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The Auto Bailout's "Policy Paradox"

Posted by: Michael Dudley

7 April 2009 - 2:00pm

The American and Canadian governments are caught in a "policy paradox:" they want to promote green vehicles but they need to save their domestic auto industries. Both may not be possible, says Konrad Yakabuski.

"From gas-powered subcompacts to fuel-efficient diesel engines to all-electric vehicles, the market for green cars is about to reach a tipping point. Just how fast it happens, though, will depend on how governments on both sides of the Canada-U.S. border juggle a set of conflicting objectives.

On one hand, they are vowing to crack down on carbon-emitting activities such as driving gas guzzlers. They are promising to impose tougher fuel-efficiency standards on auto makers. They are pushing public transit like never before.

On the other hand, the same governments are propping up Chrysler and General Motors Corp. with billions of dollars in order to save jobs. Staving off the car companies' collapse revolves around getting consumers to buy more of the larger vehicles that dominate the companies' current offerings, emissions be damned.

The auto bailouts, for all their expediency, represent a case of government policy at odds with itself."

Full Story: Green Dreams, Unplugged
Source: The Globe and Mail, April 4, 2009
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