Market-Oriented Fees And Rebates For Vehicles Can Help Planet, Pocketbook

The University of Michigan's Transportation Research Institute has just published a study on the effectiveness of a new method to reduce greenhouse gas emission in California. While it may seem strange that an out-of-state university is concerning itself in California's affairs, we'll take it: the findings are pretty encouraging.

The study concentrates on pollutants emitted by vehicles, as passenger cars and trucks account for 20%-30% percent of the state’s global warming pollution. The state's current regulation is the so-called "Pavley" approach, named for Assemblywoman Fran Pavley. Under it, there are phased-in vehicle emissions limits from 2009 through 2016. The new method discussed in the report is called a "feebate" method--a "feebates program" includes fees and rebates commensurate with the amount of pollution a purchased vehicle emits. Specifically, a one-time surcharge would be paid for a vehicle at the higher end of the pollutant scale; these very fees would fund the rebates given to those purchasing low-emissions vehicle. The idea is that, accordingly, the program would be self-supporting, as well as recognize "the power of price signals to change consumer behavior."

Ultimately, the study theorizes a win-win-win situation: a reduction of up to 25% more pollution than Pavley alone; thousands of dollars in savings for consumers, and even a bump in retail revenues. The full report is available here.