President Obama unveiled new national auto emissions and efficiency standards today that will require automakers to boost the average fuel efficiency of cars sold in the United States to 35.5 miles per gallon by 2016. These new standards will raise the federal fuel economy requirements in line with the strict limits that California and approximately a dozen other states have been trying to impose, and are the first-ever national limits on greenhouse-gas emissions from cars and trucks. As President Obama stated at a Rose Garden ceremony today: “For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing greenhouse gas pollution for all new trucks and cars sold in the United States of America.”
The administration’s proposal is almost as stringent as California’s proposed regulation, which has been on hold pending a waiver from the U.S. Environmental Protection Agency (EPA). The proposed standards, however, will affect all 50 states and could have a greater impact. Further, the proposed standards will unify the requirements promulgated and implemented by the Department of Transportation and the EPA.
President Obama’s proposal attempts to strike a compromise. On the one hand, the automakers have opposed California’s request for a waiver from EPA because it could lead to a patchwork of state regulation. On the other hand, the administration is committed to reducing greenhouse-gas emissions that lead to global warming and the proposed fuel-efficiency standards could assist in the national debate over a cap-and-trade system.
Effect on the California waiver request
Under the Clean Air Act, any state may enforce air pollution standards that are more stringent than the federal standards, provided the EPA issues a waiver. In the past, such waivers had been all but automatic. This was not the case for California’s proposed fuel-efficiency standards.
In 2005, California sought the waiver but the Bush administration refused to grant California and 13 other states the exemption on the grounds that fuel efficiency should be regulated nationwide. The Bush administration and the automakers argued that there would be different standards in various states that would lead to confusion and consumer chaos. The states filed a lawsuit against the federal government, but litigation became moot when President Obama followed through with his campaign promise to ask the EPA to re-examine the states’ waiver requests.
California officials expect the EPA to grant the waiver soon, with the state’s regulation taking effect 45 days after that. Once the federal standard is in place, California would switch to the nationwide standard, which would give automakers more time to ramp up to the 2016 goal than California’s regulation.
New fuel efficiency standards
Current federal standards require 27.5 mpg for cars and 22.3 mpg for SUVs and light trucks.
The proposed federal standards will require automakers to increase fuel efficiency beginning with the 2012 model year. Automakers’ fleets would be required to average 39 mpg, and light trucks and SUVs would be required to reach 30 mpg by 2016—four years sooner than federal law now requires. The federal standard will undergo months of federal rule-making.
The new rules implement the fuel-efficiency requirements more slowly than California’s proposal, so the auto industry has a longer time period to bring the more fuel-efficient models on line. The goal is that all automakers will meet the same standards as California by model year 2016. This will require the auto industry to act quickly now to design vehicles that can satisfy the new fuel-efficiency and emissions standards.
Impact on greenhouse-gas emissions and federal legislation
The new standard will reduce nationwide oil consumption by 1.8 billion barrels while cutting carbon dioxide emissions by the equivalent of taking 177 million cars off the road or closing about 190 coal-fired power plants.
The president’s announcement also signals the administration’s success at bringing varying interests to the table to negotiate successfully. Environmental groups, automakers, and California officials have all praised the compromise. President Obama will need to maintain these relationships to pass federal legislation regulating greenhouse-gas emissions.