25 mpg). Obama mentioned that 1.8 billion barrels of oil will be saved over the lifetime of vehicles sold in the next 5 years (this is the equivalent of shutting down 194 coal plants or taking 58 million cars off the roads for a year).

This policy is a result of an unprecedented collaboration between the Department of Transportation, the Environmental Protection Agency, Amrican auto manufacturers, the United Auto Workers, environmental leaders, the State of California, and other state governments.

UPDATE #2 – more details coming through mention that the EPA will indeed regulate tailpipe emissions, which has never been done before, and that Congress does not need to aprove these standards as they will be implemented through federal rules (which – together with the strong alliance backing it up – means that this is not just a pretty statement, but is a policy able to bring real changes).

Some thoughts - one of the things mentioned again and again by the different people involved, is how much collaboration went into this. It is a unique alliance between groups representing very different interests (auto industry, state governments, environmental NGOs, etc) all “marching forward in the same direction.” as California Governor Arnold Schwarzenegger said at some point. Obama notes this as well, mentioning in his statement that “it represents not only a change in policy in Washington but the harbinger of a change in the way business is done in Washington… No longer will we accept anything less than a common effort, made in good faith, to solve our toughest problems.” As the problems facing the US are are indeed tough and deeply rooted, I only hope that this is really true, and not just wishful thinking from a man who sought to ‘reach out across the aisle’ since his first days in office (and was constantly rebuffed)

UPDATE #3 – questions have been raised about how this will affect the struggling ethanol industry which is currently trying to increase the national standard from a 10% ethanol blend (that is, ethanol constitute 10% of the blend sold at the pump) to a 15% blend. Some analysts say a tougher fuel efficiency standard might harm the industry as ethanol has a lower energy content than gasoline. However when questioned, Carol Browner the president’s assistant on energy and climate change, said she did not know the answer to that.

While sorry for the workers in a struggling industry, I can’t say that I will be sorry to see the strong ethanol lobby run into some difficulties or the industry forced to change the way it produces biofuels. Heavily subsidized corn based ethanol is not the way to produce carbon neutral fuels, nor is it beneficial to the American economy as a whole.

UPDATE #4 – The new policy resolves the conflict between the federal government and the state of California regarding fuel standards. Which means that the lawsuits connected to said conflict will now be dropped and these resources can be directed elsewhere (maybe sending more environemental lobbyists to Washington??).

Last year France was axed from the Grand Prix calendar after the French motorsport federation withdrew support of the Magny-Cours track, citing lack of funds.  Formula 1 CEO, Bernie Ecclestone, ruled out returning to the rural venue, with his sites set on a Paris race date to grace the Formula 1 calendar.

Things were looking up for Formula 1 racing fans earlier this year though.  In March 2009 plans to construct a new  €112 million track at Flins-Les-Mureaux, north-east of Paris, were announced.  The site beat out competition from four other venues on the French shortlist; it was the cheapest of the sites.  

From the beginning this news has stirred up controversy over the potential pollution wafting into the city from construction and the races.  Now the controversy is going towards all-out political battle at the highest echelons of power.

In one corner is France’s PM, François Fillon, who has competed in the LE Mans Legend historic sports car race and takes a keen interest in the FIA.  He fully supports the proposed site of Flins-Les-Mureaux.  But French Environment Minister, Jean-Louis Borloo, and the Secretary of State for Ecoology, Chantel Jouanno, are much less than enthusiastic. 

Borloo and Jouanno say that construction and racing at the site is environmentally irresponsible.  Though much of the rhetoric revolves around air pollution and related climate change, the real issue is Parisian drinking water.  A drinking water table that supplies about 500000 Parisians, passes directly under the race track site.

This past weekend, hundreds of environmentalist demonstrated in Versailles against the track.  Their banners read: <<F1: Non, Organic [Framing]: Oui.>>  Many analysts agree that there is merit to reconsidering the site, but also stress that the issues are being taken out of context and are reflecting a larger political issue.

Alain Prost, the former quadruple World Champion and strong supporter of the new track, told Le journal du Dimanche newspaper: “things need to be clear at the government level” He acknowledges that public debate is possible, but current plans to stage the Grand Prix there in 2011 would be greatly complicated.  The review process is also complicated because of memories of failed plans to build a track near Disneyland Paris in recent memory.

Track architect, Jean-Michel Wilmotte, insists that the circuit will actually be “the world’s first totally ecological race track.”  Minister Borloo is also being criticized for vetoing the project without hearing conclusions from independent experts.

This seeming political game becomes even more complex because most Formula enthusiasts believe that Flins-Les-Mureaux is the only chance of France returning to the Formula 1 Calendar in the foreseeable future.  The question simply becomes: to what extent might France pollute in potentially dangerous ways to win back their race?

Introduced as a seemingly small addition to make the Germany’s economic stimulus package seem more specific in helping consumers and the automotive industry, the wrecking bonus has become a breathtaking success. It’s formula is very simple: anyone who buys a new car which meets EURO IV exhaust limits gets 2500€ from the government as long as the old car is not sold on but destroyed. The initial 1,5 billion € (enough for 600.000 cars) was quickly used up, and under the pressure of car owners, many of whom had already bought a new car and now faced uncertainty about whether they would receive the bonus – was extended to 5 billion € and until the end of 2009.

The wrecking bonus was clearly successful in some ways: 1.4 million Germans put in claims for the wrecking bonus so far. In the days after the online system for claims went online 200.000 to 300.000 claims a day reached the agency in charge of administering the wrecking bonus, crashing their website and forcing them to employ extra staff to deal with the backlog. The association of automotive producers’ figures show that car sales from January to April 2009 in Germany exceeded those of the year before by nearly 20 percent. Yet despite stimulating car sales, the wrecking bonus is not environmentally friendly, and looking at the opportunity cost of the money spent – the side-effects, and the hang-over that might follow from it, show how.

The question of how ‘green’ the wrecking bonus is has been discussed here before. While Sigmar Gabriel, minister for the environment, likes to call it ‘Umweltprämie’ (environmental bonus), producing new cars and wrecking old ones is energy and ressource intensive. Furthermore, there is no clear incentive in the wrecking bonus to buy environmentally friendly cars, as EURO IV is mandatory anyway and cars don’t have to fulfil more. It also does not create a greater incentive for those wrecking especially polluting vehicles and exchanging them for especially clean ones. Nevertheless, the wrecking bonus has led to a shift towards buying cheaper and (therefore) cleaner cars, creating the political paradox of leading to domestic producers of large cars (Mercedes, Audi, Porsche, BMW) not benefiting to the extent of foreign producers like Fiat, Dacia, and Toyota.

From an climate change point of view, the positive impacts of the wrecking bonus have nevertheless be weighted against other ways to spend the money. Here the wrecking bonus quickly looks environmentally much less attractive. 5 billion € could have gone a long way in other fields. In energy efficiency, development of electric cars, increasing the pace of renewable energy deployment this kind of money could have given a crucial push to an industry which is becoming more significant and has a clear mandate for future growth – unlike the automotive industry. Furthermore, no-one can empirically validate how much of the extra-spending on cars is unblocking delayed demand, and how much of it is merely pulling forwards car purchases which will now not be conducted in the years to come.

With regards to electric cars, the fallacy of the wrecking bonus possibly becomes clearest. The German government supports some field trials of electric cars in selected cities, as well as subsidising technology needed to make these cars ready for the market. By increasing these subsidies as well as creating buying incentives similar to that of the wrecking bonus exclusively for electric cars – as China, among others is considering – German companies could have benefited and Germany could have had the crucial first-mover-advantage in a field that will clearly be crucial in the decades to come. But, the money is spent, both by consumers and the government. Some of the 1.4 million Germans that bought a car in the first four months of this year might have considered buying an electric, hybrid, or other environmentally-friendly car next year. More would have done so given a significant government support in doing so. But that money is spent, and an opportunity missed.

Sigmar Gabriel, minister for the environment and former prime minister of lower Saxony, welcomed the second ‘Konjunkturpaket’ (stimulus package), as a chance for both job creation and the environment. Public investment would be subject to environmental guidelines, while changing car taxation to a CO² basis and paying car owners to get rid of old cars (or, rather, for buying new ones), would be a big step towards a more environmentally friendly fleet of cars. Two days after saying this (and after the package was passed), his ministry published a report showing that German companies were holding a large sharge of business in fast-growing environmental technology markets, and had already created 1,8 million ‘Umweltjobs’ (green jobs) in Germany.

Yet, while the growth of companies and jobs in green technologies is certainly encouraging, with regards to the stimulus package’s environmental impact, the reactions of commentators and interested parties was telling. The automotive and construction industries were positive to enthusiastic about the car tax holiday and the bonus to buy new cars. Environmenalists were not. A newspaper commentary reminded readers that Angela Merkel, in 1995 still as minister for the environment, had strongly opposed the idea of a bonus to buyers of new cars, and called the measure ‘ready for the scrap heap’. DHU and VCD, a environmental NGO and a left-leaning motring association, pointed out that most emissions are created when a car is manufactured, and that the bonus only creates an incentive when the value of an old car is below 2500€, this mainly being the case for cars which (because they are small) don’t emit most emissions anyway. Worse, they provide a model calculation showing that under the new car tax proposals (even though they will be based on CO² emissions), the most polluting cars will actually pay a lot less than before.

Those arguing that the measures aimed at the car industry are in fact only a small part of the stimulus package are right, but there is scant evidence of environmental measures elsewhere in it. While spending on infrastructure (such as modernising schools) will a positive impact on energy efficiency, this is accidental rather than reflecting conscious design. The same holds true for much of the package. Even if the car stimuli have (which seems doubtful) a positive environmental impact, they are designed to shore up manufacturing jobs. And the draught of measures stimulating those green industries that have already created 1,8 million jobs in Germany is disappointing, but also suggests that in a time of crisis, most German politics are scared to believe their own rhetoric.