Last month one of the most impressive changes in our nation’s energy policy was put in place when President Obama signed into law the new Corporate Average Fuel Efficiency (CAFE) standards for cars and light trucks sold in the U.S. Cars must average 54.5 miles per gallon by the year 2025. Those who still want a low-mileage vehicle can buy one, but the overall average of the fleet of new vehicles sold must meet the new standards.
Importantly, the auto companies, organized labor, and environmental groups stood side-by-side to endorse the President’s support of the new standards. Business does not like surprises, and the new standards circumscribe the playing field for the next decade.
The past few years of high gasoline prices have silenced most of the critics who argue that high prices will not deter gasoline consumption by U.S. drivers. In fact, gasoline consumption has declined significantly in tandem with rising prices during the past five years.
Higher fuel efficiency standards mean that the average driver can go further on her gasoline dollar. And, if a driver still needs a large, heavy vehicle, he can buy one.
The newly adopted CAFE standards will help free our nation of excessive dependence on foreign oil, lower the outflow of U.S. cash to foreign governments, and lower our emissions of carbon dioxide to the atmosphere.
U.S. car companies believe that CAFE standards will help them sell more cars in an increasingly competitive global market.
Outside of big oil, with this legislation, I can’t think of any losers.
Photo, taken on March 26, 2012, courtesy of Toyota Motor Europe via Flickr.