"Car Talk": An Autopsy

Car Talk was the Clinton administration's 1994–1995 effort to achieve consensus on how to reduce America's greenhouse gas emissions from passenger cars and light-duty trucks. Specifically, the objective was to find the most cost-effective policies that, if adopted, would return emissions to 1990 levels by the years 2005, 2010, and 2025 and keep them there. The Car Talk Advisory Committee consisted of individuals whose activities ran the gamut from environmental and public interest advocacy to the manufacture of motor vehicles and gasoline. The idea was that the deliberations of these representatives of competing interests would lead to a consensus on policies that could be recommended to the President to achieve the 1990 emissions "return" objective. That never happened. As one of thirty members of the Car Talk Advisory Committee, I was there to witness the eventual crash.

A cautionary tale

Was Car Talk destined to fail? I don't think so. To succeed, however, certain elements would have had to have been present that were not, such as an atmosphere conducive to risk-taking. To get individuals who have fought each other for a quarter of a century to risk abandoning old positions and cooperate inevitably takes a great deal of hard work. If properly organized and structured, processes like Car Talk offer hope for easing the highly confrontational and legalistic approach the country has been taking to deal with some of its most controversial public policy issues. It is because I wish to see efforts like Car Talk succeed in the future that I have set out here the story of how we maneuvered our way along what was always a rocky road until we finally reached our impasse. I have chosen to characterize my account as an "autopsy" because I hope we can learn from what went wrong, just as we would from the critical evaluation contained in a coroner's post-mortem.

On the rocky road to gridlock

Unfortunately, this volatile issue of fuel economy standards was the major roadblock for Car Talk participants. Not only was this impasse frustrating, it was ironic. Car Talk's Analytical Support Group, which consisted of analysts from various federal agencies chaired by a representative of the President's Council of Economic Advisers, was tasked with identifying the factors involved in reducing emissions as well as the magnitude of the changes required to achieve a return to 1990 levels in the years specified. The group made a strong case that it would not be possible to achieve this return merely by increasing new motor vehicle fuel economy. Other policies, either in addition to or substituting for fuel economy standards, would be necessary. These alternatives included policies to reduce vehicle miles traveled and to encourage the use of lower carbon content fuels.

Perhaps our failure is not so surprising, considering the legacy with which Car Talk was stuck. Legislation establishing the federal government's program to regulate new light vehicle fleet fuel economy was enacted in the 1970s when energy prices in the United States were controlled at below-world levels. Many were also predicting that the world would soon "run out" of petroleum. At the time, CAFE standards seemed to many to be a natural solution, given the criticality of petroleum as a transportation fuel, the significance of personal-use, light-duty motor vehicles as a share of total U.S. transportation energy demand, the low fuel efficiency of American cars and light trucks, and the strength of the belief in the regulatory powers of the federal government.

By the mid-1980s, however, U.S. energy prices had been decontrolled for half a decade, the energy efficiency of the new light-duty cars and trucks had almost doubled, and the notion of energy scarcity had been put to rest. But the CAFE regulations still remained on the books. In part, this was because the domestic motor vehicle manufacturers considered them only a minor annoyance. With the increase in energy prices, meeting them had proved relatively easy. Indeed, during much of the late 1970s and early 1980s, the industry average levels for new car and light-truck fuel economy remained comfortably above the standards, and the industry built up so many "carry forward" credits that many of them expired unused.

Once energy prices plunged in 1986, however, CAFE once again became a concern to the industry. The domestic producers began to foresee the exhaustion of credits carried forward that had not expired. Moreover, because of the surge in the popularity of minivans and sport utilities, the light-duty truck CAFE standards, which were set by a somewhat different process from the passenger car standards, began to be troublesome. The industry managed to secure a rollback of the standards, including those for passenger cars throughout the 1986-1989 model years.

Given the assumptions that the advisory committee was able to agree on, it became increasingly clear that, to guarantee a credible return to 1990 levels of greenhouse gas emissions in 2005, some form of fuel tax or some way of charging for vehicle miles traveled (VMT) would have to be implemented. Alternative fueled vehicles could have little impact by that date and it appeared that VMT policies that did not rely on pricing tools (such as expanded access to transit) would produce little "bang." An increase in the CAFE standard could not accomplish much, either, given the slow rate at which the vehicle fleet turned over. Only policy tools that affected the entire existing fleet could guarantee a 2005 "return." The one tool that could be implemented quickly enough to do that, at least in theory, was a motor fuels tax—or something that closely resembled it.

To achieve return to 1990 emission levels in 2005, the Analytical Support Group's work showed that an inflation-adjusted tax increase in the gasoline tax of some 7.5 cents per year would be required every year until 2005. Furthermore, even if a Corporate Average Fuel Economy Standard of 45 miles per gallon (mpg) could somehow be obtained for passenger cars (and its equivalent for light-duty trucks), an annual inflation-adjusted increase' of about 4 cents per gallon per year starting in 2000 would still be needed. But the "if' involved in obtaining a CAFE level of 45 mpg by 2005 was purely theoretical. The motor vehicle producers viewed a CAFE of 45 mpg as outlandish—a point concurred in by a National Research Council (NRC) panel, which in 1992 indicated that a CAFE level of 32 or 33 mpg might well be "technically achievable" "with higher confidence" (and a level a couple of miles per gallon greater, possibly achievable "with lower confidence" by the midpoint of the first decade of the next century). However, the NRC panel declared that not even that more modest level of fuel economy improvement was necessarily "economically practical."

To cut to the chase, Car Talk participants found they would have to agree to recommend some form of a fuel tax to achieve the prescribed goal. Simply put, it was the inability to agree to such a tax or to find a detour around it that caused participants in Car Talk to reach gridlock and then stall out for good.

The opposition of Car Talk's oil industry representatives to an energy tax darkened the prospect of ever reaching an agreement. The oil industry's refusal collided head on with the motor vehicle industry's willingness to support such a tax. This collision blocked the path on which the representatives of the motor vehicle industry were prepared to join environmentalists to find a way to reach the Car Talk goal.

What can this particular "corpse" teach the living? First, trust among participants with competing interests has to be cultivated. Given the history of sparring between certain Car Talk participants, a lack of trust was to be expected at the outset. Unfortunately, in spite of certain small steps forward, Car Talk only reinforced the problem so that trust actually shrank over the course of the Advisory Committee's life.

If a process of this sort is to work, explicit opportunities need to be created for parties to take small, inconsequential risks that lead to positive results. Those facilitating the process and especially those sponsoring it need to work hard to provide such opportunities.

Longtime opponents need to be reminded forcefully but privately not to take cheap shots. Confidences, even trivial ones, must be observed scrupulously. (Failure to observe confidences was a continuing problem throughout Car Talk.) And opportunities must exist for private, off-the-record discussions in which individuals can search for solutions through mutually beneficial compromises.

The phrase "mutually beneficial" is important. Collaborative processes like Car Talk need to be structured so that all parties have a more or less equal stake in seeing the effort succeed, or at least not fail conspicuously. Although inclusiveness in assembling such forums is ostensibly a virtue, a roster of participants with a marginal interest in the outcome can have a deleterious effect. Everyone participating in Car Talk did seem to have some stake in the outcome, but both the stake in and the level of commitment to the success of the process varied widely.

Finally, those who sponsor an activity like Car Talk must maintain enough interest in the process to intervene knowledgeably and frequently to encourage the parties to make progress. They must provide credible threats of sanctions against those who do not participate in good faith or whose activities disrupt the work of the group. Likewise, sponsors need to provide ongoing support to those participants who run risks with their constituencies in an effort to achieve breakthroughs during difficult negotiations. Such facilitators must be able to demonstrate the clear interest of "higher ups" in the progress and in the eventual success of the effort. This obligation requires more of the sponsors than periodic briefings, infrequent phone calls and "drop ins" at staged events, or meetings that only reveal how unaware they really are of what is transpiring.