standards will call for 34.1 miles per gallon by 2016. It
also will put in place the nation's first tailpipe regulations for
carbon emissions. The EPA lauds the plan, with EPA
Administrator Lisa Jackson saying that the plan will create the
equivalent of taking 42 million cars off the road -- without removing
The EPA estimates that between 2012 and 2016
950 million metric tons of greenhouse gas emissions will be reduced,
the average vehicle owner will save $3,000, and oil consumption will
be cut by 1.8 billion barrels.
The government agencies
admit that there will be costs. They estimate that the
legislation will raise car sticker prices $1,000 (still less than the
fuel economy savings), will cost the auto industry $60B USD over five
years ($12B USD/year), will cost 5,000 jobs in 2012 alone, and will
depress industry sales by approximately 58,000 vehicles.
new rules will force cars to average 38 mpg by 2016 and light trucks
to average 28.3 mpg. GM and Ford will have to average 37.3 mpg
for their cars. They will also have to average 26.6 mpg (GM)
and 27.3 mpg (Ford) for their light trucks. Chrysler gets the
strictest light truck regulations at 28.5 mpg, but laxer car
standards at 36.8 mpg.
The NHTSA and the EPA are confident in
their bold experiment in market regulation, though. They say
that by 2016, the losses will be reversed and approximately 65,480
vehicles more vehicles will have been sold and 5,795 auto jobs will
be created. Basically, they believe the net effect will be
slightly beneficial economically, while being respectively more
beneficial, in turn, for consumers and the environment. They
acknowledge, though, that "the possibility exists that there may
be permanent sales losses."
The administration also
acknowledges that there will likely be a cost in human life.
Small cars generally don't fare as well in crashes, and the agency
estimates 493 additional "weight-related" auto deaths in
2016 from the shift to lighter vehicles. They estimate 1,100
extra fatalities from 2012 to 2016, but they expect the number to
drop to 250 extra a year by 2020. The net financial impact from
2012 to 2016 of these deaths is estimated to be approximately $15B
USD in losses.
Automakers do have a number of ways to escape
the restrictions, somewhat. Building more efficient air
conditioners (which decreases carbon emissions) will earn credits, as
will the sale of E85 ethanol vehicles. Advanced technology
vehicles, flex fuel vehicles and other measures will also earn
credits. Further, small automakers, selling less than 400,000
vehicles a year will only have to meet a more relaxed standard.
automakers will likely take issue with these exceptions, though, and
have plenty to say in the upcoming 60 day review period for the
Dave McCurdy, CEO of the Alliance for
Automobile Manufacturers, a coalition of Detroit's three automakers
and eight others stopped short of criticizing the measure for the
time being, stating, "[The current plan] provides manufacturers
with a road map for meeting significant increases for model years
2012-2016. Final rules are essential to providing manufacturers with
the certainty and lead time necessary to plan for the future and cost
effectively add new technology."