Obama to Announce Stricter Emission Standards for Autos

WASHINGTON, May 18, 2009 -- President Obama will issue the toughest emission and mileage standards in history for new cars sold in the United States on Tuesday, in a move environmentalists hail as the first step ever by the U.S. government to curb global warming.

In sweeping new changes, the White House will order automakers to significantly increase the gas mileage of the cars they make, and significantly reduce the amount of pollution they emit.

Sources familiar with the changes tell ABC News the new national Corporate Average Fuel Economy (CAFE) standard will require an average of 35 miles per gallon for cars and light trucks by the year 2016 -- four years ahead of schedule.

For the current model year, 2009, the average fuel efficiency (combined) is 25 mpg.

Car companies will also be forced to cut the amount of greenhouse gas emissions in new cars by about 25 percent.

The plan will, over the lifetime of the new vehicles, reduce emissions of greenhouse gases by 900 million metric tons -- comparable to taking 177 million cars off the road or shutting down 194 coal-fired power plants, a senior administration official said.

Dan Becker, director of the Safe Climate Campaign, said he welcomes the changes.

"These decisions mean that we will guzzle less gas, save money at the pump, pollute a lot less," Becker said. "And that the automakers in the United States will be forced to finally compete with the Japanese manufacturers who have been beating them in the marketplace."

The plan comes ahead of the Memorial Day holiday, the traditional start of the summer driving season, and as fuel prices are beginning to spike again. The Department of Energy reported today that the national average price for a gallon of gas rose to $2.31, up 7 cents in the past week.

Although the auto industry has long opposed these moves initiated through administrative rulemaking, this time American and major foreign auto companies are on board, working with the Obama administration on setting the new national standards.

In fact, executives from several companies will be at the White House when the announcement is made Tuesday.

Jeremy Anwyl, CEO of Edmunds.com, an automotive Web site, says one reason is because automobile makers face a tangle of different state regulations that will now be replaced by a single national standard.

"If you take a look at the marketplace today, we have different fuel economy and environmental standards in California versus the federal government and if you're a car company, that makes it hugely complicated, because you have to build different versions of the same vehicle, depending on where you plan to market," Anwyl said.

The total increased cost of manufacturing the average 2016 vehicle will be $1,300. The EPA estimates consumers will make that money back within 3.2 years, due to savings on fuel, a senior administration official said.

After Federal Bailout, Car Companies Unable to Object

But Patrick Michaels, senior fellow in Environmental Studies at the Cato Institute, says car companies that are critical of the White House's move are not in much of a position to object, after the federal bailout of Chrysler and GM.

"U.S. automakers used to be U.S. automakers. Now they're owned in part by the government. So the government can tell them pretty much what they want them to produce," Michaels said.

Also on board is California Gov. Arnold Schwarzenegger and auto-friendly Michigan Gov. Jennifer Granholm.

Schwarzenegger has been leading the push for more environmentally friendly cars, by imposing tough standards on all new cars sold in California.

Others attending the announcement Tuesday will include officials from the Department of Transportation, which is tasked with handling the new CAFE standards, and from the Environmental Protection Agency, which will handle the new greenhouse gas emission standards.

Environmentalists say the technology is already there to make cars to meet the new requirements. As evidence, they point to Japanese cars that already exceed these standards.

"The American manufactures know how to do it. They can and they will. This is going to force them to do it," Becker said.

Consumers will still be able to choose what kind of car they want to drive -- but those cars will just be fuel efficient.

"All companies will be required to make more efficient and cleaner cars," a senior administration official told ABC News. "We did that my proposing individual standards for each class size of vehicles. This has the affect of preserving consumer choice, you can continue to buy any particular car you'd like."