“This is the decade that we must make decisions to avoid the worst consequences of the climate crisis.” – President Joe Biden’s statement; April 22, 2021.
In recent times, the United States has been at the forefront of implementing policies aimed at combating climate change and reducing greenhouse gas emissions.
One of the key areas where these efforts have been focused is improving fuel economy standards for vehicles. The Biden administration’s recent proposal to raise fuel economy standards to 58 miles per gallon (mpg) by 2032 is the latest in a series of efforts dating back to President Obama’s landmark agreement in 2011.
“I’m delighted to see that the United States is back, back to work together with us in climate politics.” – German Chancellor Angela Merkel’s comment on President Biden’s statement.
Since the introduction of the Corporate Average Fuel Economy (CAFE) standards in 1975, they have played a central role in enhancing energy security and reducing fuel consumption. The 2011 agreement under President Obama’s administration marked a significant step forward by setting an ambitious target of achieving a fleetwide average of 54.5 mpg by 2025. This commitment aimed to save consumers more than $1.7 trillion at the gas pump over the lifetime of their vehicles.
By 2026, new car drivers are expected to get 33% more miles per gallon than vehicles in 2021, resulting in substantial fuel cost savings.
Meanwhile, the 2023 proposal to raise the fuel economy standards to 58 mpg by 2032 is also expected to offer considerable lifetime fuel cost savings for vehicle owners, amounting to approximately $1,043 per vehicle.
The rule, according to National Highway Traffic Safety Administration (NHTSA), “will encourage manufacturers producing (internal combustion engine) vehicles during the standard-setting timeframe to achieve significant fuel economy, improve energy security, and reduce harmful pollution by a large amount.”
But, despite the fact that this increase in fuel efficiency will also raise the average vehicle cost by $932, it is a cost the market can bear without causing consumer acceptance or sales issues, as per NHTSA’s statement.
The automotive industry’s response to these standards has been mixed.
While the Alliance for Automotive Innovation, representing major automakers like General Motors, Toyota, and Volkswagen, has requested the Environmental Protection Agency (EPA) to soften its emissions proposal, Tesla has advocated for more strict requirements.
The industry’s challenges lie in balancing regulatory compliance, technological innovations, and maintaining profitability. The transition to electrification and the development of advanced technologies have become a crucial part of their strategies as they adapt to the changing environment.
The fuel economy standards have not only impacted consumers and the automotive industry but have also played a vital role in job creation. A report by the Ceres group suggests that the 5% annual increase in fuel efficiency is projected to create 603,000 new jobs nationally by 2030. This emphasizes the positive contribution of these standards to economic growth and job market sustainability.
Furthermore, the environmental benefits of these standards can also not be overlooked. The NHTSA estimates that the 2023 proposal, if implemented, would cut gasoline consumption by 88 billion gallons through 2050, significantly reducing greenhouse gas emissions, approximately 780,056,000 metric tons of CO2 (This calculation depends on the fact that a gallon of gasoline produces about 8,887 grams of CO2 a year.).
President Obama’s 2012 announcement indicated that the standards would cut emissions by 6 billion metric tons over the life of the program – an amount more significant than the total carbon dioxide emitted by the United States in 2010, a staggering 30.6 billion tones. Hence, such reductions are highly significant in combating climate change and promoting environmental justice.
As we approach 2032, the success of these fuel economy standards will depend precisely on a collaborative effort between regulators, automakers, and consumers as the journey towards a sustainable future will require collective action from all stakeholders, and the economic benefits will undoubtedly be felt for generations to come.
