to limit emissions of carbon dioxide and other greenhouse gases, broad-based economic incentives are greatly superior to "command and control" regulations because they can achieve greater reductions in CO2 emissions, and do so in a more cost effective fashion. Conclusion The 1970's and 1980's were a time of extraordinary challenge and change for the U.S. motor vehicle industry requiring tens of billions of dollars of investment and restructuring in order to respond to tough and often conflicting requirements to meet the nation's emissions, safety and fuel economy goals. The 1990's present no less a challenge with the industry faced with dozens of new Federal and California Clean Air Act requirements including a "zero" emission standard and the introduction of alternative fuel vehicles of uncertain market acceptability, plus the implementation of side impact protection and other car and light truck safety improvements. The auto industry financial balance sheet for 1990 demonstrated once again what a sudden loss in consumer confidence in an uncertain world can do to efforts to bring new products to market. (See Table X, XI) A viable national energy strategy must, therefore, be economically feasible as well as technologically possible. Motor vehicles will continue to be, undoubtedly, an important part of such a strategy, but, just as clearly, they can not be the whole strategy as has been largely true of past efforts to formulate a national energy policy. Ultimately, of course, it is the public, not the government or the manufacturers, that will decide what kind of products and policies are acceptable and workable. In the near term, several relatively simple steps, such as keeping tires properly inflated, investing in vehicle tune-ups and maintenance, using mass transit and car pools where possible, obeying speed limits, and using the most fuel economical vehicle available to accomplish a task, can help reduce U.S. oil consumption now. Finally, to sum up, Mr. Chairman, let me say that the auto industry in this country is a "can do" industry. The record is clear. Since 1974, the average fuel economy of the cars has increased by over 100%. In contrast to 1974, more than 1/3 of all car models offered for sale in the U.S. had EPA city/highway ratings of at least 30 mpg and there are a number of cars on sale that are in the range of 40-50 mpg or higher. Our manufacturers have done this while they have reduced emissions by 96% in the case of hydrocarbons and carbon monoxide and 76% for oxides of nitrogen. And they are now embarked on the daunting task of meeting both in their cars and in their plants, the extremely complex requirements of the new 800-page Clean Air Act amendments which will require reductions of vehicle emissions to as near zero as can be measured. Add to this, the addition of air bags most cars will have them within the next which means all-new and and the need to eliminate chlorofluorocarbons few years - and the need to meet many new safety standards. At the same time, our companies are cooperating with state agencies in California and elsewhere on test fleets using alternative fuels. They are working with the U.S. government in a consortium to improve battery technology for electric cars. They are working with the federal and state agencies on the development of intelligent vehiclehighway systems to cut waste of energy and reduce pollutants caused by traffic congestion. This is a can-do industry and it is getting the job done. MVMA appreciates the opportunity to present this statement. TABLE! Since 1973, when it stood at 35%, the level of U.S. oil imports has fluctuated. For the first half of 1990. the U.S. oil import level was 45.3%, even though new car CAFE performance has been improved 100%. TABLE II The average number of miles traveled each year by a passenger car reflects changes in the price of gasoline, as indicated in the table below. This was particularly evident during the "oil shocks of 1973-74 and 1979-80 and after OPEC cut the price of crude oil in half in 1986. THE EFFECT OF GASOLINE PRICE Annual Average Passenger Vehicle Miles Traveled Cents Per Gallon (In1989 Economics) 200 ACTUAL NEW CAR 10,500 The graph above clearly shows that the price of gasoline significantly affects the number of miles traveled (VMT) and thus the amount of fuel consumed. Vehicle fuel economy is also affected by gasoline prices and can help reduce gasoline consumption. In recent years, the growth in VMT has more than offset the improvements being made in fuel economy. TABLE III Public interest in greater fuel efficiency peaks at times of rising fuel prices and decreasing or uncertain fuel availability. During the "oil shock" of 1979-80. for example, people reduced their driving and bought proportionately greater numbers of smaller, higher mileage cars. Since the mid-1980s. as gasoline prices moderated and actually declined in real terms, sales of larger, higher performance cars increased. This market shift resulted in overall CAFE performance leveling off. |