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CAFE clash
Improving fuel economy standards good for all
Published March 24, 2007 at midnight
In his State of the Union address to Congress in January 2006, President Bush declared that America is addicted to oil. A year later in his January 2007 State of the Union address, Bush called for steps to break that addiction. With gasoline prices above $3 a gallon in some parts of the country, continuing tensions in the Middle East - which holds more than half the world's oil - and concerns mounting over global warming, now is the time for action, not talk.
Increasing the efficiency of American cars and trucks is the "sweet spot" at the intersection of oil policy, lowering consumer costs, reducing oil imports and cutting greenhouse gas emissions. Among our policy choices, increasing fuel efficiency is the only approach that simultaneously serves all three public policy goals.
The administration's proposals are extremely weak, but members of Congress from both parties have started to introduce much stronger bills, many of which had bipartisan support in the last Congress. Bills in the House and Senate would require the corporate average fuel economy (CAFE) of new cars and trucks to increase by 10 miles per gallon over the next 10 years and by 4 percent every year thereafter. Automobile manufacturers would have to ensure an average fuel efficiency of about 41 miles per gallon by 2022.
The urgency of moving forward is readily apparent when we consider the role that the United States plays in global oil and energy consumption. The U.S. consumes about 25 percent of the world's oil and gasoline, but we have less than 3 percent of the world's oil reserves. We import more oil than just about any other nation (twice as much as the second largest importer) and we export huge sums of money (over $300 billion in 2006). These imports weaken our economy and our national security. We also emit about a quarter of the world's global warming pollutants. Thus, consumer, national security and environmental interests have converged.
An analysis by the Consumer Federation of America shows that, by 2022, raising CAFE standards would reduce our oil imports by 2.2 million barrels per day (more than 15 percent), would save consumers almost $25 billion per year, and would reduce the emission of global warming pollution by hundreds of millions of tons.
From the consumer point of view, these increases in fuel efficiency pay for themselves because the reduction in spending for gasoline equals or exceeds any increase in the cost of vehicles. A 10 mpg increase in fuel efficiency would save consumers about $1,500 over the period of a typical five-year auto loan. These savings would more than cover the increased costs that consumers would pay for a more fuel efficient car.
The average fuel efficiency of American vehicles has been stuck in neutral for almost two decades. CAFE standards have not been increased significantly in recent years and U.S. auto manufacturers have actually been heading in the wrong direction - toward less fuel efficient vehicles. From 1976 to 1996, the CAFE program was extremely effective at cutting oil consumption and increased the efficiency of the vehicle fleet by almost 50 percent. Over the past decade, however, we have gotten lazy and allowed the average fuel economy to stagnate.
Now is the time to substantially increase the CAFE standards, close the program's loopholes, and get America on the road toward greater fuel efficiency and reduced oil consumption.
Stephen Brobeck is the executive director of the Consumer Federation of American. Mark Cooper is the organization's research director.
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