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The Obama Administration’s CAFE Standards

President Obama’s CAFE Standards Require New Cars to Average 35.5 mpg by 2016

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On May 19, 2009, President Barack Obama announced a new national policy and set tough new CAFE standards that will increase fuel efficiency and reduce greenhouse gas emissions for all new cars and trucks sold in the United States beginning in 2012.

The new CAFE standards (CAFE stands for Corporate Average Fuel Economy) are the most aggressive fuel-efficiency standards ever established at the national level. This is also the first time the U.S. government has exercised its authority to control vehicle tailpipe emissions of carbon dioxide and other greenhouse gases that contribute to global warming.

How Do the New CAFE Standards Work?
Here are additional details and key benefits of the new CAFE standards set by the Obama administration:

  • The new CAFE standards apply to model years 2012-2016 for all passenger vehicles sold in the United States, including cars, light trucks and SUVs. Significant improvements in fuel efficiency will be required of all new vehicles in 2012 model, with yearly gains of 5 percent or more in subsequent years.

  • By 2016, automakers’ passenger vehicle fleets must achieve a combined average fuel-economy standard of 35.5 mpg—39 mpg for cars and 30 mpg for light trucks and SUVs—a 40 percent improvement over current standards. The new CAFE standards also achieve the target goal four years sooner than the current law passed by Congress in 2007, which required average fuel economy of 35 mpg by 2020.

  • The new CAFE standards are expected to save 1.8 billion barrels of oil over the life of all new passenger vehicles sold during the five years between 2012 and 2016. To help put those fuel savings in perspective, 1.8 billion barrels is more oil than the United States imported in 2008 from Saudi Arabia, Venezuela, Libya and Nigeria combined.

  • The new CAFE standards are expected to achieve a reduction of 900 million metric tons in vehicle tailpipe carbon dioxide (CO2) emissions, the equivalent of taking 177 million cars off the road or shutting down 194 coal-fired power plants.
In addition to increasing fuel efficiency and reducing vehicle greenhouse gas emissions, the new CAFE standards set by the Obama administration also reconciled longstanding disputes between the federal government, several states, environmentalists and the nation’s automakers over fuel efficiency and regulation of vehicle tailpipe emissions.

What is the History Behind Obama's New CAFE Standards?
Here are a few key milestones in the controversy that led up to the new national standards for vehicle fuel efficiency and emissions:

  • In 2002, the State of California enacted a state law regulating both vehicle fuel economy and CO2 emissions. Because the California standards were higher than the federal standards at that time, the state applied to the U.S. Environmental Protection Agency for the necessary waiver that would allow the state law to take effect. Although granting such waivers is usually fairly routine, the Bush-administration EPA refused to respond to California’s request. Meanwhile, several other states and the District of Columbia prepared to implement their own more stringent regulations once the California waiver was granted.

  • In 2004, automakers sued California in federal court, contending that only the federal government could set vehicle mileage standards and demanding a consistent, nationwide standard for fuel efficiency.

  • In April 2007, the US Supreme Court ruled 5-4 that carbon dioxide is a pollutant as defined by the Clean Air Act and that the EPA has the authority to regulate carbon dioxide emissions from automobiles and other vehicles. The Court ordered the EPA to re-evaluate its responsibility to regulate vehicle tailpipe greenhouse gas emissions in light of the new ruling.

  • In December 2007, the EPA denied California’s request for a waiver under the Clean Air Act, which would have allowed the state to implement its own, more stringent CO2 regulations. In response, California and 16 other states filed a petition with the U.S. 9th Circuit Court of Appeals in San Francisco, asking the court to overturn the EPA decision.

  • In January 2009, President Obama ordered the EPA to review its decision to deny the California waiver.

  • In April 2009, the EPA confirmed that CO2 emissions pose a threat to public health and welfare and are subject to federal regulation under the Clean Air Act.
By setting a strong national standard for fuel efficiency and vehicle tailpipe emissions, President Obama managed to satisfy all of the key stakeholders. States and environmentalists got higher fuel efficiency and lower greenhouse gas emissions, and automakers got a single national standard that makes it unnecessary for them to build different versions of the same car, or to meet a patchwork of different state and federal standards.

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