There's good news and there's bad news behind the federal government's recently announced plan to reduce greenhouse gas (GHG) emissions from new personal vehicles.
The good news is that these regulations represent a step toward addressing a key source of Canada's climate change pollution, since about 12 per cent of national GHG emissions come from personal vehicles. The bad news is, there appear to be enough loopholes in the regulations to prevent them from making much of a difference.
Pembina's analysis of the proposed regulations highlights three key problems. First, the regulations include "early action credits," which essentially allow manufacturers to avoid making future changes if their current performance (often referred to as "business as usual") is better than what the government has identified as the baseline. Rewarding more progressive companies is a good idea in theory — but in this case, since manufacturers are already making personal vehicles far more efficient, on average, than the baseline level set by the government, the regulations give companies credit for work they're doing anyway, removing much of the incentive or requirement for manufacturers to produce more efficient vehicles in future.
The second problem lies in the numbers the government has used for its calculations. It's difficult to tell when the regulations will start having an effect, because of a lack of transparency in Environment Canada's data. Even if we set aside the early action credits problem — the government's current numbers indicate that these regulations are unlikely to begin reducing GHG emissions from personal automobiles before 2015, while they may have no impact on carbon emissions from light trucks (such as pick ups and SUVs) before the end of the regulations' life span in 2016.
Finally, Environment Minister Jim Prentice has said the proposed regulations will be harmonized with those being implemented in the U.S. But the Canadian personal vehicle fleet has historically been more efficient than the American fleet, and our analysis shows that harmonizing Canadian and U.S. standards would sacrifice that advantage by requiring a 19.5 per cent efficiency improvement for the average Canadian vehicle from 2011-16, compared to a 23.1 per cent improvement in the U.S. (Again, that's without counting the effect of the early action credits). In fact, Canada could meet more stringent greenhouse gas standards than the U.S. without automakers needing to produce Canada-specific models — because the standards do not apply to individual vehicles, but rather to the average tailpipe emissions from a company's entire fleet.
Minister Prentice has called these standards "extremely ambitious" — but our analysis shows they're anything but. We'd like to see the government address the problems we've identified by adopting much simpler regulations that set a single corporate average emissions standard for cars and light trucks combined, rather than for each category. This standard should be set at a level that maintains Canada's efficiency advantage over the U.S., and results in true efficiency improvements over business as usual, without allowing manufacturers to claim artificial early action credits.
When it comes to fuel efficiency, Canada must do much better than business as usual, because as our population grows, there will be more vehicles on the road. Without strong regulations to improve fuel efficiency in those vehicles, the total emissions from Canada's cars and light trucks will continue to increase.
Ultimately, making vehicles more efficient isn't just about taking action on climate change — it's also about offering consumers better options. If the average vehicle lasts 10 years, choosing a car that's 10 per cent more fuel efficient than average means the equivalent of getting free gas for a year.
Now that's a climate change solution that works for Canadians.
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