An initial analysis indicates that none of the special interest groups spreading money around Washington got all that they wanted.
The U.S. Department of Transportation (DOT) Secretary Ray LaHood and U.S. Environmental Protection Agency (EPA) Administrator Lisa P. Jackson today jointly proposed a rule establishing what they called “an historic national program” that would improve vehicle fuel economy and reduce greenhouse gases.
Under the proposed program, which covers model years 2012 through 2016, automobile manufacturers would be able to build a single, light-duty national fleet that satisfies all Federal requirements as well as the standards of California and other states.
The proposal includes miles per gallon requirements under NHTSA’s Corporate Average Fuel Economy Standards (CAFE) program and the first national emissions standards under EPA’s greenhouse gas program. Earlier, EPA said that greenhouse gases are a threat to public health.
Since the carbon dioxide (CO2) emitted from the tailpipes of new vehicles is the natural by-product of the combustion of fuel, the increased standards would also address climate change by reducing tailpipe emissions of CO2. Those emissions represent 97 % of the total greenhouse gas emissions from motor vehicles.
The collaboration of federal agencies for this proposal also allows for “clearer rules for all automakers,” instead of three standards (DOT, EPA, and a state standard), according to the administration.
An initial analysis indicates that none of the special interest groups spreading money around Washington got all that they wanted. However, several questions remain about the granting of wavers to producers of luxury vehicles for the rich, among others, that will be debated as the rulemaking process continues into next spring.
Another area of debate is the controversial estimate from NHTSA and EPA — that U.S. consumers who purchase their vehicle outright would save enough in lower fuel costs over the first three years to offset the increases in vehicle costs. This remains to be demonstrated.
Some industry estimates put the average increase in vehicle price at more than $3,000, which means recovery could take decades, depending on the price of fuel and the improvement in economy.
The Administration estimates that consumers would save more than $3,000 due to fuel savings over the lifetime of a model year 2016 vehicle, but did not provide details on how this was calculated. As always the devil is will be in the details of the final law, and politicians are not known for accuracy in such financial predictions.
Specifically, if enacted, the program would:
• Increase fuel economy by approximately five percent every year
• Reduce greenhouse gas emissions by nearly 950 million metric tons
• Save the average car buyer more than $3,000 in fuel costs
• Conserve 1.8 billion barrels of oil
The proposal elaborates upon the principles President Obama announced with automakers, the United Auto Workers, environmentalists, and state officials in a Rose Garden ceremony back in May, and would provide coordinated national vehicle fuel efficiency and emissions standards that automakers desperately lobbied for.
“American drivers will keep more money in their pockets, put less pollution into the air, and help reduce a dependence on oil that sends billions of dollars out of our economy every year,” said EPA Administrator Lisa P. Jackson.
Increase Fuel Economy and Reduce Carbon Dioxide Emissions
The national program would require model year 2016 vehicles to meet an estimated combined average emission level of 250 grams of carbon dioxide per mile. Under the proposed program, the overall light-duty vehicle fleet would reach 35.5 miles per gallon in model year 2016, if all reductions were made through fuel economy improvements instead of makers using credits for electric vehicles or the introduction of new technology and other such proposed credits and loopholes remain in the final rule.
If this, dubious scenario in my view, occurs, Congress’ fuel economy law passed in 2007 of 35.0 mpg by 2020 will be met four years ahead of schedule.
NHTSA and EPA predict that automakers would meet these proposed standards by improving engine efficiency, transmissions and tires, as well as increasing the use of start-stop technology along with in air conditioning systems.
EPA and NHTSA also anticipate that these standards would promote the more widespread use of advanced fuel-saving technologies such as hybrid vehicles and “clean” diesel engines. The proposal is silent on the massive subsidies that some automakers are lobbying for to make advanced technology vehicles and electric cars viable.
Reduce Greenhouse Gases
The Administration maintains that climate change poses a significant long-term threat to America’s environment. The vehicles subject to the proposed rules announced today are responsible for almost 60% of all U.S. transportation-related greenhouse gas emissions. These will be the nation’s first national greenhouse gas standards.
The proposed standards would require model year 2016 vehicles to meet an estimated combined average emission level of 250 grams of carbon dioxide per mile under EPA’s greenhouse gas program. The combined EPA and NHTSA standards would reduce carbon dioxide emissions from the light-duty vehicle fleet by about 21% in 2030 over the level that would occur in the absence of any new greenhouse gas or fuel economy standards. The greenhouse gas emission reductions are said to be the equivalent to the emissions of 42 million cars.
“The increases in fuel economy and the reductions in greenhouse gases we are proposing today would bring about a new era in automotive history,” Transportation Secretary Ray LaHood said. “These proposed standards would help consumers save money at the gas pump, help the environment, and decrease our dependence on oil – all while ensuring that consumers still have a full range of vehicle choices.”