Obama proposes new vehicle-emission standards

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By Joseph Weber

President Obama on Tuesday proposed a new policy that for the first time merges fuel-efficiency standards for vehicles with limits on tailpipe pollutants, an effort to unify regulations that will greatly influence how the country's beleaguered automakers design vehicles.

"This is an historic agreement to help America break its dependency on oil," Mr. Obama said in the White House Rose Garden.

The new Corporate Average Fuel Economy (CAFE) standard will begin in model year 2012. Automakers will be required to have a fleet average of 35.5 miles a gallon by 2016 -- four years earlier than Congress mandated in 2007. By that date, the administration also will require tailpipe emissions to be reduced by 30 percent. Vehicles in the 2020 model year must have a fuel efficiency of 35 miles a gallon.

The policy will be the equivalent of taking 58 million cars off the road for a year, Mr. Obama said.

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The new regulations likely will add at least $600 to the cost of building a vehicle and cost buyers at least $1,000 more. However, consumers will recover the increase in three years from buying less gasoline, the president said.

"Drivers will save $2,800 in gas over the life of the car," he said.

The new standards bring together domestic automakers and federal and state regulators -- groups that often have been divided on how to regulate emissions.

"It's no secret these groups have been at odds for years, even decades," Mr. Obama said.

The president said the new regulations were made with the help of auto industry leaders and that the changes will help end the confusion about how to abide by standards set by the Environmental Protection Agency, the Transportation Department and California, which has led the way for 13 other states and the District of Columbia.

He lauded the efforts of California lawmakers and said all related lawsuits will be dropped as a result of the new regulations.

"For seven long years, there has been a debate over whether states or the federal government should regulate autos," said Dave McCurdy, president and chief executive officer of the Alliance of Automobile Manufacturers and a former Democratic congressman from Oklahoma. "President Obama's announcement ends that old debate by starting a federal rule-making [process] to set a national program."

Automakers historically have fought mileage and emission standards, arguing that the technology is still being developed, that it is too costly, and that market forces should drive major changes.

But the playing field has changed dramatically recently, with Chrysler LLC in bankruptcy and both it and General Motors Corp. tapping federal money to keep afloat.

While Congress has determined national CAFE standards since they began in the 1970s, the new standard would not require congressional approval because it is coming as a joint rule from the EPA and the Transportation Department.

The policy marrying the fuel and tailpipe standards was made possible by a 2007 Supreme Court decision ordering the EPA to determine whether carbon dioxide from car exhaust is a pollutant and a public-health threat. The EPA issued a draft finding to that effect last month but has yet to issue rules to counter that threat by curbing carbon-dioxide emissions.

Environmentalists hailed the announcement from the president, who has moved fast to reverse Bush-era environmental policies and put proposed regulations that the previous White House had held on a fast track to approval.

"President Obama is putting the pedal to the floor when it comes to slashing our dependence on oil and confronting global warming," Sierra Club President Carl Pope said.

"Last month, the administration closed the books on the Bush era of climate denial once and for all by acknowledging the threat of global warming, and now today they are moving forward with a plan that will give new life to the American auto industry and ensure that the next generation of clean, efficient autos will be made right here in the USA," he said.