President Barack Obama will propose Tuesday the first national standard for greenhouse gas emissions from automobiles while accelerating the current timetable for raising fuel economy standards. It could be expensive. Speaking to reporters Monday evening, a senior administration official said that by 2016, the target date for the changes, the proposal will add another $600 to the expected average cost increase of $700 per vehicle from the fuel economy initiative passed by Congress in 2007. Earlier this year, General Motors Vice Chairman Robert Lutz said the tailpipe emissions standard could cost “$4,000 to $5,000 extra, on average, per vehicle.”
There’s a discrepancy in the estimates, but no matter which way you slice it, cars and trucks are going to get more expensive. The administration says vehicle price increases will be offset by fuel savings. Under the guidelines to be unveiled by the White House, automakers will be required to ramp up fleet-wide fuel economy beginning with model year 2012, reaching 35.5 miles per gallon by 2016–four years earlier than Congress mandated in 2007. In addition, the administration will set a higher national standard for vehicle tailpipe emissions that matches the stringent rules that California and 13 other states sought to apply.
The proposal runs through 2016 because the Department of Transportation only has the authority to work ahead through that date. The administration estimates the savings will be equal to 1.8 billion barrels of oil and shutting down 194 coal-fired power plants.
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