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Thursday, August 16, 2007

Automakers Gear-Up to Stop Fuel Economy Reform

The Union of Concerned Scientists (UCS) has the dirt on the efforts of the big three — General Motors, Ford and Chrysler — to mislead the public about the benefits of improved fuel efficiency. The automakers are holding a public rally as part of lobbying efforts to persuade federal legislators to abandon proposed fuel efficiency reform, according to UCS.

The Senate has passed a bill that would strengthen the federal fuel efficiency program, known as CAFE standards. The House chose not to tackle the issue in its own energy legislation. However, Democratic leaders may push to include CAFE reform during conference proceedings before the final bill is sent to the president.

According to UCS, if the new standard was fully implemented, it would, among other things, "cut 206 million metric tons of global warming pollution in 2020 alone—equivalent to taking more than 30 million of today's average cars and trucks off the road."

But full implementation is far from a given. The Senate unwisely included a cost-benefit provision in its version of CAFE reform. Currently, the national minimum rate for fuel efficiency is a static 27.5 miles per gallon and remains as such regardless of monetized costs or benefits. The Senate bill would change that: The legislation would require regulators to prove a new standard's benefits outweigh its costs before regulating.

For more on the problems with the cost-benefit provision and why it may lead to watered-down standards, see the OMB Watch analysis "Cost-Benefit Provision Latches onto Fuel Economy Standard."