Obama Speeds Fuel-Economy Standard, Sets Carbon Limit (Update1)
U.S. President Barack Obama
The plan adopts nationwide a standard proposed by California, setting the first-ever U.S. limit on greenhouse-gas pollution from vehicles.
Auto companies and California have signed off on the proposal, ending their feud over the state’s proposed rules. California’s Republican Governor Arnold Schwarzenegger and General Motors Corp. Chief Executive Officer Fritz Henderson are among those planning to attend Obama’s announcement.
“It launches a new beginning,” said David McCurdy, president of the Alliance of Automobile Manufacturers, in a statement. “The president has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and many environmental groups to the table.”
The Washington-based alliance represents 11 carmakers, including GM, Chrysler LLC, Ford Motor Co. and Toyota Motor Corp.
Other CEOs attending today’s White House announcement are Chrysler LLC’s Bob Nardelli, Ford Motor Co.’s Alan Mulally and Daimler AG’s Dieter Zetsche. United Auto Workers President Ron Gettelfinger will also be there, according to a White House statement.
Obama’s 35.5 mpg standard for 2016 models matches the target set by California under a 2004 state law. It compares with the 27.3 mpg that the U.S. Transportation Department said last month automakers would have to meet for their 2011 models.
A law enacted by Congress in 2007 required automakers to raise fuel-economy standards by at least 40 percent, which would have forced them to meet a target of 35 mpg by 2020.
‘Biggest Step’
Obama’s action is the “biggest single step to curb global warming,” Dan Becker, director of the environmental group Safe Climate Campaign, said in an interview.
While California achieved its emissions goal, auto companies also won some of what they sought. The federal government, rather than individual states, will set fuel-economy standards through 2016. Also, those standards will be set based on vehicle attributes, such as size and weight, though each auto company will also have to meet a fleet standard.
“GM is fully committed to this new approach,” Henderson said in a statement. “GM and the auto industry benefit by having more consistency and certainty to guide our product plans.”
Detroit-based GM, already surviving on $15.4 billion in U.S. Treasury aid, is trying to shave costs and shrink union- retiree obligations in advance of a government-imposed June 1 deadline to avert bankruptcy. Chrysler LLC is already operating in bankruptcy.
$600 More a Vehicle
Under Obama’s proposal, the Environmental Protection Agency would set the new standard for greenhouse gas emissions. That standard would be harmonized with separate fuel-economy rules set by the Transportation Department.
The plan would reduce greenhouse gas emissions by 900 million metric tons through 2016, the senior administration official said. In 2016, meeting the standards will cost automakers $600 a vehicle in addition to the $700-a-car cost automakers face under standards in existing law, the official said.
Also in 2016, light trucks would have to meet a standard of 30 mpg, and the average for cars would be 39 mpg.
California has been seeking a federal waiver to set its own greenhouse-gas emissions standard under state law, and at least 17 states said they would follow.
“California’s relentless push for greenhouse gas reductions from automobiles is paying off not just for our state, but for all Americans,” Schwarzenegger said in a statement.
California’s Request
Former President George W. Bush turned down California’s waiver request. Obama, during his first week in office, directed the EPA to reconsider the decision. The EPA hasn’t made a final decision, and California has said it would defer to the federal standard if the waiver is granted, said the senior administration official who requested not to be identified before the announcement.
California still may need the waiver so the state could regulate emissions while the federal rules are developed, said Becker of the Safe Climate Campaign. The EPA has set a June 30 deadline to make a decision on California’s request.
The federal rule would start with 2012 models and run through 2016. After that, California could again seek a waiver to set tougher standards. Automakers under the federal plan have more time to get their product lines in order, preparing for the 2016 goal, than California gave them, the senior administration official said.
‘Normally at Odds’
“You will see people that normally are at odds with each other in agreement with each other,” Obama spokesman Robert Gibbs said yesterday, in advance of today’s White House gathering.
The Obama administration is making automobiles go farther on a gallon of gas, said Ann Mesnikoff, director of the Green Transportation Campaign at the environmentalist Sierra Club.
“We have an industry that after years of fighting tooth and nail against higher standards is finally coming to the table and saying they have technology and can do it,” Mesnikoff said.
The United Nations Intergovernmental Panel on Climate Change said in a 2007 report there’s a 90 percent certainty that greenhouse-gas emissions from power plants, cars and other human activities are causing higher temperatures and sea levels, potentially leading to dangerous climate change.
To contact the reporters on this story: Kim Chipman in Washington at kchipman@bloomberg.net; John Hughes in Washington at jhughes5@bloomberg.net.
To contact the editors responsible for this story: Larry Liebert at lliebert@bloomberg.net Jim Kirk at jkirk12@bloomberg.net.
