President Barack Obama’s announcement of rules increasing and standardizing fuel economy standards is ambitious but necessary. It also dovetails well with a bill, currently pending in the U.S. Senate, to encourage drivers, through financial incentives, to trade in older, less fuel-efficient vehicles for ones that use less gas and pollute less.
Last week, the administration unveiled plans to raise corporate average fuel economy (CAFE) standards to 35.5 miles per gallon by 2016. This is nearly a 40 percent increase over today’s standards and a significant improvement over the modest CAFE increase included in the 2007 energy bill.
In effect, the country will adopt standards approved by California and a dozen other states, including Maine, but held up in court. In supporting the new rule, the auto industry has agreed to drop its challenge to the California standard.
It is discouraging that American car companies have signed on to the new rules because they had to — they need federal financial support to survive — rather than because it was necessary. Already warnings have been issued that the higher standards will force car companies to make vehicles that Americans don’t want.
Automobile preferences are driven, in part, by gas prices. But, even as gas prices dropped from their high of over $4 a gallon, sales of sport utility vehicles and trucks have slumped. Last summer, when gas prices were near their peak, SUV sales were off by more than 30 percent, while sales of smaller cars were up. The recession has substantially cut into all car sales, but smaller cars continue to sell better than SUVs.
To encourage drivers to continue to switch to more fuel efficient vehicles, Sen. Susan Collins has partnered with Democrats Dianne Feinstein of California and Charles Schumer of New York to present a “Cash for Clunkers” bill in the Senate. Similar legislation in the House contains much lower fuel efficiency standards, so the Senate version is a marked improvement, although not as good as the proposal initially proposed by Sen. Collins.
Under “Cash for Clunkers” drivers could receive up to $4,500 for trading in an older, less efficient vehicle and buying one that gets better gas mileage. To qualify for a voucher, the “clunker” must get 17 miles per gallon or less and the new passenger car must get at least 24 miles per gallon and a new light truck must get 20 miles per gallon, the current average for these vehicle classes. Someone buying a car that gets 13 miles per gallon more than the trade-in would get a voucher worth $4,500.
Such incentives, coupled with steady movement to higher gas mileage standards, will reduce American imports of oil, while also reducing pollution.