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Why Americans Remain Cynical Of Their Gov’t: Take Obama’s New Fuel-Efficiency Deal

by on Friday, July 29, 2011 at 4:11 pm EDT in Environment, Politics

Today, President Obama (joined by 11 auto executives) declared a huge victory on the environmental front, as he and the auto industry sealed a deal that would double fuel-efficiency standards over an eight-year period, not to begin until 2017.  He said this agreement should serve as a model to leaders in Washington, because it shows that when competing groups put aside their differences and work together, they can “achieve something important and lasting for the country”.

Here’s President Obama Discussing The Deal:


The Washington Post outlines the specifics of the deal:

The agreement would require U.S. vehicle fleets to average 54.5 miles per gallon or 163 grams per mile of carbon dioxide equivalent by 2025, which represents a 50 percent cut in greenhouse gases and a 40 percent reduction in fuel consumption compared with today’s vehicles, according to sources briefed on the matter. […]

It would require a 5 percent annual improvement rate for cars between 2017 and 2025. Light trucks would be required to have a 3.5 percent yearly efficiency improvement between 2017 and 2021, rising to 5 percent between 2022 and 2025, according to the sources …

Michael Grunwald from Time Magazine’s ‘The Swampland blog‘ gives it a thumbs up, bellowing “Gas Guzzlers Be Gone!”:

It’s a big victory in the fight to reduce our foreign oil addiction, our carbon emissions, and our gasoline costs—and while Obama had sought a slightly bigger victory, the modest concessions he made to the automakers were a small price to pay to avoid a nasty fight in a dysfunctional Congress.

But Climate Progress is now confirming that this deal contains a “technology re-opener”. And Stephen Lacey of Climate Progress breaks down how this insidious devil-within-the-details could effectively allow the auto industry a way out:

But the details of the agreement may weaken the standards and allow automakers to delay action on improving the efficiency of America’s fleet of vehicles.

At issue is a “technology re-opener” that allows auto manufacturers to fight the standards after 2021 in the hopes that they can re-negotiate rules with a future administration that may be more lenient on the industry. The re-opener potentially gives auto companies an incentive not to develop technologies immediately so they can argue down the road that the standard can’t be met.

Despite the rise in value for used fuel-efficient cars and surveys showing two thirds of Americans want more efficient automobiles — and the inevitably of rising gasoline prices because of peak oil — American manufacturers say they are skeptical that consumers will buy them. Hence, the inclusion of a re-opener that gives auto companies a “self destruct” mechanism if they don’t think the standard is working — or if they decide to make it unworkable themselves.

As such Obama will likely get his political victory for having cut a deal to usher in “aggressive fuel-efficiency standards”. But in reality, he gave the auto-industry a HUGE incentive to get on board: a clause that allows them to evade these same “aggressive fuel-efficiency standards”.

How’s that for political theater?

Brad Plumer, writing for Ezra Klein’s blog at Washington Post, noted another obstacle to achieving these standards. He revealed that the very tests the industry uses to measure mileage are outdated and highly flawed:

The cars that actually drive on the road rarely achieve the mileage advertised. The laboratory tests used to measure mileage—testers run the cars on giant treadmills—were largely designed in the 1970s for less powerful cars that didn’t have air-conditioning. Jim Kliesch, a senior engineer at the Union of Concerned Scientists, told me that a sticker mileage of 54.5 mpg, for instance, would likely translate into about 39 mpg on the road. (See here for a wonkier analysis.)

Another criticism being leveled at the President is directed towards the approach he pursued for cutting this deal: He chose closed-door meetings with the auto industry, and in a highly political fashion (the Administration conducted them in lieu of the appointed — and Senate-confirmed — agency experts tasked to handle these very issues).

Amy Sinden from The Center for Progressive Reform slammed the Administration’s deal-making as an attempt to short-circuit the lawful process for setting these standards:

If the level of improvement is set based on a political deal, then the agencies will be left to come up with a justification after the fact. But President Obama nominated, and the Senate confirmed, the heads of these agencies to carry out a mission to protect the American people from air pollution and to buffer them from volatile gas prices. The rulemaking process should be driven by law. And the law says that the agencies should select a level of stringency that is the maximum feasible, economically practicable level that both reduces the air pollution that endangers public health and welfare and supports the need of the nation to conserve energy. […] 

The 2017-2025 standards are being set well in advance to give the auto industry time to meet goals that will transform the industry. The concessions the auto industry reportedly secured in the deal with the White House – a carve-out for pickup trucks, and a review of the technology and economics assumptions in 2018 – are exactly the kind of issues the automakers should suggest to the agencies as part of the comment process. These are decisions for the experts running the agencies, not political compromises doled out by the White House.

The deal still has a ways to go before Obama can actually claim it as a victory. It will need to go through a public comment period and a review by the Office of Management and Budget.

But it is becoming clear to me that whenever the corporate profiteers and President Obama huddle away behind closed doors to tackle the country’s biggest problems — as was done for health care reform — the end result ultimately proves to be a HUGE victory for these entrenched industries, and little more than a symbolic ‘victory’ for the public at large.