President Resolves Differences On CAFE & Auto GHG Management

May 19: In a White House Rose Garden event with many distinguished attendees, President Obama announced his national autos program to adopt uniform Federal standards to regulate both fuel economy and greenhouse gas (GHG) emissions while preserving the legal authorities of DOT, EPA and California. Attending the ceremony were the CEO's of major U.S. and foreign auto companies, the heads of U.S EPA and DOT, and other departments, Governors of MI, CA, and MA, Senators from MI and CA, major environmental organizations and others. The President's program resolves years of bitter controversy and legal wrangling over CAFE (Corporate Average Fuel Economy] standards, the "California waiver" and related energy and climate change issues.

The program covers model year 2012 to model year 2016 and ultimately requires an average fuel economy standard of 35.5 mpg in 2016. The result is a projected reduction in oil consumption of approximately 1.8 billion barrels over the life of the program and a projected total reduction in greenhouse gas emissions of approximately 900 million metric tons. This groundbreaking policy is good for consumers, good for the auto industry and it helps our country by reducing pollution and promoting energy independence.

Ten car companies and the UAW have embraced the national program because it provides certainty and predictability to 2016 and includes flexibilities that will significantly reduce the cost of compliance. The program also honors President Obama’s commitment to reconsider the denial of the California waiver by the Bush Administration. Under the agreement, EPA would grant California's request to enforce its state clean car standards while the U.S. develops harmonized national emission standards and fuel economy standards under Federal law. Significantly, the nation's automakers would drop long-standing litigation over the state clean car standards.

According to a White House fact sheet, the resolution would be good for consumers, the economy and the country. The fact sheet indicates that consumers will receive savings in increased fuel efficiency; maintain a choice of vehicles such as size of cars, trucks and SUVs; and benefit from reduced air pollution, the reduction of greenhouse gas emissions and other conventional pollutants.

The economy and auto companies would benefit by having one national policy for all automakers; the potential to lower compliance costs for automakers by avoiding a patchwork of fuel efficiency and pollution rules; providing clarity, predictability and certainty concerning the rules; and providing flexibility on how to meet the expected outcomes and the lead time needed to innovate.

Finally, the country would benefit by reducing the dependence on oil (1.8 Billion barrels of oil cumulatively, over the lifetime of the program) and significant reductions in greenhouse gas emissions (savings equivalent to taking 177 million of today's cars off the road). And, the program would result in historic collaboration between EPA and DOT, and cooperation and support between CEOs, Governors, the UAW, the environmental community and others.

President Obama said, "In the past, an agreement such as this would have been considered impossible. 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. As a result of this agreement, we will save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years. And at a time of historic crisis in our auto industry, this rule provides the clear certainty that will allow these companies to plan for a future in which they are building the cars of the 21st century."

According to a White House release, this groundbreaking policy delivers on the President’s commitment to enact more stringent fuel economy standards and represents an unprecedented collaboration between the Department of Transportation (DOT), the Environmental Protection Agency (EPA), the world’s largest auto manufacturers, the United Auto Workers, leaders in the environmental community, the State of California, and other state governments.

EPA Administrator Lisa P. Jackson said, "The President brought all stakeholders to the table and came up with a plan to help the auto industry, safeguard consumers, and protect human health and the environment for all Americans. A supposedly 'unsolvable' problem was solved by unprecedented partnerships. As a result, we will keep Americans healthier, cut tons of pollution from the air we breathe, and make a lasting down payment on cutting our greenhouse gas emissions." Carol Browner, Assistant to the President for Energy and Climate Change said, "A clear and uniform national policy is not only good news for consumers who will save money at the pump, but this policy is also good news for the auto industry which will no longer be subject to a costly patchwork of differing rules and regulations. This an incredible step forward for our country and another way for Americans to become more energy independent and reduce air pollution."

Dave McCurdy, president and CEO, Alliance of Automobile Manufacturers said, "For seven long years, there has been a debate over whether states or the federal government should regulate autos. President Obama’s announcement ends that old debate by starting a federal rulemaking to set a National Program. Automakers are committed to working with the President to develop a National Program administered by the federal government. What’s significant about the announcement is it launches a new beginning, an era of cooperation. 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."

Frances Beinecke, President of the Natural Resources Defense Council (NRDC) said, "President Obama, the state of California, the auto industry, and environmental leaders have come together around a global warming solution that will strengthen our economy and put the auto industry on the path to a clean energy future. The future of the auto industry lies in making cleaner, more fuel-efficient vehicles that reduce global warming pollution and our dependence on oil. These new national rules build on California's ground-breaking standards to tackle global warming pollution from cars and trucks. Starting in model year 2012, the new standards will deliver cleaner, higher-mileage cars nationwide, cut global warming pollution, and save drivers money every time they fill up."

Access a release from the White House (click here). Access a White House fact sheet (click here). Access a lengthy release from Alliance of Automobile Manufacturers with an historical summary (click here). Access a release from the NRDC (click here). [Note: Many others issued releases on this development; too numerous to cover all]