A team of researchers from the University of California completed a comprehensive study to assess the potential design, implementation, and benefits of a feebate program in California as well as possible stakeholder responses. This interim document summarizes the study’s key findings. A forthcoming project final report will include a more detailed presentation of results, and complete documentation on modeling and analysis tools, study methods, and limitations.

Feebates are a market-based policy for reducing emissions from passenger vehicles. A one-time fee is levied on relatively high-emitting vehicles when they are sold new. These funds are used to provide rebates for lower-emitting vehicles when they are sold new. As required in the scoping plan for the state’s climate change law, AB 32, ARB undertook this comprehensive study to consider measures that could be used as alternatives or complements to direct regulation of greenhouse gas emissions from new passenger vehicles.

The research team developed manufacturer and consumer models with unprecedented level of detail, accounting for vehicle redesign schedules, differences in automakers’ individual product offerings, California-specific consumer preferences, and concurrent performance-based light-duty vehicle GHG emissions standards. More than 50 distinct scenarios were developed. The UC Davis team led the modeling effort and the UC Berkeley team conducted consumer focus groups and a statewide survey.

Read the entire research report here (Pdf file).

Here is the original poop on the Feebates Research contract.

AB 32 specifically states that if the Pavley regulations do not remainin effect, ARB shall implement alternative regulations to control mobile sources to achieve equivalent or greater reductions of
greenhouse gas emissions (HSC §38590). ARB is currently evaluating the use of a feebate program as the mechanism to secure these reductions, should that be necessary. A feebate regulation would combine a rebate program for low-emitting new vehicles with a fee program for high-emitting new vehicles. This program would be designed in a way to generate equivalent or greater cumulative reductions of greenhouse gas emissions compared to what would have been achieved under the Pavley regulations.

As described in the Scoping Plan (VolumeI, p. C-61), ARB is commissioning a study to analyze the benefits from the implementation of a feebate program for new vehicles in California, both in place of
and in addition to the Pavley standards.  The study will assess elements of program design including fee and rebate levels, point of regulation, implementation strategy, consumer response, and interaction with other AB 32 programs. 

Based on standard research contract processes, ARB issued a research solicitation to University of California and California State University researchers for pre-proposals to analyze the potential
design and benefits of a feebate program for California.  Through this solicitation process, the team from the Institute of Transportation at University of California, Davis, led by Dr. David
Greene and Prof. David Bunch, in collaboration with researchers from University of California, Berkeley and Irvine campuses was selected todevelop a full proposal for funding. 

The full proposal was reviewed by the Research Screening Committee (RSC) at their November 2008 meeting and approved by the Board in December 2008.  Work on the contract began in January
2009.  The research team released an Interim Statement of Findings with preliminary study highlights in May 2010.  A final report with complete documentation of methodology and results will be
delivered to ARB later in 2010 for formal review by the RSC.

Now, this stuff is scary. California Big Government spends countless funds trying to manipulate the free market again – in other words increase taxes to further an ideological goal – climate change.

And, American automakers are not sitting still.

From the press release:

Automakers responded to California’s proposed car “feebate” tax today by saying this is not the time for another government program that will put consumers further in debt or drive up thegovernment deficit.  The program of feebate taxes being considered by California has proved to be costly to consumers in both Canada and France.

“Since automakers are investing heavily in more fuel-efficient autos, we want to put more of them on the road….to improve the environment, to reduce our dependence on foreign oil and to strengthen our bottom line.  But a feebate tax is not the way to do it,” said Dave McCurdy, president & CEO, Alliance.  “Experience in France and Canada shows that feebate taxes raise costs to consumer one way or another, either through an extra feepaid when buying a new car or through higher income taxes to fund the program.”

 Automaker arguments against the Climate Change Car Tax – I mean the FREEBATE.

• Consumers understand that feebates are taxes.  Feebate proposals have been discussed since 1989 and there is a reason they are rarelyadopted:  in other countries, feebates have become just another source of revenue for the government or a reason to raise taxes.  Canada started a feebate program in 2007, and within two years, Canada ended the consumer rebates, or subsidies, but kept the consumer fees, or taxes.  In France, taxpayers are subsidizing the feebate
  program.  Rebates are exceeding fees paid, so the French program cost taxpayers 600,000 Euros in 2009 (or about $800 million).

• There already is a nationwide program.  In April, EPA and NHTSA finalized a new multi-year national standard to reduce carbon dioxide(CO2) and fuel use through 2016.  Just last week, on May 21, automakers joined federal policymakers at the White House to launch the next phase of coordinated NHTSA and EPA regulations to address fuel economy and greenhouse gas emissions through 2025.  Sincethere is a new national mileage/CO2 standard for autos, the proposed state feebate represents another layer of government regulations on top of existinggovernment regulations.
  

•   The feebate will have unintended consequences.  Many consumers feel there are already too many additional costs and government fees when buying a new vehicle.  If the government imposes these fees on new cars, consumers will either hold on to their older (less efficient) cars longer, or choose to buy a used vehicle to avoid the extra tax.       

• A feebate always ends up penalizing somebody unfairly. If the government determines who gets rebates and who pays fees by vehicle size, there is an extra tax burden on farmers, tradesmen, small business and large families who depend on these vehicles.  If the government decides who wins and who loses by picking the best and worst performers in each vehicle class, then there will be a situation where a small car will carry a fee while apickup truck generates a rebate.

I think Meg Whitman and Carly Fiorina will both pick up on this program and the potential for increasing the price of automobiles – and for what? Global Warming and Al Gore hysteria?

The State of California has NO business messing around here. The Democrat dominated Legislature and RINO Hollywood Governor have enough problems balancing their own budgets and not messing around with the automobile markets.