Obama Unveils ‘Historic’ Car Efficiency Standards

Obama Unveils ‘Historic’ Car Efficiency Standards

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auto-execs-obama-garden.jpgPresident Obama yesterday announced what amounts to a historic shift in climate change policy, a new rule that strengthens fuel economy and greenhouse gas emission standards for cars.

In a show of unity, Obama was joined in the Rose Garden by the Presidents or CEOs of ten automobile manufacturers and the United Auto Workers as he proclaimed a new consensus where “Everybody wins.”

The program will require an average fuel economy standard of 35.5 miles per gallon for all new trucks and cars sold in the United States in the model year 2016, including SUVs — from the current 25 mpg. The deal would save a projected 1.8 billion barrels of oil over the life of the 8-year program. Or, in the President’s words, “more oil than we imported last year from Saudi Arabia, Venezuela, Libya, and Nigeria combined.”

Addressing concerns about whether these changes would mean higher car costs, the President explained that those costs, estimated to average about $600 per car, would be offset in just three years, and that “over the life of a vehicle, the typical driver would save about $2,800 by getting better gas mileage.”

A top auto industry spokesman summed it up in a statement before the event began: “What’s significant about the announcement is it launches a new beginning, an era of cooperation. After seven long years of debate over whether states or the federal government should regulate autos, the President has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and many environmental groups to the table… We’re all agreeing to work together on a National Program.”

A national policy on fuel economy standards and greenhouse gas emissions is welcomed by the auto manufacturers because it provides regulatory certainty and predictability — rather than varying state and federal standards — and includes flexibilities that will significantly reduce the cost of compliance.

Transportation Secretary Ray LaHood called the program “the biggest leap in history to make automobiles more fuel efficient.”

It is the first U.S. national limit on greenhouse gas emissions.

Environmental leaders applauded but will push for more stringent standards. “This is an important step forward in fulfilling the promise to make the United States a leader in the fight against global warming,” said Brian Nowicki, California climate policy director at the Center for Biological Diversity. “But it is critical that we continue to push for more ambitious automobile standards; under today’s proposal the U.S. fuel economy would still be lower in 2016 than China achieves today.”

Current European and Japanese standards are approximately 43.3 and 42.6 mpg, respectively; China’s standard is 35.8 mpg this year.

Governors Arnold Schwarzenegger of California and Jennifer Granholm of Michigan attended the announcement with Mr. Obama. Automakers in the group included executives from Ford, Toyota, General Motors, Honda, Chrysler, BMW AG, Nissan, Mercedez-Benz, Mazda, Volkswagon,

COMMENTS

  1. Perhaps it is my ignorance of the economics involved, but I feel like at this time of massive auto maker failures, the cost to develop new technology to produce 35mpg will drive more out of business. Maybe it’s for the best in the long run, but it may hurt us all plenty in the short run. But, cheers to Obama. I feel we should be moving toward a more European model of socialized democracy.

  2. These hard economic times will pass. We must point the USA to the future. We can either lead or follow. This country has always been about innovation. I would like to see a return of the can do spirit we had when we put a man on the moon. The USA has the right stuff to meat this goal.