Cyrillic Partners

I’m struck again by the profusion of news items surrounding an industry of interest. I’m writing about green vehicles and trying to give some perspective on the market.

The words are flowing out of my Internet connection like endless rain into a paper cup.  Just in this small niche of the world there are dedicated newswire style blogs such as AutoblogGreen, a quarterly journal and online portal called the Green Car Journal and ample coverage in venture-related blogs such as the extensive list of electric vehicle startups listed in VentureBeat.

How can the “Renaissance Journalist” compete with these focused outlets? Is this even the proper role for a journalist or editor? I recently wrote on this, but am starting to wonder about it.

Tradable emissions permits markets were all the rage when I was in school. It seemed like the perfect opportunity to solve a social problem in a sane, economically-justified libertarian way. The professors painted a picture of economists saving the day by pointing the invisible hand of the marketplace toward an intractible social problem.

Well, fast forward a few years and the cracks in the system are starting to show. My friend Katie Fehrenbacher’s great site, Earth2Tech.com, has a great description of what’s going on:

The fragility of the nascent carbon offset economy is front and center this week. As the U.N. was kicking off its Framework Convention for Climate Change in Bali yesterday, on the other side of the world Irish certified emission reduction (CER) credit provider AgCert saw its stock tumble over 70 percent. The collapse occurred following the company’s announcement that it would not be able to deliver all of the 7.2 million tons of United Nations-approved carbon offsets if had committed for 2008.

This follows Friday’s report from the WWF that a full fifth of U.N. carbon credits issued through the Clean Development Mechanism (CDM) are bogus and actually increase emissions. None of this bodes well for the struggling carbon market. The cap-and-trade carbon solution is the favored mechanism for carbon emissions control, but the U.N.’s top climate change official Yvo de Boer warned last month at the Carbon Forum Asia that the carbon trading market “could disappear more quickly than it appeared.”

Reporter Craig Rubens does a good job of wrapping up the recent developments in cap-and-trade systems and says that much of the future of the current carbon trading program relies on what happens in Bali in the next two weeks.

We’ll be keeping an eye on it.

Corporate Average Fuel Economy (CAFE) standards set the minimum gas milage an automobile maker’s fleet can obtain and has been a matter of contention for years.

Congress is expected to vote on higher standards for miles per gallon Wednesday. SFGate has a good quick history of the legislation:

If the bill passes, it would shake up the fuel economy of the U.S fleet, which has been stagnant for two decades. After Congress passed the program in 1975, fuel economy of passenger cars doubled in 10 years, from 14 miles a gallon to 28 miles per gallon by 1986. But as oil prices dropped in the late 1980s, automakers began selling SUVs, trucks and sedans that were bigger and more powerful - features consumers enjoyed.

Critics complained that, without any push from Washington, auto companies have let fuel economy flatline. Current law requires 27.5 miles per gallon for cars - the same as a decade ago - and 22.2 miles per gallon for light trucks.

Generally speaking, the position of V and I is that government should stay out of the way of the “invisible hand” of the marketplace for solving social problems. One of the big problems with legislation of this type is the bizarre incentive structure it establishes. And every piece of legislation has its loop holes.

CAFE is the perfect example. The legislation was designed, in part, to give farmers a break. It recognized that there was a subset of the U.S. population that needed serious trucks for agricultural work and it didn’t want to screw those people over.

But times change (always faster than Congress legislates) and light trucks became increasingly popular for the general public as commuter vehicles. The SUV became a favorite tool for suburban “soccer moms.” And automakers classified SUVs as light trucks, which are held to a lower CAFE standard.

So as SUVs became more popular, the percentage of vehicles on the road that had to actually achieve the 27.5 mpg fleet average decreased. I don’t know the stats, but I’d wager that the mpg average of all vehicles on the road was actually much, much closer to the light truck standard than anyone in Washington ever imagined.

So much for the “standard.”

More on this legislation later.

[Picture by Yuri Bereznyuk/European Pressphoto Agency, via NYTimes.com]

Bad weather damaged nearly a dozen small oil tankers in the Kerch Strait, which links the Sea of Azov with the Black Sea, leaving sea birds slicked with oil, the NYT reports.

A world away, a tanker grazed the Bay Bridge and sent a slick out across the San Francisco Bay. CNN reports: Nearly 200 dead birds have been recovered from the bay, while another 465 birds have been rescued alive but oiled, according to Lisa Curtis, administrator of Department of Fish and Games office of spill prevention and response. Federal investigators are investigating.