Return to 2011, the bailout of the auto industry still fresh in minds. Barack Obama applied pressure as he looked for a show of appreciation from General Motors, Chrysler and carmakers indirectly affected by the rescue operation. Auto executives joined
Return to 2011, the bailout of the auto industry still fresh in minds. Barack Obama applied pressure as he looked for a show of appreciation from General Motors, Chrysler and carmakers indirectly affected by the rescue operation. Auto executives joined the then-president to announce a shared commitment to increase the average fuel-efficiency standard for new cars and light trucks to roughly 36 miles per gallon by 2025.
Return to 2011, the bailout of the auto industry still fresh in minds. Barack Obama applied pressure as he looked for a show of appreciation from General Motors, Chrysler and carmakers indirectly affected by the rescue operation. Auto executives joined the then-president to announce a shared commitment to increase the average fuel-efficiency standard for new cars and light trucks to roughly 36 miles per gallon by 2025.
The improved efficiency not only would bring net savings for consumers. It promises to ease carbon emissions, transportation being responsible for one-third of this leading source of climate change. The effort has succeeded. In 2007, average fuel efficiency was 20.8 miles per gallon. Today, it is 25.1.
Unfortunately, auto executives now see an opening to ease the requirement moving forward. That is why President Donald Trump traveled to Detroit last week. He is ready to comply with the industry request. The vehicle is a review established as part of the original agreement. It was set for 2018. The Obama team attempted to hustle the evaluation to an early conclusion. It fell short. So the Trump White House has agreed to start the process over.
Automakers argue that getting to the final goal in the next eight years amounts to a steep and costly technical challenge. They project an investment of $200 billion to meet the standards. They add that consumers also have made the job more difficult, lower gas prices resulting in more purchases of less-efficient SUVs and light trucks. Their bottom line? The standards risk higher prices, reduced sales and a darker outlook for the industry.
Then there is this piece of context: Scott Pruitt, the new Environmental Protection Agency administrator, recently said that he doesn’t view carbon emissions as a primary driver of global warming.
So, the arguments appear to align for relaxing the fuel standards, especially when the new president appears to want something in return, a commitment from the industry to invest more at home and keep jobs here.
That trade-off might sound appealing. It also carries concerns. The structure of the auto supply chain and larger state of the industry invite questions about how much carmakers will invest in domestic markets. Of late, they have enjoyed record sales and handsome profits. Are they ready to expand or wary of overbuilding?
Because of the law and court rulings, the president isn’t in position to back away entirely from the higher efficiency standards.
Even an easing would have harmful consequences. Obama set up two paths for meeting this country’s part of the Paris Agreement for curbing global carbon emissions — the Clean Power Plan involving coal-fired power plants and the higher fuel-efficiency standards. Lower the standards, and compliance with the agreement is unlikely, diminishing the crucial role of American leadership, not to mention the overall effort, hard to achieve in the first place.
Worth emphasis, too, is that $200 billion investment promises a solid return for consumers. Projections are the expense would add an average $875 to the sticker price of a car — and then deliver three times that amount in savings to those behind the wheel.
— Akron Beacon Journal
