Thank you.
I did bring about 25 or 30 copies of my brief submission. I'll just highlight some key points rather than taking a lot of time.
I did want to make the point that this file on vehicle fuel efficiency is one Pollution Probe has worked on for at least a decade, but intensively in the last two to three years in particular.
I have three key points to make, and I'll make them up front and then give some information behind them. The first is that Canada should be joining leading nations in the design and implementation of a mandatory vehicle fuel efficiency standard. And I do mean mandatory, not a voluntary one. We can talk about that.
We need a design process to do this right. It should not be a lengthy design process. We believe we could do it within 12 to 18 months and gazette a standard by 2008 in order to apply it to the expiry of the auto sector MOU that currently exists, which would mean the 2011 model year.
Finally, we agree with what I've just heard from Mark on the need for the Canadian public to be massively engaged and educated on this topic, both leading through the design of a standard and into its implementation. The consumer plays a very strong role in making this market move.
I don't need to remind committee members here, of course, about the seriousness of the problem, given the recent release of the Intergovernmental Panel on Climate Change report and the economic issues outlined by the Stern report, so I'm not going to touch on any of that. I'm going to deal instead with improving motor vehicle fuel efficiency, which we at Pollution Probe think is an opportunity.
We don't think there is any doubt that the technology exists to significantly improve upon fuel efficiency levels while maintaining essential vehicle attributes that people value. This technology is constantly improving, and we think it will present even greater opportunities in the future.
The first point is that there are no technical barriers to improving motor vehicle fuel efficiency. We have sent to every member of Parliament a copy of our 2005 report on vehicle fuel efficiency standards for Canada. We don't think there really are technical barriers to accomplishing this job.
We also think the public is ready for fuel efficiency standards. We can certainly cite various polls, like the Strategic Counsel survey for The Globe and Mail, the Decima Research poll, the Léger Marketing poll, and so on. Canadians believe government regulations are needed to increase vehicle fuel efficiency levels, and in at least one poll they're putting this measure at the top of their list of measures to deal with climate change.
Past experience with vehicle fuel efficiency standards in the U.S. can be drawn upon, as can some efforts internationally. Again, members may be aware that the oil price shocks of the early 1970s led to the U.S. corporate average fuel economy standards, which really went to a doubling of passenger fuel economy levels between 1975 and 1985. A 2002 report by the National Academy of Sciences in the U.S. estimated that 2.8 million barrels of gasoline per day have been saved due to the CAFE standards, relative to what might have occurred in their absence. That translates into roughly 100 megatons of carbon dioxide. The academy also calculated the cumulative benefits of the CAFE to be in the range of U.S. $40 billion to $80 billion, and also found no evidence that the standards had a significant impact on employment levels in the industry.
Of course, in the United States and, paralleling that, in Canada, fuel economy levels failed to increase significantly across the passenger car fleets after the CAFE standards effectively topped out in 1985. The Environmental Protection Agency in the U.S. projects that the 2006 model year fleet of cars and trucks combined will be the heaviest, fastest, and most powerful on record, but no improvement in fuel economy levels is expected over the 2005 model year, despite rising gasoline prices. The 2006 fleet is projected to be 4% less fuel efficient than the fleet of twenty years earlier. Canada, of course, does not have a regulated standard but does track somewhat the U.S. trends.
Outside of North America, other nations are taking significant steps to improve fuel efficiency levels and reduce greenhouse gas emissions. In Europe, there's a voluntary commitment by automakers to reduce greenhouse gas emissions by approximately 25% by 2008. While some automakers are on track, many are not, and the industry as a whole is expected to fall short of the voluntary commitment, so the European Commission is seriously considering a mandatory target for 2012.
In Japan, automakers are ahead of schedule in meeting a 2010 commitment to reduce fuel consumption by approximately 23%. A second round of reduction targets is being finalized now, and it is expected to require reduction in fuel consumption levels of an additional 23.5% by 2015.
So this gives us a sense of scale of what's going on out there.
China is implementing a range of measures. Australia has made some progress toward fuel consumption reduction. In California, of course, we know the standards have been set to reduce new vehicle fleet emissions by approximately 30% by 2016, with ten states preparing to follow California if those standards come into effect.
The actual costs of meeting regulations have been studied in the past, environmental regulations in general and auto sector in particular. I quote a U.S. Natural Resources Defense Council report that found that “the auto industry and its allies have overestimated the actual costs” of meeting standards “by a factor of about 2 to 10 times the actual costs”, while regulators have historically overestimated costs by as much as two times.
As I said in the beginning, Pollution Probe recommends that a world-class fuel efficiency standard should be designed for Canada over the next 12 to 18 months. “World-class” means benchmarking against the leaders out there. California's is not the most aggressive standard in the world, but it is one benchmark that's worth careful consideration, and there are others.
We believe the standard should be gazetted by 2008, to have legal effect for the 2011 model year. In agreement with some of the words that Mark put forth, we think a parallel suite of complementary measures should be developed to help Canada achieve the standard and provide for further reductions in levels. And by “complementary measures”, we mean such things as fuel efficiency labelling; consumer information and awareness programs; retirement programs to accelerate the replacement of older, more-polluting vehicles; incentives and measures to pull cleaner technologies into the market; and support for research and development on new cleaner automotive technologies.
In other words, the standard doesn't just stand by itself. It as to be attuned to the Canadian market and to Canadian circumstance and opportunities, but it should be forward looking, not defensive. It shouldn't be just trying to parallel what the U.S. federal government has recently announced. We should look at our own interests, look at our opportunities and get the most economic and social benefits out of the standard, but definitely work toward a very clear leadership position on a standard.
Right now, Canada has an obligation to do this, to share its expertise, and to put into effect a really good standard. Leadership by governments is something the public is demanding now, we believe, and we think the public is going to be in a position where they want to see hard numbers and hard targets, not general discussions on where we should be going. We urge all parties to come to some agreement as part of this process on the need for a standard and on some targets and timelines.
Thank you.