Impact of New Fuel Economy Standards on Your Wallet

Sat, 06/05/2010 - 04:10

In the previous year, when more Americans got conscious of the need for alternative energy and conservation, the Obama led government introduced a set of auto standards that would authorize an increase in fuel economy and enforce gas standards of greenhouse on the country’s vehicles starting with 2012 models.

At present, about a dozen states including California have similar laws that authorize levels of emissions, so in the view of President Obama, these newly introduced standards will be helpful to auto companies predictability by removing the doubts behind state regulations on standards of auto emission.

These changes would positively place the standards of corporate average fuel economy to 35.5 miles per gallon by 2016. Because of this rise in fuel efficiency, drivers would be able to save $2,800 on average over the lifetime of vehicles being sold in the coming five years and oil of around 1.8 billion barrels.

The corporate average fuel economy or CAFÉ originated in the Congress in 1975 with the Energy Policy Conservation Act which had increased new car fuel economy by double in 985. While the enforcement of corporate average fuel economy standards was divided between two separate government agencies, the new rile of Obama will be able to support greater cooperation between the Department of Transportation and Environmental Protection Agency.

While environments specialists have praised the new CAFÉ standards as an initiative towards greener and less oil dependent nation, there are some who have criticized the new rules for being not realistic. Opponents had argued that the only way for the auto makers to be able to meet these standards is to either reduce the size of the cars they produce or increase the price of each car sold. They claim that both of these options will decrease the number of options available for the customers.

The New York Times report that these changes despite their popularity is supposed to improve the image of America’s excessive consumption of natural resources. Because if the rising international scrutiny on the environmental policies of America, these newly introduced standards are expected to increase America’s negotiation position at the future UN’s conference on climate.

One would ask a question that whether these sweeping changes on the fuel efficiency and emissions standards of America will change the direction of American auto industry.

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