Auto Industry To Benefit From Emissions Cap Legislation

May 14, 2009

Yesterday, we mentioned the much-ballyhooed "Cash-for-Clunkers" legislation and how it's attached to a larger bill on energy policy. Well,  good news: not only are leaders in the house and senate still planning to extricate the clunker portion and fast-track its approval (which will hopefully boost new car sales), but when/if it passes, the big bill on energy policy will potentially generate billions of R&D dollars for America's automakers.

Here's how that'll work: the U.S. government will set caps on the amount of carbon emitted by companies in the U.S. Of course, not every industry will be able to scale back emissions overnight, so many will purchase permits that allow them to churn out more than the max amount. As it stands, automakers will receive 3% of the money generated through the sale of these permits and from the fines imposed on companies and industries that pollute without a permit. Analysts estimate that could generate billions of dollars over the next few years--dollars that automakers will likely be obliged to funnel into research and development of new, clean tech.

No word now on how those moneys will be shared among automakers or what kind of strings the cash will come with, but so far we're guardedly optimistic. That's a really step for us.

[source: DetNews]

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