Obama unveils major US fuel efficiency programme

by GreenWire.org.uk. Published Tue 19 May 2009 14:16
President to announce first-ever national emissions limits

US President Barack Obama will today unveil plans to urge drivers to get more miles to the gallon and reduce the car's imact on the environment.

Obama is to announce the first-ever national emissions limits for cars and trucks, as well as introducing a 35.5 miles per gallon standard.

Consumers have been warned they should expect to pay an extra $1,300 per vehicle by the time the plan is complete in 2017.

The plan is seen in the United States as a compromise between carmakers and state lawmakers over emission standards.

Obama's plan couples for the first time pollution reduction from vehicle exhausts with increased efficiency. The scheme is estimated to save 1.8 billion barrels of oil through 2017 and would be the environmental equivalent to taking 177 million cars off the road.

Today's formal announcement is also expected to spell out that new vehicles on the US roads would be 30 percent cleaner and more fuel-efficient by the end of the programme.

Administration officials said consumers were going to pay an extra $700 for mileage standards that had already been approved. The comprehensive Obama plan would add another $600 to the price of a vehicle, a senior administration official said.

The extra miles would come at roughly a 5 percent increase each year. By the time the plan takes full effect, at the end of 2017, new vehicles would cost an extra $1,300.

That official said the cost would be recovered through savings at the pump for consumers who choose a standard 60-month car loan and if gas prices follow government projections.

In a battle over emission standards, California, 13 other states and the District of Columbia have urged the federal government to let them enact more stringent standards than the federal government's requirements. The states' regulations would cut greenhouse gas emissions by 30 percent in new cars and trucks by 2017 — the benchmark Obama planned to unveil for vehicles built in model years 2015 and beyond.

The Obama plan gives the states essentially what they sought and more, although the buildup is slower than the states sought. In exchange, though, cash-strapped states such as California would not have to develop their own standards and enforcement plan. Instead, they can rely on federal tax dollars to monitor the environment.

The auto industry will be required to ramp up production of more fuel-efficient vehicles on a much tighter timeline than originally envisioned. It will be costly; the Transportation Department last year estimated that requiring the industry to meet 31.6 mpg by 2015 would cost nearly $47 billion.

But industry officials — many of whom are running companies on emergency taxpayer dollars — said Obama's plan would help them because they would not face multiple emissions requirements and would have more certainty as they develop their vehicles for the next decade.

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