August 8, 2005
Supply and demand | Will consumers buy low-emission vehicles just because Maine mandates that dealers stock them?
By Jeffrey Bouley
Even in heavily wooded, sparsely populated Maine, the air isn't as clean as it could be.
Consider the statistics: Part or all of eight counties in Maine received designation of "nonattainment" for the eight-hour ozone standard in 2004 by the U.S. Environmental Protection Agency. Or, as the Environment Maine Research and Policy Center puts it, half of Maine's counties are out of compliance with air quality standards for smog as outlined in the federal Clean Air Act.
In addition, Maine has the highest childhood asthma rate in New England, according to the Natural Resources Council of Maine. The incidence of asthma is exacerbated by pollution ˆ and the 1.1 million registered cars and trucks in Maine cause most of the air pollution here, according to the NCRM.
The state of Maine and various environmental interest groups think the answer ˆ or at least the start of an answer ˆ to the state's dirty skies can be found in a new "cleaner car law" signed on May 31 by Gov. John Baldacci. The law aims to get more low-emission vehicles on the road, in order to replace older, higher emission vehicles.
Under the new rules, beginning with model year 2009, which starts in calendar year 2008, 11% of all vehicles sold in the state will have to be the "cleanest of the clean," according to Ron Severance, director of program planning for the Bureau of Air Quality at Maine's Department of Environmental Protection. "That means a combination of true zero-emission vehicles, as well as hybrid vehicles and super-low-emission vehicles, otherwise known as partial zero-emission vehicles." (See "Alphabet soup" on p. 30 for more on what these terms mean.)
However, automobile dealers aren't necessarily convinced this is the right approach. While it's one thing to require that vehicles be manufactured to certain emission specifications before they ever get shipped to a car lot, say many dealers, it's quite another to put the burden on those who sell the cars. After all, they say, they don't control consumer tastes, and they cannot force people to buy something at a certain rate. And none of them wants to have vehicles on the lot that might not sell.
The road back to California
How Maine got to the cleaner car law is a story that begins in 1999, but really goes back to the 1960s and the state of California. November 1999 marked the start of Cleaner Cars for Maine, a consumer labeling program that helps car shoppers more easily identify which vehicles on dealer lots are the cleanest and most fuel-efficient. The DEP, the Maine Auto Dealers Association and the NRCM developed the program in partnership.
In model year 2001, though, Maine upped the ante by switching to California's standards for vehicle emissions. As DEP's Severance explains, California's standards for roughly 40 years have generally been more progressive and aggressive than those drafted by the feds. Because Washington, D.C., is usually playing "catch up" with California, as Severance puts it, the federal government decided to let individual states choose which standards they would abide by.
"The car manufacturers build cars to both specifications," Severance says. "The 1990 amendments to the federal Clean Air Act say that states can adopt California's standards, but only if they adopt the identical program, with no deviations. After all, you don't want every state setting its own personal standards. That would be a patchwork nightmare."
As a result, Maine's cleaner car law also matches California law. The Maine law originally called for automobile dealers to sell six percent PZEVs and roughly two percent each of ZEVs and hybrids by the 2009 model year. However, because there are hardly any true ZEVs in the marketplace, the rules were modified to allow dealers to sell hybrids instead of ZEVs. Every two model years, Severance says, the hybrid portion that dealers must sell goes up by one percentage point, while the PZEV requirement remains six percent, until a total sales goal of 16% ZEV/hybrid/ PZEV is met.
"Already, more than 27 gasoline-powered car, truck and SUV models meet these emission standards," Sue Jones, energy project director for the NRCM, said in a press release when the bill was signed. "In addition, four models now meet the hybrid standards, with many more models on the way in the next few years."
Severance says that one of the beauties of the program is that there is already high consumer demand for hybrids in Maine, with waiting lists as long as three months, down from 18 months in the past. And, he says, when it comes to PZEVs, most consumers can't distinguish them from standard vehicles, since the prices are comparable and, at least on the surface, they operate the same way.
Demanding too much?
With some exceptions, auto dealers in the state see things a bit differently. Tom Brown, president of the Maine Auto Dealers Association, has said in the past that the burden shouldn't be placed on the people who sell cars because it's the people who buy them who do the choosing. (Brown did not respond to requests for an interview for this story.)
The auto dealers have a point, says Jonathan Rubin, interim director of the Margaret Chase Smith Center for Public Policy at the University of Maine, who for years has been conducting research on fuel consumption, air quality and consumer interest as they relate to vehicles.
"Consumers want to buy 'green' vehicles and feel good about it, but that often falls below concerns like safety, look, style and needs," Rubin says. "On the other hand, setting environmental standards is an important way to help consumers buy green."
In his testimony against the cleaner car law, Brown of the Maine Auto Dealers Association questioned whether dealers can meet the new standards in a state that favors larger, less fuel-efficient vehicles. As he and various dealers noted, six out of 10 vehicles Mainers now drive are trucks, minivans or SUVs.
The NCRM's Jones doesn't have much sympathy for auto dealers, though. She believes that pressure must be put on them to ensure that a greater number of low-emission vehicles are designed and manufactured. "If [consumers] know they have a choice between different engine configurations in one model, more often than not they will prefer the more efficient one," she said in a recent interview.
Jones is not without support in the dealer realm, either. Adam Lee, president of Lee Auto Malls ˆ one of the state's largest dealers ˆ testified in favor of the cleaner car law.
Ira Rosenberg, owner of the Prime Motor Group, which operates Toyota, Hyundai, Nissan and Mercedes dealerships, mostly in York County, has a more wait-and-see approach on the whole issue.
"There has been a lot of interest in these types of vehicles from what I've seen in my own business here in Maine," says Rosenberg. "But as for where the market might go and what effect the new rules about selling a certain percentage of these cars might have on my business, it's too early to say. I do know that the car manufacturers are out there to fill a demand, and the car dealers are too, and we respond to the market."
Consider the statistics: Part or all of eight counties in Maine received designation of "nonattainment" for the eight-hour ozone standard in 2004 by the U.S. Environmental Protection Agency. Or, as the Environment Maine Research and Policy Center puts it, half of Maine's counties are out of compliance with air quality standards for smog as outlined in the federal Clean Air Act.
In addition, Maine has the highest childhood asthma rate in New England, according to the Natural Resources Council of Maine. The incidence of asthma is exacerbated by pollution ˆ and the 1.1 million registered cars and trucks in Maine cause most of the air pollution here, according to the NCRM.
The state of Maine and various environmental interest groups think the answer ˆ or at least the start of an answer ˆ to the state's dirty skies can be found in a new "cleaner car law" signed on May 31 by Gov. John Baldacci. The law aims to get more low-emission vehicles on the road, in order to replace older, higher emission vehicles.
Under the new rules, beginning with model year 2009, which starts in calendar year 2008, 11% of all vehicles sold in the state will have to be the "cleanest of the clean," according to Ron Severance, director of program planning for the Bureau of Air Quality at Maine's Department of Environmental Protection. "That means a combination of true zero-emission vehicles, as well as hybrid vehicles and super-low-emission vehicles, otherwise known as partial zero-emission vehicles." (See "Alphabet soup" on p. 30 for more on what these terms mean.)
However, automobile dealers aren't necessarily convinced this is the right approach. While it's one thing to require that vehicles be manufactured to certain emission specifications before they ever get shipped to a car lot, say many dealers, it's quite another to put the burden on those who sell the cars. After all, they say, they don't control consumer tastes, and they cannot force people to buy something at a certain rate. And none of them wants to have vehicles on the lot that might not sell.
The road back to California
How Maine got to the cleaner car law is a story that begins in 1999, but really goes back to the 1960s and the state of California. November 1999 marked the start of Cleaner Cars for Maine, a consumer labeling program that helps car shoppers more easily identify which vehicles on dealer lots are the cleanest and most fuel-efficient. The DEP, the Maine Auto Dealers Association and the NRCM developed the program in partnership.
In model year 2001, though, Maine upped the ante by switching to California's standards for vehicle emissions. As DEP's Severance explains, California's standards for roughly 40 years have generally been more progressive and aggressive than those drafted by the feds. Because Washington, D.C., is usually playing "catch up" with California, as Severance puts it, the federal government decided to let individual states choose which standards they would abide by.
"The car manufacturers build cars to both specifications," Severance says. "The 1990 amendments to the federal Clean Air Act say that states can adopt California's standards, but only if they adopt the identical program, with no deviations. After all, you don't want every state setting its own personal standards. That would be a patchwork nightmare."
As a result, Maine's cleaner car law also matches California law. The Maine law originally called for automobile dealers to sell six percent PZEVs and roughly two percent each of ZEVs and hybrids by the 2009 model year. However, because there are hardly any true ZEVs in the marketplace, the rules were modified to allow dealers to sell hybrids instead of ZEVs. Every two model years, Severance says, the hybrid portion that dealers must sell goes up by one percentage point, while the PZEV requirement remains six percent, until a total sales goal of 16% ZEV/hybrid/ PZEV is met.
"Already, more than 27 gasoline-powered car, truck and SUV models meet these emission standards," Sue Jones, energy project director for the NRCM, said in a press release when the bill was signed. "In addition, four models now meet the hybrid standards, with many more models on the way in the next few years."
Severance says that one of the beauties of the program is that there is already high consumer demand for hybrids in Maine, with waiting lists as long as three months, down from 18 months in the past. And, he says, when it comes to PZEVs, most consumers can't distinguish them from standard vehicles, since the prices are comparable and, at least on the surface, they operate the same way.
Demanding too much?
With some exceptions, auto dealers in the state see things a bit differently. Tom Brown, president of the Maine Auto Dealers Association, has said in the past that the burden shouldn't be placed on the people who sell cars because it's the people who buy them who do the choosing. (Brown did not respond to requests for an interview for this story.)
The auto dealers have a point, says Jonathan Rubin, interim director of the Margaret Chase Smith Center for Public Policy at the University of Maine, who for years has been conducting research on fuel consumption, air quality and consumer interest as they relate to vehicles.
"Consumers want to buy 'green' vehicles and feel good about it, but that often falls below concerns like safety, look, style and needs," Rubin says. "On the other hand, setting environmental standards is an important way to help consumers buy green."
In his testimony against the cleaner car law, Brown of the Maine Auto Dealers Association questioned whether dealers can meet the new standards in a state that favors larger, less fuel-efficient vehicles. As he and various dealers noted, six out of 10 vehicles Mainers now drive are trucks, minivans or SUVs.
The NCRM's Jones doesn't have much sympathy for auto dealers, though. She believes that pressure must be put on them to ensure that a greater number of low-emission vehicles are designed and manufactured. "If [consumers] know they have a choice between different engine configurations in one model, more often than not they will prefer the more efficient one," she said in a recent interview.
Jones is not without support in the dealer realm, either. Adam Lee, president of Lee Auto Malls ˆ one of the state's largest dealers ˆ testified in favor of the cleaner car law.
Ira Rosenberg, owner of the Prime Motor Group, which operates Toyota, Hyundai, Nissan and Mercedes dealerships, mostly in York County, has a more wait-and-see approach on the whole issue.
"There has been a lot of interest in these types of vehicles from what I've seen in my own business here in Maine," says Rosenberg. "But as for where the market might go and what effect the new rules about selling a certain percentage of these cars might have on my business, it's too early to say. I do know that the car manufacturers are out there to fill a demand, and the car dealers are too, and we respond to the market."
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