Wednesday, May 20, 2009
FORGET ABOUT the 2007 energy act that increased corporate average fuel economy (CAFE) standards -- to 35 miles per gallon by 2020 -- for the first time since 1975. President Obama announced a plan yesterday that speeds up that timetable and breaks new ground by regulating greenhouse gas emissions from motor vehicles. And he did it in the Rose Garden surrounded by smiling auto executives, environmental advocates and public officials. We note this because these three factions had been at war with each other in one form or another for years.
Think of all this as a three-ring circus. In the first ring is California, which in 2002 sought to implement a vehicle emissions standard much tougher than the federal government's. It was joined by the District of Columbia, Maryland and 12 other states. But the Golden State needed a waiver from the Environmental Protection Agency for its standard to go into effect. The Bush administration rejected the request. Mr. Obama ordered the EPA to review the decision by the end of June. In the second ring are the automakers. Complaining of the hardship of abiding by a patchwork of regulations, they have sued to block the California rules. And in the third are the EPA and the National Highway Traffic Safety Administration, which sets CAFE regulations, laboring under court orders and statutory deadlines to address emissions and fuel economy.
What Mr. Obama proposed is a national plan that would settle all fights. The White House called for a boost in CAFE standards for cars and light trucks to 35.5 mpg by 2016. The program would begin ramping up with the 2012 model year. In addition, there would be a vehicle emissions standard that, when harmonized with the new CAFE standard set by NHTSA, would make the new national standard on par with that sought by California. The state has mandated a 30 percent reduction in greenhouse gas emissions from cars and light trucks by 2016, starting with the 2009 model year. While the EPA still must decide whether to grant California the waiver, the state has agreed to defer to the national standard. And the automakers are expected to drop their remaining lawsuits. The last hurdle to implementation is the actual rulemaking process that has a deadline of March 2010.
The price of the average car is expected to rise by $1,300. But Mr. Obama said, "[O]ver the life of a vehicle, the typical driver would save about $2,800 by getting better gas mileage." Administration officials say this new plan will not limit consumers' choices but will give them more-efficient motor vehicles in all categories. It is a needed intervention on the supply side. Now, if the administration and Congress would consider a boost in gas taxes, more consumers would want to buy more-efficient cars. Recalling the gas shortages of the 1970s, Mr. Obama noted, "Calls for action rise and fall with the price of a barrel of oil." There is an opportunity to put that cycle to rest.