It is all too familiar to hear criticism of California’s regulatory process, also known as promulgation (10 points if you can say that five times fast), so when Senate Pro Tem Darrell Steinberg and the recently appointed Jobs Czar Michael Rossi highlight regulatory reform as key to restoring California jobs the pronouncements garner the requisite ‘bravos’ and ‘hear, hears’.
Is all regulation bad? Certainly not. But regulation not based on actual data or even a cursory understanding of real world factors is by all accounts is not good for our state. One requirement of regulatory agencies that demands concrete, real data is the oft-mocked Economic Impact Analysis (EIA).
Case in point is the Greenhouse Reduction Measure for Heavy-Duty Vehicles in the final steps with the California Air Resources Board (CARB). This regulation takes a great voluntary program, known as SmartWay, by the U.S. Environmental Protection Agency to promote best practices for heavy duty vehicle fuel efficiency and turns it into a $10.4 billion mandate. However, CARB’s estimate claims a net savings of more than $3 billion from greater fuel efficiency.
One element of the regulation requires the addition of aerodynamic ‘skirts’ between the axles of the trailer. CARB says that What company would not adopt a technology that could save so much in fuel costs, mandate or not?
Unfortunately, a peak behind the curtain of CARB’s miraculous savings shows a different story. CARB guesses that trucks travel at speeds in excess of the legal limit a least 84 percent of the time they are on the road. Anyone who has driven on California roads especially in the Los Angeles or San Francisco Bay areas knows how often traffic flows at the speed limit and trucks are limited to 55 miles per hour.
Where did CARB get the 84 percent number? Where is the data that CARB used to calculate this fantastic number? Those are questions the California Trucking Association posed to Board members in two separate letters. The answers equate to “we are that going to tell you”. In fact, CARB’s regulatory filings have gone as far to say that no such data exists.
We offered to provide data from some of our members (yes, data does exist), but that offer was ignored as well. Why let actual data get in the way of a bad regulation. For every 10 percent that CARB’s 84 percent estimate is off, the ‘savings’ drops $1.75 billion, so that $3 billion in savings disappears very quickly.
A brief survey of some California Trucking Association members showed that there is a wide variance in the amount of time trucks drive at speed. Some companies reported 10 percent and others as high as 34 percent, but nothing in vicinity of 84 percent. Even if we spot them 10 points, CARB is still 40 percent above reality and that $3 billion in saving plummets $7 billion and nets a cost of $4 billion.
The trucking industry is happy to play its part in improving California’s environment. However, let’s deal with reality and not fanciful assumptions. Let’s not change a great program like SmartWay into the dumb-way.
Last session, we sponsored legislation by Assembly Member Tony Mendoza that would require CARB to share the data they use in an Economic Impact Analysis, but CARB said it would cost too much and kept their data behind the curtain. It is time for CARB to clear the air and let some sunshine onto their analyses.
Almost every ranking or survey of state business environments puts California at or very near the bottom, so it is encouraging to hear our leaders talk about regulatory reform. However, if that is where it stops because it feels better to impose a mandate truckers than it does to honestly assess the costs and benefits of a regulation we might as well drop the charade.
Leaving aside the outcome of a regulation, Californians deserve and demand a honest assessment of the impacts and government agencies that do not play hide the ball. Transparency is the real smart way.