Obama Ratchets Up Car Fuel Efficiency Standards

Photo: Patrick Herrera / Istock

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The Obama Administration set new fuel efficiency standards Tuesday that for the first time regulate greenhouse gas emissions as a pollutant.

In that, it was the culmination of a tortuous legal battle that began in 2004 when California proposed setting its own regulations on carbon dioxide emissions from cars. The industry fought that rule all the way to the Supreme Court, which in 2007 sided with California's right to set its own pollution rules. But to do so, California needed a waiver from the Environmental Protection Agency, which the Bush Administration refused to grant. Obama reconsidered, and had a strong bargaining position, having propped up two of the Big Three with government money to prevent their collapse.

The new rules, which go above and beyond what Congress had mandated in 2007, will result in a 5% annual increase in fuel economy so that by 2016, cars and trucks will have to average 35.5 mpg -- a 30% increase for cars and a 54% increase for SUVs and pickups.

But not all the industry players are playing nice: Also Tuesday, the National Automobile Dealers Association and the U.S. Chamber of Commerce filed a lawsuit attempting to prevent government regulation -- at the state or federal level -- of greenhouse gas emissions from vehicles.

A clearer message from Congress, that the U.S. is ready to regulate greenhouse gases, might achieve results with a fraction of the legal wrangling. So far the House has passed the first nationwide carbon cap-and-trade rule, and the Senate is set to debate its version of an energy bill soon.

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