Bush Punts Fuel Economy Standards to Obama

Photo: Tim McCaig / Istock

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Having already bailed out two of the Big Three with multi-billion-dollar loans that don't include stipulations for environmental performance, the Bush Administration's last act affecting the U.S. auto industry is to avoid tightening fuel economy standards.

The Bush Administration's process for determining these new standards, mandated by Congress only after the administration refused to allow California to tighten its own standards, was deeply flawed, according to environmental watchdogs like the Union of Concerned Scientists. So it may not be such a bad thing that the Obama Administration will set the final rules.

Bush had settled on a 25% improvement to fuel economy standards by 2015, a step toward the 35 mpg fleetwide standard that Congress requires by 2020. The Union of Concerned Scientists has pointed out that Americans could save the equivalent of $1 or more on gas by 2010 if the Bush Administration used accurate data when making its fuel economy decisions.

Still, it's another example of Bush and the U.S. auto industry avoiding what many commentators see as a necessity: the need to innovate. Innovate, in this case, means producing cars that Americans want to buy, but which also achieve high environmental standards. That only 14 cars and SUVS made in 2009 get better than 30 mpg is a sad fact.

The Bush Transportation Department cited the troubles in the auto industry in punting on fuel economy standards. It estimates the fuel economy upgrades will cost automakers $100 billion by 2010 to achieve them.

One might ask: How much has it cost the automakers — and taxpayers — to avoid higher standards? While Toyota and Honda have not been spared as Americans stopped buying cars and the world economy tanked (nor have they argued for new U.S. fuel economy standards), analysts are virtually unanimous in pointing out that one of their chief strengths has been their development of fuel-efficient cars that people actually want to buy. Might they have developed those cars because of government mandates elsewhere in the world?

Remember: These national fuel economy standards are only on the books because of political pressure. When California passed a law regulating greenhouse gas emissions from vehicles — which would have resulted in a mandate to improve fuel economy — the Environmental Protection Agency under Bush refused to grant the state the waiver needed. The Supreme Court sided with California, and still the Bush EPA refused. Congress passed the national fuel economy upgrade, which provided the Bush Administration cover for its rejection of California's law.

If the government — that's you and me, and our tax dollars — is investing so many billions in these companies, shouldn't it — we — be able to bank on a better environment as part of the deal? If transportation is such a key producer of global warming emissions — and it is — then why wouldn't we take a hard line on "encouraging" innovation in that direction?

The Bush Administration has decided that's not the tack it will take. What will Obama do?

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