The announcement has been widely hailed as the largest effort undertaken by any US president to cut on the road emissions and introduce a set of standards that will possibly put the United States in the moral driver’s seat when Copenhagen’s climate negotiations come in December.
Bellona welcomed the proposals warmly, but with some caveats. Bellona expert Konrad Pütz pointed out that while Obama spelled out laudable goals, the emissions restrictions the US president wants seven years down the road are already in effect in Europe, meaning the US car industry will continue to compare unfavorably with emissions regulations of its counterparts.
The plan, said Obama speaking at an outdoor event in the White House’s Rose Garden, will also set tougher fuel efficiency guidelines in an effort to wean the country off foreign oil supplies – one of his central campaign promises – and called the standards a historic turning point toward a clean energy economy.
"For the first time in history, we have set in motion a national policy aimed at both increasing gas mileage and decreasing green house gas pollution for all new trucks and cars sold in the United States," Obama said, flanked by auto-industry representatives, California Governor Schwarzenegger and Jennifer Granholm, governor of Michigan, the seat of US auto making.
“While the United States makes up less than 5 percent of the world’s population, we create roughly a quarter of the world’s demand for oil – and this appetite comes at a tremendous price,” he said.
Obama’s emissions initiative also accelerates federal corporate average fuel economy, or CAFÉ, improvements to match California’s emission requirements by 2016.
“Bellona is happy to see president Obama allowing states to pursue their own climate policies. Even more so, tightening up the federal CAFE standards delivering reductions 4 years prior to previous rulemaking is great news,” said Svend Soyeland, Bellona’s international director.
The rules, which will begin to take effect on cars and trucks manufactured beginning in 2012, will put in place a federal standard for fuel efficiency of 35.5 miles (57.1 kilometers) per gallon – a standard that is as tough as the California programme, while imposing the first-ever US limits on climate-altering gases from cars and trucks
Car and trucks 40 percent cleaner
The effect, said Obama, will be a single new national standard that will create a car and light truck fleet in the United States over the next seven years that is almost 40 percent cleaner and more fuel-efficient than it is today.
Under the old rules set seven years ago, the industry would not have had to reach the 35 mile per gallon mark until 2020. The acceleration will reduce greenhouse gas emissions by roughly 30 percent by 2016 and would result in a 200 million ton reduction in 2016, according to a 2008 California analysis.
"In the past, an agreement such as this would have been considered impossible," said Obama.
"That is why this announcement is so important, for it represents not only a change in policy in Washington, but the harbinger of a change in the way business is done in Washington."
The president said the net effect of his proposals will amount to removing 177 million cars from the road over the next six and a half years. In that period, he said, the savings in oil burned would amount to last year’s combined imports from Saudi Arabia, Venezuela, Libya and Nigeria.
Obama said that the plan would also give carmakers new certainty about federal regulatory policy and permit them to better plan for the future as struggling domestic companies restructure.
Environmentalist hail one of “biggest efforts ever’
The announcement, greeted warmly by environmental campaigners, coincides with an effort by the White House and Obama’s Democratic allies in Congress to pass a landmark bill aimed at combating global warming.
"Today’s announcement is one of the most significant efforts undertaken by any president, ever, to end our addiction to oil and seriously slash our global warming emissions," said Sierra Club executive director Carl Pope.
"The speed with which the Obama administration is moving to build the clean energy economy has been breathtaking."
Dan Becker, director of the Safe Climate Campaign, which has advocated increasing fuel economy and emissions standards, said, “from my understanding, there will be a California clean-car standard for the whole country. Overall, this is the biggest step the American government has taken to cut greenhouse gas emissions.”
Becker said he expected the new federal standards would take two years to ramp up before they match the stringency of California’s standards and that as part of the deal, carmakers would drop their legal opposition to the states’ efforts to adopt tighter tailpipe standards.
But still not up to European standards
Bellona’s Pütz, an advisor with Bellona Europa, Bellona’s Brussels office, pointed out that Europe has in effect been requiring the standards Obama is suggesting for years.
He pointed out that the 2016 35.5 mile per gallon objective translates into a fuel consumption of 6.72 liters per 100 km and emissions of 156 grams of CO2 per kilometer for gasoline powered cars and 179 grams per kilometer for diesel cars.
The 2007 average car emissions in Europe is now 158 grams per kilometer, which is already better than the figures sought by the United States for 2016. The 120 grams of emissions per kilometer by 2012 objective translates into 27 miles per gallon for gasoline cars and 23,5 miles per gallon for diesel cars.
Pütz said that Obama’s proposal was "an important first step to include car efficiency and green house gas emissions in national legislation in the US. But much more will be needed to bring the US car fleet up to level with the rest of the world."
Auto industry along for the ride – forced but smiling
Auto industry officials said the Obama plan would provide the single national efficiency standard they have long desired, a reasonable timetable to meet it and the certainty they need to proceed with product development plans.
Ford CEO Alan Mullaly said he was "absolutely pleased" with the new regulations, which he said would help drive development of sustainable vehicles which run on new generation energy sources, Agency France Presse reported.
New GM CEO Fritz Henderson, said that harmonizing various regulatory standards "will benefit consumers across America."
"Energy security and climate change are national priorities that require federal leadership and the president’s direction makes sense for the country and the industry," he said, according to AFP.
The industry position is a 180 degree turn-about after years of fighting tougher emissions and mileage standards in court and in Congress, and is necessitated by the changing political climate, as well as automaker’s current dependence on Washington’s largesse to survive.
Auto giants like Chrysler and General Motors are receiving billions of dollars in federal help, closing hundreds of dealerships and trying to design the products and business strategy they will need to survive. Their once mighty political clout, therefore, is only as strong as the recession will allow it to be.
“The fact that the announcement may have the support of the auto industry is yet another indication of the growing consensus within the business community that Congress needs to take strong action on energy reform – and it needs to do it now” said Daniel Weiss, climate director at the Center for American Progress.
New standards a triple-victory
In proposing new fuel economy standards for vehicles, the Obama administration is going for a triple victory. The new corporate average fuel economy, or CAFÉ standards would resolve the argument between California and auto manufacturers over implementing the state’s emissions regulations, and would burnish the administration’s credendials on climate change issues. They would also throw the ailing U.S. auto industry a lifeline.
Car-makers have long battled California’s attempt to raise fuel economy standards, arguing that other states would follow – creating a patchwork of regulations across the 50 states.
With the proposed uniform national standard, car manufacturers are expected to drop their challenges to California’s efforts. That would lead the way to a stable business plan as they would then know what target they are working toward and on what timetable, for the whole US market.
Therese Langer, director of transportation for the American Council for an Energy-Efficient Economy said it’s a tough bargain. On the one hand, automakers get a uniform standard, but on the other hand, it’s a very high standard set by California’s ambitious goals. “It’s a trade-off of what they see as a uniform and certain policy over the next couple of years” Langer said of the auto industry. “And to their credit, they’re ready to accept it and move on.”
The changes will involve some pain for Detroit, but it’s a necessary step to make Detroit competitive in the world’s growing clean-car market.
Bill Van Amburg, senior vice president of CalStart wrote in an e-mail “the rest of the world is already moving to more efficient technology for vehicles – this gets our auto industry back in the game – and with public funding to accelerate them on this path.”
Cars will be more expensive because of the new regulations — by up to $600 dollars per vehicle on top of the $700 dollar price hike expected with the CAFE rules already passed by Congress.
However, drivers will likely be able to recoup the cost as they will have to buy less fuel over the vehicle’s lifetime.