NEWS California And Automakers Strike Deal To Lower EmissionsJuly 25, 2019

The land­mark deal worked out between Cal­i­for­nia and four major automak­ers for more fuel effi­cient cars isn’t just good for the envi­ron­ment — it could also be good for car com­pa­nies’ bot­tom lines.

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Two sets of rules for vehi­cle emis­sions — one fed­er­al and one for Cal­i­for­nia — would be bad for automak­ers, accord­ing to Dan Kam­men, chair of the Ener­gy and Resources Group at UC Berke­ley.

“Set­ting stan­dards for less-effi­cient cars and try­ing to keep a pro­duc­tion line open for those, while the glob­al trends are going the oth­er direc­tion, is real­ly a very cost­ly move for the auto man­u­fac­tur­er,” he told KCBS Radio.

He says that’s why Ford, Hon­da, Volk­swa­gen and BMW have reached an agree­ment with the state to pro­duce more fuel effi­cient cars, even as the Trump Admin­is­tra­tion push­es ahead with a roll­back of mileage standards.

Econ­o­mist James Sallee, also at UC Berke­ley, says auto mak­ers see the writ­ing on the wall.

“Regard­less of how they view envi­ron­men­tal issues inter­nal­ly them­selves or whether they’re will­ing to put any val­ue on it, I think they see a cer­tain inevitabil­i­ty that the trans­porta­tion sec­tor is chang­ing and that they’d like that change to kind of pre­dictable, grad­ual and con­sis­tent in order to let them make their invest­ment choic­es wise­ly,” Sallee told KCBS Radio.

The Trump admin­is­tra­tion, which will like­ly chal­lenge this deal, has argued that relax­ing emis­sions stan­dards would low­er the stick­er price of vehi­cles and encour­age con­sumers to buy new­er, safer cars.