Bloomberg News, June 1, 2017
With President Donald Trump’s withdrawal from the Paris climate pact, the leader of the U.S. state with the strictest clean-car rules is turning toward Beijing in his longtime mission to stem automotive pollution.
California Gov. Jerry Brown departed Friday for China, where he’ll urge the world’s most populous country and largest car market to take environmental cues from Sacramento, not the U.S. capital.
Brown — an anti-smog crusader since a previous term as governor starting in 1975 — is now 79 with less than two years left to serve. His gambit in China could create an environmental legacy beyond what he could hope to accomplish in California itself.
“There’s so much propaganda and outright climate denial in Washington,” Brown, a Democrat who attempted runs at the U.S. presidency in three different decades, said in an interview last week.
The trip to China is a way “to forge agreements that will counteract the misguided Republican efforts in Washington.”
Trump’s decision to dump the Paris accord, announced Thursday at the White House, is “an insane move,” Brown said on a conference call shortly afterward. “California will resist.”
In China, Brown will spread the gospel of California’s auto policies, including a state rule requiring an increase in annual sales of zero-emission vehicles powered by batteries or hydrogen. The Chinese government is weighing a similar requirement for automakers competing in the world’s largest vehicle market.
It’s a different story in Washington, where the Trump administration is revisiting stringent vehicle greenhouse gas and fuel mileage standards for 2022-25 following pleas from the auto industry. The rules, enacted by Trump predecessor Barack Obama, would boost the fuel economy of new cars and light trucks to an average of about 50.8 miles per gallon by 2025, up from 30.3 mpg this year.
The pullout from the Paris accord, which Trump called a “massive redistribution of United States wealth,” won’t have a direct effect on the reexamination of the automotive standards. The decision leaves the tailpipe and fuel economy regulations as the lone Obama-era climate initiative that remains largely intact and creates a leadership void that China appears ready to fill.
“China has been working very hard to try and replace the U.S. as the world leader in a number of areas,” said Yunshi Wang, director of the China Center for Energy and Transportation. Trump’s abandonment of the Paris accord, Wang said, “is obviously a big opportunity from the Chinese perspective.”
Under rules that could be implemented next year, a manufacturer selling 100,000 cars and trucks in China would need to sell about 2,500 battery-powered vehicles with a 200-mile range, said Wang, whose center is part of the Institute of Transportation Studies at the University of California Davis. Other compliance options include buying credits from competitors — as with the California rules that China is using as a model — or reducing sales of gasoline-powered cars, he said. California is also helping China develop a cap-and-trade system to limit carbon dioxide emissions from heavy industry and other sectors of the economy.
Zero-emission vehicles could help China with its national-security interest in reducing oil imports, Wang said. In addition, Chinese automakers now see ZEVs as a chance to finally export large numbers of cars and trucks.
“It is good industrial logic to develop products in and for the largest market,” said Bill Russo, managing director of Gao Feng Advisory Co. and a former head of Fiat Chrysler Automobiles NV’s Chrysler unit in China. “The U.S. move, together with China’s push, will serve to put China in the position to lead the commercialization of new energy vehicle technologies.”
Some automakers are pressing the government for more time to meet the targets, Wang said. But they also appreciate California’s involvement, since it provides a legal template that they themselves helped developed through long years of legal sparring with the state’s Air Resources Board. Mary Nichols, the board’s chairperson, is scheduled to join Brown on the week-long trip.
Volkswagen AG aims to sell 1.5 million units of zero-emission or plug-in cars in China by 2025 with most of them locally produced, while General Motors Co. is targeting 150,000 units in the same time frame under its Buick, Chevrolet and Cadillac brands.
Wang predicted that by 2025, 10 percent to 20 percent of China’s vehicle sales could come from battery-powered cars or plug-in hybrids. Last year, Chinese consumers purchased 507,000 such vehicles, or more than three times as many as in the U.S.
“China is the world’s largest single market for electric vehicles today,” said Roland Hwang, director of the transportation program at the Natural Resources Defense Council, an environmental advocacy group. A California-like electric car sales mandate “in China will kick the whole global electric vehicle market into even higher gear,” he said.
Brown has vowed to fight attempts by the Trump administration to undermine the state’s stringent auto rules and to go to court if there’s a challenge to California’s 47-year-old permission to enact clean-air rules that are tougher than U.S. standards.
In the interview, Brown accused the U.S. auto industry of backing Trump, saying it hasn’t changed much since General Motors claimed in 1973 that it would go bankrupt if California forced the installation of catalytic converters.
“The leopard is not going to change its spots,” Brown said. “We have to remain vigilant.”
In separate statements, GM and Ford Motor Co. signaled that the Paris withdrawal may do little to sway their plans for current and future electric vehicles. Though neither addressed The pullout directly, Ford said climate change is real and GM said “international agreements aside, we remain committed to creating a better environment.”
Brown’s opposition to Trump’s policies could have political ramifications at home. “Climate change could be a unifying issue that pulls the Democratic Party together if the 2018 midterm elections become a referendum on Trump,” said Alan Baum, an independent auto analyst in Bloomfield Township, Mich.