Analysis of New Vehicle Standards

WASHINGTON - New proposed vehicle standards announced by the Obama administration
today represent the largest increase in fuel economy in three decades,
according to the Union of Concerned Scientists (UCS).

The new standards, which were released by the Environmental
Protection Agency (EPA) and the Department of Transportation (DOT),
would boost the fleetwide fuel economy of new vehicles sold in the
United States to 34.1 miles per gallon by model year 2016. The
standards also would set the first national tailpipe heat-trapping
emissions standard for vehicles at 250 grams per mile, nearly 30
percent less than the emissions produced by today's average new vehicle.

Following a 60-day public comment period, EPA and DOT are required to finalize the standards by March 31, 2010.

"You have to go back to the days of disco to see a fuel economy
improvement like this," said Jim Kliesch, a senior engineer in the UCS
Clean Vehicles Program. "If finalized, these proposed standards will be
the biggest increase in fuel economy in more than 30 years. That's good
news for the environment, consumers' wallets, and our nation's energy
security."

UCS calculates that the proposed standards would:

— reduce U.S. oil consumption by about 1.3 million barrels per day
by 2020, nearly as much as we currently import from Saudi Arabia;

— cut global warming emissions by 217 million metric tons in 2020,
the equivalent of taking nearly 32 million of today's cars and light
trucks off the road that year; and

— save drivers $26 billion in 2020 based on a gas price of $2.25 per
gallon, even after they pay the cost of vehicle technology
improvements. (If gas prices spike to $4 a gallon again, the new
standards would save drivers $60 billion in 2020.)

Patricia Monahan, director of UCS's California office, noted that
the agreement preserves California's authority under the Clean Air Act
to continue setting the nation's strongest air pollution standards for
vehicles.

"California and other states laid the groundwork for federal
action," Monahan said. "Instead of setting up roadblocks, President
Obama is joining forces with states to combat global warming."

While the proposal would set strong new standards, it could create
new loopholes that would undermine the effectiveness of the program,
UCS experts cautioned. For instance, the proposal includes flexibility
mechanisms that the industry has used in the past to avoid meeting
projected standards. Meanwhile, another provision could underestimate
the heat-trapping emissions produced by certain vehicle technologies,
including "zero-emission" vehicle technologies such as plug-in hybrids
and electric vehicles. The proposed rules, for example, do not count
heat-trapping emissions associated with generating electricity to
charge those vehicles.

"Automakers have a history of relying on loopholes instead of better
technology," said Brendan Bell, a federal policy analyst in UCS's Clean
Vehicles Program. "The technology exists today to safely boost fuel
economy and reduce emissions. It's time to take that technology and
deploy it across the fleet."

Finally, the new standards use an attribute-based system that
creates different fuel economy requirements for vehicles based on their
size. Unfortunately, DOT continues to utilize a flawed safety analysis
based on outdated assumptions that also ignores the safety benefits of
an attribute-based system. Scientific and industry research indicates
that vehicle size and design, not weight, are the most relevant
attributes associated with improved safety. However, the flawed
analysis focuses on weight as the most significant safety factor.
Additionally, the new attribute-based standards require smaller
vehicles to meet more stringent standards, encouraging manufacturers to
utilize efficient technologies, including lighter materials, while
holding vehicle size constant—a strategy for meeting the standards that
actually enhances safety.