New Report: Minnesota Clean Car Act Good for Minnesota’s Economy

Environment Minnesota

Minneapolis, MN – The Minnesota Clean Car Act (H.R. 690 and S.F. 674), a bill that would direct Minnesota to adopt a stricter set of tailpipe emission standards for air toxics and greenhouse gases from cars, light-duty trucks and SUVs in Minnesota, was introduced to the 2009 Legislature on February 12, 2009 by Representative Melissa Hortman of Brooklyn Park and Senator John Marty of Roseville.
 
Automakers, their trade associations and others argue that the adoption of these standards would have a negative economic impact on the state, and reduce vehicle choice.
 
“Auto industry lobbyists are concerned about protecting their interests, not the interests of everyday Minnesotans,” said Monique Sullivan, Advocate for Environment Minnesota.  “The squeeze on our pocketbooks created by the failing economy, the smog and soot that threaten our health, the looming threat of global warming – these are some of Minnesota’s more urgent problems.  The Minnesota Clean Car Act is a win-win-win move that can take us one step closer to solving all of three of these problems.”
 
Today, Environment Minnesota released a new report: “Dollars and Sense: The Economic Impacts of Bringing Clean Cars, Light-Duty Trucks and SUVs to Minnesota.”  The new report looks at the economic impacts of adopting these standards in Minnesota, and concludes that in addition to reducing the pollution that threatens our special places and our health, these clean vehicle standards will also provide a net economic benefit to Minnesota, while preserving consumer choice.
 
“The Minnesota Clean Car Act would reduce greenhouse gas emissions, cut smog and soot – all while helping consumers save money at the gas pump.” added Senator Marty.  “Given the harsh economy that Minnesota’s families are weathering, this alone is reason to adopt this important legislation.”
 
“The Minnesota Clean Car Act will save Minnesotans money on fuel.” said Representative Hortman. “If for no other reason than that, in these tough economic times, this is a step state leaders should take as soon as possible.”
 
Vehicles that meet the standards outlined in the Clean Car Act will be more fuel-efficient, leading to real savings at the pump for consumers.  Environment Minnesota’s new report finds that, in addition to seeing more significant cuts in pollution, Minnesota consumers would also see significantly greater savings under these stricter standards than under existing federal standards.
 

• At prices of $1.74 per gallon, Minnesota drivers would spend $1.4 billion less on gasoline between now and 2020.

• If gas prices return to $3.00 per gallon the savings would be even more significant – Minnesota drivers would spend $2.4 billion less on gasoline between now and 2020.

• Starting in 2020, drivers in 5 Minnesota counties would annually save $10 million or more at the pump. These counties are Washington County, Anoka County, Dakota County, Ramsey County and Hennepin County.

• Drivers in 49 of Minnesota counties would save more than $1 million per year at the gas pump under the clean vehicle standards.

 
While vehicles that comply with these standards are projected to cost about a $1,000 more as a result of incorporated technology, Environment Minnesota’s new report underscores that these vehicles are a good deal for Minnesota’s drivers.

• Under the program, a consumer who buys a new car, light-duty truck or SUV at full phase-in will see a net savings of between $210 and $420 during the life of a five year loan, assuming $1.74/gallon gasoline, with lower spending on gasoline outweighing the higher costs of his or her auto loan.  After the loan is paid off, a consumer can expect to save between $285 and $325 per year, with a payback period of 3.7 to 4.3 years.  If gasoline returns to $3+/gallon price levels, which many expect, savings will be higher yet, and payback periods even shorter.

The report also looked at the economic impacts of these standards on manufacturers and dealers, the potential savings in health care costs and the potential savings achieved by cutting the costs associated with future global warming mitigation efforts.  The report also looked at the availability of vehicle models, including diesel and flex-fuel vehicles, concluding that the Minnesota Clean Car Act would result in a net economic gain for Minnesota, while preserving consumer choice.
 
The Senate version of the Minnesota Clean Car Act is scheduled to receive a it’s first Senate Committee hearing today, in the Energy, Utilities, Technology and Communications Committee, Chaired by Senator Yvonne Prettner Solon of Duluth.
 
“The Clean Cars Bill has been adopted by 14 other states,” said Senator Prettner Solon. We’re following a proven trend and not exactly forging new ground. This just makes good policy sense.”

Environment Minnesota is a statewide, citizen-based environmental advocacy group representing nearly 8,000 Minnesotans statewide (www.environmentminnesota.org).  Environment Minnesota is a member of the Clean Energy Minnesota coalition.
 
The full report is available at the Environment Minnesota website, or upon request from the author.
 
The issue is also a 2009 legislative priority for the Minnesota Environmental Partnership, a coalition of more than 80 nonprofit conservation and environmental organizations representing 450,000 Minnesotans, committed to protecting Minnesota’s lakes, rivers and streams and great outdoors.