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Automakers, UAW want green credits to fund industry upgrades

Neil Roland

Automotive News | April 24, 2009 – 4:15 pm EST


Automakers, UAW want green credits to fund industry upgrades

Gore says failure to pass ‘would be awful to contemplate’

WASHINGTON — Federal revenue from a cap-and-trade program in the draft climate-change legislation should be used to develop environment-friendly vehicles, automakers and the UAW said told Congress today.

Dave McCurdy, head of the Alliance of Automobile Manufacturers, urged lawmakers to use revenue “to help fund research, development and implementation of new technologies and upgrading/retooling of manufacturing facilities to provide the next generation of green vehicles.”

He told the House Energy and Commerce Committee, which is considering the bill, that at least 5 percent of revenue should be used specifically for development of light-duty vehicles.

Alan Reuther, the UAW’s legislative director, said revenue also should go to help automakers meet existing fuel-economy standards and any tougher guidelines that may emerge from the legislation.

“Because of their current precarious financial situation, the Detroit-based auto companies simply do not have the resources to make the up-front investments,” he said.

Reuther also called for at least $25 billion of anticipated cap-and-trade revenue to be used to retool factories to produce plug-in electric vehicles.

The draft bill, sponsored by committee chairman Henry Waxman, D-Calif., and Ed Markey, D-Mass., seeks to promote clean electric vehicles, low-carbon transportation fuels and renewable sources of energy in an attempt to reduce dependence on foreign oil and moderate climate change.

A cap-and-trade plan would set limits on greenhouse gas emissions from utilities, industrial plants and oil companies. It would let companies trade allowances to pollute.

The draft bill does not say how many allowances the government would give away and how many it would auction, or what it would do with the proceeds of any auction.

President Barack Obama’s budget proposal estimated that auctions could generate at least $65 billion a year.

It’s this void in the draft bill that automakers and the union were trying to fill with their recommendations today.

Waxman has said he wants to complete preparation of the bill and have a committee vote by Memorial Day. Senate Commerce Committee Chairman Barbara Boxer also may introduce legislation.

Gore testifies

Later today, global warming activist Al Gore on Friday urged passage of the bill, saying failure to pass legislation could cause the collapse of world climate negotiations.

Gore, the former U.S. vice president and star of the Oscar-winning documentary film “An Inconvenient Truth,” told members of the House Energy and Commerce Committee that passing a climate law is a “moral imperative” that will affect U.S. standing in the world community.

“Once we find the moral courage to take on this issue, the rest of the world will come along," Gore said. "Now is the time to act before the world gathers in Copenhagen this December to solve the crisis. Not next year, this year.”

He said that the passage of this bill would be met with "a sigh of relief" at the Copenhagen meeting aimed at crafting a follow-up agreement to the carbon-capping Kyoto Protocol.

If it fails to pass, Gore said, “I think that would be awful to contemplate.”

GOP concerns

The 648-page draft bill has generated concern among Republicans as well as some Rust Belt and southern Democrats worried about its potential impact on corporate costs, jobs and the economy.

Rep. Joe Barton, R-Texas, led that charge today, scoffing at former vice president Al Gore’s scientific assertions about the impact of manmade pollution on global warming.

Former House speaker Newt Gingrich, a Georgia Republican, said a cap-and-trade plan would increase electric bills. Instead, he called for automakers to use refundable tax credits to develop new-generation vehicles.

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