The Obama administration announced this week that it plans to increase fuel efficiency standards on cars and trucks by 2016.
As a result, manufacturers will be forced to increase fuel economy standards by 5 percent annually. New cars and trucks would need to achieve an average rating of 35.5 miles per gallon, compared with the current 27.5 miles per gallon for cars and 23.1 miles per gallon for light trucks.
The 35.5 mile per gallon requirement will come into effect four years before the current law requires manufacturers to achieve the standard. The carbon dioxide emissions standard could also be achieved by manufacturers if they limit their vehicles to producing no more than 250 grams of carbon dioxide per mile. According to the Washington Post, both goals are achievable with current technology.
The proposal fills in the details of President Obama’s May Rose Garden speech where he said cars would be held to a higher environmental standard under his watch.
“We are launching ? for the first time in history ? a national standard aimed at both increasing gas mileage and decreasing greenhouse-gas pollution for all cars and trucks sold in America. The action will give our auto companies some long-overdue clarity, stability and predictability,” Obama was quoted by the Washington Post as having said during a Tuesday appearance at a General Motors plant in Lordstown, Ohio.
Tuesday’s announcement marks progress on one portion of the president’s environmental agenda, and it comes at a time when the president’s cap and trade agenda has stalled in the Senate. Senate Majority Leader Harry Reid, D-Nev., said Tuesday the Senate would likely put off action on cap and trade until next year.
The proposed rules come as a result of a 2007 U.S. Supreme Court ruling that gave the Environmental Protection Agency the ability to regulate tailpipe greenhouse gas emissions.
EPA Administrator Lisa P. Jackson said the proposed regulations could save 1.8 billion gallons of oil between 2012 and 2016 and enacting them would eliminate the same amount of greenhouse gases as taking 42 million cars off the roads. The regulations will have a 60-day comment period before they go into effect.
The Heritage Foundation says this new regulation imposes an undue cost on American manufacturers that will be passed along to consumers in the form of higher prices. The only area where Detroit has a competitive advantage over its foreign competitors is in the area of trucks and larger cars, and as a result it will pass along higher costs for these vehicles to consumers in order to subsidize the production of smaller vehicles.
“What we have here is another attempt to impose costs on consumers who will have to buy smaller cars that are more expensive to meet the standard, and that aren’t what they would buy if they had their druthers,” said Heritage Foundation Senior Policy Analyst David Kreutzer.
The move likely will cost manufacturers an estimated $60 billion by 2016, but the Alliance of Auto Manufacturers welcomes the move.
“"Last May, automakers committed to President Obama to increase the average fuel economy in new vehicles by 40 percent to a combined 35.5 miles per gallon by 2016,” Dave McCurdy, president and CEO of the Alliance of Auto Manufacturers said in a statement. “The proposal provides manufacturers with a roadmap for meeting significant increases for model years 2012-2016. Final rules are essential to providing manufacturers with the certainty and lead time necessary to plan for the future and cost effectively add new technology.”
Environmentalists likewise hailed the rule calling it “truly historic.”
Brendan Bell, spokesman for the Union of Concerned Scientists, said the move was the biggest fuel-economy increase in 30 years. He also told the Washington Post, the government needs “to watch to make sure that automakers are not using Enron accounting to meet compliance.”
Senate Foreign Relations Committee Chairman John F. Kerry, D-Mass., expressed hope the new regulations would improve the U.S. negotiating posture at the upcoming Copenhagen climate conference.
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