White House Negotiates Changes to Vehicle Mileage and Emissions Standards

Strategic Insights -

The White House is engaging in discussions with major carmakers, labor unions, and environmental groups to adjust vehicle mileage and emissions standards in the United States. The proposed changes aim to cut petrol bills for drivers, make domestic car manufacturers competitive with European and Asian producers, and help the Obama administration meet its goal of reducing carbon emissions and addressing global warming.

Key Takeaways:

  • The White House is negotiating new regulations that would require new US cars and trucks to average 56.2 miles per gallon (mpg) by 2025, a nearly double increase from the current level.
  • The proposed standards would require a 5% annual improvement in fuel efficiency between 2017 and 2025.
  • Meeting the standard of 56.2mpg would add at least $2,100 to the price of a new vehicle.
  • The Alliance of Automobile Manufacturers, the industry lobby group, believes it is technically possible to produce vehicles meeting the new standards, but notes consumers may not be willing to pay the additional cost.
  • Unions are concerned that aggressive standards could reduce sales and put jobs in danger.
  • Environmental activists, however, are pushing for stricter regulations to reduce greenhouse gas emissions.
  • The Obama administration plans to propose a standard in September, with a final rule in place by the middle of 2017.
  • The proposed changes are also expected to help the US reduce its reliance on imported petroleum.
  • The Pew clean energy program supports a minimum standard of 56.2mpg, citing the need for real progress towards reducing petroleum imports and addressing global warming.

Statistics:

  • The proposed standard of 56.2mpg is nearly double the current level.
  • The US has some of the world's lowest mileage and vehicle emissions standards.
  • European carmakers are expected to achieve fuel efficiency of 60mpg within nine years.
  • Meeting the proposed standard of 56.2mpg would add $2,100 to the price of a new vehicle.
  • The US would need to achieve an average fuel efficiency of 56.2mpg by 2025 to meet the proposed standard.
  • The proposed changes aim to reduce petroleum imports by a third.

Sources:

  • Clark Stevens, White House spokesman
  • Gloria Bergquist, Alliance of Automobile Manufacturers
  • Phyllis Cuttino, Director, Pew clean energy program