Consumer Federation says new mpg rules will be cost effective

“Ending our dependence on fossil fuels is the most difficult challenge we have ever faced,” said President Obama yesterday, announcing new national standards for carbon dioxide emissions that will raise fuel economy requirements to 35.5 mpg, combined average for cars and trucks, by 2016. “We have known about the costs of this oil dependence since the gas shortages of the 1970s, and all too little has been done.”

Now the administration has brought together a coalition of automakers, environmentalists, state governors, autoworkers, and federal agencies to sign on to the new agreement.

The new standards, however, are expected to raise prices by $1,300 per car by 2016, according to an analysis by the Obama administration.

That seems like a lot to ask of consumers in such a deep recession. But a new analysis by the Consumer Federation of America (CFA) shows that the proposal will actually save the average new-car buyer $500 a year in fuel costs (read pdf), assuming gas prices return to $3 a gallon. Overall, the savings could amount to $2,500 over the lifetime of the car.

At that rate, they say it would take less than three years for consumers to break even, even with the extra up-front cost of the cars. If gas went to $4 a gallon, consumers would save $650 a year.

The Administration also estimates that the new standards will save 1.8 billion barrels of oil over the lifetime of the cars produced in those years, equivalent to the amount of oil the U.S. imports annually from Saudi Arabia, Venezuela, Libya, and Nigeria combined.

The agreement promises to reduce greenhouse gas emissions by nine million metric tons a year. While the fuel economy standards are slightly lower than those proposed under a California bill that was awaiting federal approval, the potential CO2 savings are far greater because the standard is applied to all cars nationwide.

Ten automakers signed on to the agreement, and the executives of those companies stood behind the President as he made the announcement today at a Rose Garden ceremony.

The President wryly noted that, “It’s no secret that these are folks who have occasionally been at odds for decades, and embroiled in lawsuits against one another.” Now, he said, “What everyone believes is that status quo is unacceptable.”

On the agreement, Senior Director of the Consumer Reports Auto Test Center David Champion said, "The U.S. is taking a major step forward in producing greener, more fuel-efficient vehicles. This decision provides a clear path for a national standard after years of uncertainty, which is a relief for the auto industry and consumers alike. These standards strike a good balance between fuel economy and maintaining safe cars. In the long run, the fuel savings should help offset the higher costs of building greener vehicles. This is a good step for consumers' pocketbooks, auto safety groups, and the environment."

To learn more, read "EPA introduces first CO2 limits for cars."

—Eric Evarts

Learn about driving green in the Consumer Reports special fuel economy section.

Comments

[Burzin]

The fuel savings resulting from this regulation are great, however, how do we know that this is the least costly and/or most efficient way to reduce CO2 emissions?

A carbon tax on fuels would easily restrict CO2 emissions from autos, and might in fact even do a better job than the regulation because historically, higher MPG standards actually lead to increased driving and thus have equivocal impacts on CO2 emissions. A carbon tax would also create incentives for the population to figure out the most productive ways to reduce CO2 emissions.

The only reason I can think of as to why a carbon tax is not preferred is maybe because of the political cost of raising taxes, especially on gas, whose price gets a lot of media attention.

I'm all for having more fuel efficient vehicles as a way to reduce our dependence on natural resources, but let us combine this with a more efficient way, like a carbon tax to reduce CO2 emissions.

[what's in our gas?]

Will Consumer Reports be doing a lab testing on the different gasoline companies fuels anytime soon? I've been told that the companies have different formulas and that the smaller brand gas companies put more water into their gasoline. I'd really be interested in seeing the results of the gas analysis.

[We Don't Want Toy Cars]

We have cars that get 35 mpg now! Very few people want them!

[everett whitney]

TO: " What's In Our Gas ?.."

CERTAINLY you had to be in jest regarding "..smaller companies putting in more water ..?"

Any more, our current { and for many years in the past, for that matter } computer-controlled vehicles plus the variety of feed-back loops within those 2 - 3 - 4 Catalytic Converters WILL / Would stop the engine almost immediately!

Simply DO buy your fuel from / at a station in your area that has has all-new fiberglas underground tanks recently installed as well as does sell LOTS !

There ARE far better things for C.R. to expend their Lab Facilities & Staffs' time upon!

everett

[Andy]

How exactly are higher milage standards supposed to benefit anyone if consumers do not want to buy higher milage vehicles? Here in Europe the market is absolutely dominated by cars in the B- (Ford Fiesta) and C-segments (VW Golf) that get radically better milage than the most popular models in the US. This is not because of punishing fuel economy standards or some sort of innate European environmental friendliness, but rather the plain and simple result of a GAS TAX.

Raising fuel taxes (even in a revenue-neutral way, balanced out, for example, by cuts in payroll taxes) would be simpler and much more likely to have the desired effect.

[Cale]

Andy's comments are not atypical but fail to offer a fair and equitable solution. Fuel taxes, as evidenced in the European model, fund social welfare programs (health care and education, are just a couple) and in doing so provide a direct benefit to all members of those nations. In the absence of similar programs, a high gas tax in the US would burden the most economically disadvantaged without offering any benefit for their contribution.

[Greg]

The increased fuel efficiency of vehicles that comes at a cost of an increase in the purchase prices of those vehicles will negatively impact me and others who drive significantly less than the average U.S. driver. I put only about 500 miles on my car annually! (Yes, I know about Zipcar and its competitors, but none of them has vehicles parked in a location that's convenient for me.)

[Rudy]

We all know the road taxes (including gas guzzler tax) will not be used to maintain the roads, or even go into health/education. It will go into some politicians' pet projects. Meanwhile, they'll continue to raise the budget and ask for more money to replace the money they've wasted.

[Paul]

President Clinton told us we would have mass produced cars that get 50 mpg by now. Well we do have mass produced cars that get 50+ mpg, BUT they are sold in the UK as the Honda Accord Diesel.

Accord Diesel really gets 50+ mpg, goes 131 mph, and has 0-60 mph time of 9 seconds.