America’s desire to achieve energy independence and reduce greenhouse gas emissions is clear. What remains unclear, however, is how the United States will best tailor its regulatory policies to ensure the needs of a diverse automotive marketplace are met while still pushing the boundaries of technical innovation within the industry.

The twin goals of lower carbon emissions and increased energy independence are being promoted, in part, by the Administration’s soon-to-be released fuel economy standards for 2017-2025. These regulations will guide the next chapter in the impressive history of the automotive industry to deliver technological innovation satisfying a demanding and diverse consumer marketplace. The U.S. automotive industry has a legacy of achievement in balancing regulatory requirements with production feasibility and consumer interests. The integration of game-changing technologies from power steering to ABS braking to onboard telemetry is evolutionary because they bring real value to the end consumer.

The desire to pursue the technologies of tomorrow and achieve our energy independence is not a free lunch. The investment in future technologies like vehicle electrification go well beyond the engine bay to include sourcing and developing raw materials, complex vehicle integration and development, infrastructure support on a national level and increased costs for consumers forced to the cutting edge of what is still a boutique technology.

This paper explores areas of the public policy debate not fully considered in the development of government’s standards and programs to help achieve these energy goals. In particular, it looks at the vital role of the internal combustion engine and it’s still enormous potential through existing and developing technologies to increase our energy independence and improve our carbon footprint in the United States – starting today. It also analyzes effective public policies to facilitate these goals without assigning unnecessary and unsustainable economic burdens to the manufacturing industry, the end consumer or the American taxpayer – any of which can derail the adoption of new innovations and thus our ability to achieve our goals.

Above all, to spur broad innovation public policies and incentive plans must be technology neutral.

Government should set the goals — even aggressive goals — that inspire the freedom to innovate, and then get out of the way. State and federal public officials should resist the temptation to pick winners and losers, to let politics and fads enter the debate, or to engage in centralized planning in a highly complex industry. Market acceptance is also critical to defining the best technology or portfolio of technologies necessary to reach the targets set by government.

Current fuel economy policy clearly demonstrates this fact. Our policy leaders continue to pursue prescriptive technology policies in the hopes of solving all of our energy and emissions problems. Washington, DC’s current focus is electric vehicles (EVs) and electric technology. Monetary incentives are being used to alter consumer and manufacturer decisions. The federal government is pushing their fleet-procurement decisions almost completely to EVs and hybrids irrespective of costs. The

Environmental Protection Agency (EPA) continues to employ outdated mileage formulas (55 city 45 highway) that do not accurately represent consumers driving habits and dramatically tilts manufacturers into producing electric-vehicle solutions. Through the examples above, it is clear that Washington is not seeking a technology neutral solution. In short, government is stifling innovation by using its considerable powers to push one technology ahead of other viable technologies, leading to distortions in both research and markets.

Here are six reasons why technology neutral policies make sense:

  1. Technology neutral policies have historically been successful.
  2. From a “well-to-wheel” perspective, high efficient gasoline and diesel engines are nearly as energy efficient as any technology available.
  3. The quickest and most cost-effective way to achieve our energy usage goals is through faster adoption of fuel efficient downsized gasoline and diesel engines.
  4. Consumers are showing an overwhelming preference for fuel-efficient internal combustion engines in the marketplace.
  5. Advanced diesel technology can help achieve petroleum and emissions reductions with widespread adoption in the near and medium term.
  6. There must be a reduced burden on American taxpayers.

Heavily focusing on specific technologies creates the allure or perception of the potential for a “silver bullet” that is an answer to all our problems. In advancing the ultimate goal to reduce our dependency on foreign oil, improve fuel economy, diversify vehicle technology and reduce emissions, we owe it to the coming generations to make the best policy decisions we can. An objective foundation of technology neutrality simply gives us the best chance for success. By supporting extended technological innovation, our leaders will mobilize an experienced industry to effectively and affordably deliver fuel efficient vehicles that meet the varying needs of the American driver today and for years to come.

Read our full White Paper: Technology Neutrality White Paper