By Jack Baruth
Wednesday, Mar 13th, 2013 @ 11:45 am
Seven years from now, carmakers in the European Union will have to meet a fleet average of nearly 58 mpg. We're not talking CAFE-style measurements, either: The requirement is actually based on carbon dioxide emissions. The EU lawmakers say that the technology already exists to meet the requirements.

There's just one problem: the automakers disagree. They'd thought that electric vehicles would make meeting the requirement easy, but EVs aren't working like they were supposed to.

An article in the Financial Post provides a long list of manufacturers retreating from EV production with the haste and lack of decorum typically associated with the French Army circa 1940. From Audi to Toyota, electric cars are being canceled, "scaled back," or left on the drawing boards. The hoped-for improvements in battery storage technology simply aren't happening, and there's no clear indication that they will happen soon.

The year 2020 may not seem right around the corner to most of us, but for auto manufacturers who need to make production plans for that year within the next 48 months, it's close enough to incite a general sense of panic. Even the traditional European model mix sold by most manufacturers, which is heavy on small diesel-powered hatchbacks and light on V-8 hypersedans, won't come close to meeting the requirements with any known engine technology. If BMW put one-liter diesels in their entire lineup, they'd still end up paying millions of euros in fines.

Having watched their electric-vehicle bets swept off the table by the battery problems, companies like Peugeot and Mercedes-Benz are placing their next round of chips on everything from compressed-nitrogen hybrids to the always-popular but never-practical fuel-cell technology. Volkswagen is betting on micro-sized diesel-hybrid drivetrains powered streamlined microcars that bear an uncanny resemblance to a medical suppository. If there was a supplier with a magic bean factory somewhere in Europe, presumably there would be at least one multi-billion-dollar corporation making press releases about sustainable magic-bean-driven automobiles.

To the American observer, particularly one who does not subscribe the notion that the Western world needs to drastically reduce its consumption of fossil fuel so there will be more available for China to use to build its industrial base, the whole exercise borders on the ridiculous. What's the point of creating standards that are seemingly designed to be impossible to meet?

The end result of the regulation will be a double whammy of higher transaction prices for cars; the technologies required to make the 95 g/km standard will be crushingly expensive and the cars that can't meet the standard will cost thousands of dollars more than they would otherwise. The increased cost of new cars will ensure that older, higher-consumption, higher-polluting vehicles stay in use for years longer than they would if reasonably-priced alternatives with a moderately decreased CO2 emissions rate were available. Surely the system is broken, right?

It's never a sound idea to automatically assign malice as a motive to governments when incompetence is also plausible, but in this case I think there's a strong case for doing so. The brain trust in Brussels isn't stupid enough to think that the rate of oil extraction will slow for a microsecond if every car in the EU manages to run on solar power. Nor are they blind to the chilling effect that higher prices have on vehicle sales.

I would suggest here that the sole purpose of the 2020 regulations is to increase the cost of driving and therefore increase the competitiveness of centrally-controlled mass transit alternatives. The fact of the matter is that private automobile ownership is almost universally preferred by free citizens throughout the world. They will work and sacrifice to have it. They will jump through legislative hoops and submit to crushing tax burdens. Even dedicated urban dwellers who can't bear the thought of living anywhere but New York or Paris or Tokyo would, given the choice, have a car to take out of town on the weekends. Every morning, the freeways of Chicago and other cities comes to a dead halt while trains speed past on tracks laid in the median - and every morning, those same commuters choose to sit in traffic again rather than take the train.

The dream of private car ownership is nearly as universal as the desire for food and shelter, and it's considerably more universal than the desire for self-governance, universal health care, or representative democracy. Maslow's pyramid has a BMW balanced on its peak and a Renault Twingo parked in a mid-level garage. Since the end of World War II, the European governments have done everything imaginable to break their populations of the automotive habit, from rapacious gas taxes to Byzantine licensing schemes, and still the showrooms are full of buyers every year. Something, clearly, must be done.

Viewed in that light, the 2020 regulations make more sense. Unless there really is some sort of magic-bean solution deployed in the next few years, compliance with the new round of EU directives will directly result in an increase of new-vehicle transaction price and a corresponding decrease in new-vehicle purchases. This will lead to an increase in used-car prices. That, coupled with the aggressive inspection-and-taxation programs of which Euro governments are so fond, will cause a nontrivial number of people to drop off the long tail of the car ownership chain. They'll go from masters of their own destiny to readers of the bus schedule. Their job opportunities, social plans, and life experiences will now be bound by the realities of mass transit. The fuel they would have burned will be burned somewhere else, and the planet will suffer the putative consequences identically. Nothing will change.

The few people willing to speak in support of this kind of regulation will tell us that fuel-economy rules spur innovation. History disagrees. The implementation of CAFE brought us the X-car and the Ford Explorer, in that order. The preoccupation with carbon dioxide found in Euro regulations forced millions of people to switch to diesel-powered cars, with their attendant carcinogenic risks. The most popular fuel-saving car in North America, the Toyota Prius, is in no way a product of legislation or regulation. It's simply an efficient vehicle that operates reliably. The next revolution in efficiency and reliably, when or if it appears, won't be driven by the motion of a bureaucrat's pen. It will be created by the mind of an engineer, and that engineer will neither be hurried nor delayed by the rules of 2020.
