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New Fuel Efficiency Rules a Historic Turn for Climate Policy

By / 4.2.2010

Energy and climate legislation may be stalled in Congress, but President Obama is pressing forward on another crucial, clean energy front.

In a historic first, the Environmental Protection Agency and the Department of Transportation yesterday issued rules regulating greenhouse gas emissions from cars and light trucks. In 2007, the Supreme Court had ruled in Massachusetts v. EPA that the EPA had the authority under the Clean Air Act to regulate greenhouse gases. That decision paved the way for last year’s determination by the agency that CO2 and other greenhouse gases were dangerous pollutants. The rules announced yesterday combine traditional efficiency standards with direct regulation of CO2 emissions from vehicles (a proxy for fuel consumption).

Under the new standards, by model year 2016 vehicles must get an average of 35.5 miles per gallon. The requirements — which represent the administration’s most significant achievement in reducing global warming pollution — are expected to reduce greenhouse gas emissions from cars by 21 percent by 2030. The announced rule was the final implementation of a deal made by the Obama administration with the auto manufacturers last year, whereby the industry would get the certainty of a national standard in exchange for dropping their extensive litigation meant to prevent California from mandating similar tailpipe emissions standards (and having a dozen or so states follow suit).

Not to take any credit, but back in 2004, Jan Mazurek and I wrote a paper for PPI titled “Clean Cars – Kicking America’s Oil Habit, in which we argued for adopting a strong tailpipe emission approach to fuel economy. In addition to compelling environmental and national security arguments for stricter fuel efficiency rules, our motivation was to suggest a new framework beyond the broken and stale political battles over CAFE standards – the Corporate Average Fuel Economy rules that had not been raised in a generation in large part because of firm opposition from Detroit and its protectors on Capitol Hill.

We and others argued that by focusing capital and political resources on lawyers, lobbyists and the short-term political objective of defeating annual meager attempts by the environmental community to increase CAFE standards, Detroit was missing the larger vision that global automotive competiveness would be shaped in the future by innovation around fuel economy and environmental performance. We felt that the exigencies of climate change and the inevitable structural rise in fuel costs stemming from increasing global demand and the rising marginal costs of production meant that the “clean car innovators” would have an advantage in the global marketplace.

The Bush administration, after a costly “head fake” over hydrogen that caused many to take their eye off the fuel-economy ball, did propose some modest increases in CAFE standards, but they were far short of what was needed to restructure our national approach to competitiveness in the international auto marketplace, or to seriously address the economic, environmental and security threats posed by our addiction to oil.

Ultimately, it took a prostrate domestic auto industry and a high-flying new Democratic president to take serious action. The result should be seen by nearly all as a true win-win. Automakers get a national standard, we finally have a policy aimed squarely at both greenhouse gas emissions and oil dependence, and – we hope – Detroit will lay off some lobbyists while creating jobs for smart engineers.

Of course, nothing is so simple. We now see that the ultra-conservative attorney general from Virginia, in yet another pander to tea party types, has vowed to file a lawsuit challenging the new rules. (I thought it was liberals who were supposed like frivolous lawsuits?) God knows what his arguments will be, but let’s hope he comes up with a clever basis for being against jobs, innovation, increased national security and a more stable climate. Bring it on.