The Center for Climate and Energy Solutions seeks to inform the design and implementation of federal policies that will significantly reduce greenhouse gas emissions. Drawing from its extensive peer-reviewed published works, in-house policy analyses, and tracking of current legislative proposals, the Center provides research, analysis, and recommendations to policymakers in Congress and the Executive Branch. Read More
Today the federal government issued and that enjoy broad support from , , , and . Why is everyone so happy, when the idea of regulation is anathema to so many? It’s both because of what the rules do, and how they do it.
As a result of these new standards, we will see the fuel economy of the average new vehicle increase by up to 90 percent by 2025. That will save each car buyer thousands of dollars in fuel costs. We’ll also see greenhouse gas emissions from the average new vehicle decrease 40 percent.
This represents the single largest step ever by the federal government aimed at reducing the carbon emissions that are warming the planet.
The new rules achieve these important goals by setting tough environmental and energy objectives, but leaving it to businesses to innovate to achieve them. This flexibility means that consumers will still have a wide choice of vehicles in the marketplace.
Statement of Eileen Claussen
President, Center for Climate and Energy Solutions
Aug. 28, 2012
This is a win all around - it saves consumers money, reduces dependence on foreign oil, and is the biggest step ever by the United States aimed at reducing carbon emissions.
While Congress remains utterly gridlocked on energy and climate issues, the Obama administration and the auto industry have proven that real progress is still possible. Working together, they've crafted a common-sense solution that taps technological innovation to benefit both the economy and the environment. Credit also goes to the state of California, for paving the way, and to the regulatory flexibility afforded by the Clean Air Act.
This is a victory for climate protection, but only one of the major steps needed to dramatically reduce our carbon emissions. Next we must tackle emissions from power plants and other stationary sources. The climate benefits may not be as easy to see as lower prices at the pump, but are no less real.
Recent extreme weather and the worst drought in half a century illustrate the costly toll of increased warming. Climate change is no longer a prediction - it is here and now. As the costs become more pronounced, we will hopefully see the strong public support and political leadership needed to mobilize an effective across-the-board response.
For more information, view our Federal Vehicle Standards page.
Contact: Laura Rehrmann, 703-516-0621, email@example.com
August 22, 2012
Contact: Laura Rehrmann, 703-516-0621, firstname.lastname@example.org
2013 Climate Leadership Awards Application Period Now Open
Apply NOW, due October 12
Calling national attention to exemplary leadership in response to climate change, the Climate Leadership Awards program is seeking its 2013 crop of corporate, organizational and individual leaders. Officially opening its application period, U.S. EPA and its three NGO partners -- The Climate Registry (The Registry), the Center for Climate and Energy Solutions (C2ES), and the Association of Climate Change Officers (ACCO) -- are now accepting applications for 2013 awards through October 12, 2012. EPA’s Climate Leadership Awards webpage details the application process.
Climate Leadership Award winners will be publicly honored in early 2013 at an awards gala in conjunction with the Climate Leadership Conference to be held in Washington, DC. Awards criteria have been updated, recognizing leadership in the following categories:
- Excellence in Greenhouse Gas Management (Goal Setting Certificate)
Recognizes organizations that publicly report and verify corporate GHG inventories and publicly set aggressive GHG emissions reduction goals.
- Excellence in Greenhouse Gas Management (Goal Achievement Award)
Recognizes organizations that publicly report and verify corporate GHG inventories and achieve aggressive GHG emissions reduction goals.
- Supply Chain Leadership Award
Recognizes organizations that have their own comprehensive GHG inventories and aggressive emissions reduction goals and can demonstrate they are at the leading edge of managing GHGs in their organizational supply chains.
- Organizational Leadership Award
Recognizes organizations that not only have their own comprehensive GHG inventories and aggressive emissions reduction goals, but also exemplify leadership both in their internal response to climate change and through engagement of their peers, competitors, partners, and supply chain.
- Individual Leadership Award
Recognizes individuals exemplifying extraordinary leadership in leading their organizations’ response to climate change and/or affecting the responses of other organizations.
Please direct questions as follows:
- Awards program: questions@ClimateLeadershipAwards.org
- Climate Leadership Conference: questions@ClimateLeadershipConference.org
Don't miss out on this unique opportunity to receive government recognition for your climate leadership and highlight your achievements and competitive edge to key stakeholders.
Dates to Remember
October 12, 2012
Deadline for 2013 CLA applications
CLA winners notified
Climate Leadership Awards Gala and Conference (dates to be announced shortly)
The Center for Climate and Energy Solutions (C2ES) is an independent non-profit, non-partisan organization promoting strong policy and action to address the twin challenges of energy and climate change. Launched in November 2011, C2ES is the successor to the Pew Center on Global Climate Change.
The Candidates on Climate and Energy: A Guide to the Key Policy Positions of President Obama and Governor Romney
This voter guide outlines the records and positions of President Barack Obama and former Gov. Mitt Romney on key climate and energy issues. A side-by-side summary at the top links to more details below.
The nonpartisan guide is based on an examination of the candidates' actions in office, public statements, campaign materials, news reports, and other publications. It is offered to inform the electorate and contribute to public debate about the nation's pressing climate and energy issues. As a nonpartisan organization, the Center for Climate and Energy Solutions (C2ES) does not endorse candidates.
C2ES is an independent, non-profit, non-partisan organization promoting strong policy and action to address the twin challenges of energy and climate change. Launched in November 2011, C2ES is the successor to the Pew Center on Global Climate Change.
Has consistently recognized scientific evidence of human-induced climate change.
As governor and 2008 presidential candidate, recognized the scientific evidence of human-induced climate change.
Leading up to the 2012 presidential primaries, questioned whether human activity contributes to climate change.Recently acknowledged that human activity contributes to global warming.
As senator, co-sponsored the McCain-Lieberman greenhouse gas cap-and-trade bill.
As president, supported the Waxman-Markey cap-and-trade bill that passed the House of Representatives in 2009.
While he was governor, Massachusetts worked with other Northeastern states to develop a regional greenhouse gas cap-and-trade program, but ultimately did not join.
Currently opposes greenhouse gascap-and-trade.
His Department of Transportation set standards nearly doubling fuel economy of passenger vehicles by 2025, and the first standard for medium- and heavy-duty vehicles.
While he was governor, Massachusetts adopted California's vehicle emission standards.
Currently says that higher fuel economy standards hurt domestic manufacturers.
While he was governor, Massachusetts set limits on greenhouse gas emissions from existing power plants.
Currently opposes EPA's regulation of greenhouse gas emissions for vehicles and stationary sources.
EPA set limits on power plant emissions of mercury, acid gases, sulfur dioxide, and nitrogen oxides, likely leading to the retirement of some coal-burning plants, indirectly reducing greenhouse gas emissions.
While he was governor, Massachusetts enforced limits on power plant emissions of mercury and other pollutants.
Currently opposes EPA's regulation of non-greenhouse gas air pollutants.
As senator and presidential candidate, supported proposals for a federal renewable energy standard.
As president, has proposed a clean energy standard doubling by 2035 the amount of electricity from low-carbon sources (including renewable sources, nuclear power, and coal with carbon capture and storage, with half credit for natural gas).
As governor, called for the establishment of a new statewide renewable energy standard.
Currently opposes the use of a federal mandate for renewable energy.
Supports loan guarantees, grants, and tax credits for the production of renewable energy.
Signed the Recovery Act, which included billions in government support for clean energy sources.
Allowed development of clean energy on public lands.
Supports extension of the wind energy production tax credit.
As governor, used state funds to provide venture capital, loans, and management assistance to renewable energy start-up companies.
Currently opposes government acting as venture capitalist for renewable energy.
Would redirect clean energy spending toward basic research.
Would allow renewables as part of broader energy development of federal lands.
Would not extend the wind energy production tax credit beyond 2012.
Participated in the 2009 Copenhagen climate summit, where he pledged to reduce U.S. emissions 17% below 2005 levels by 2020.
Agreed to enter negotiations for a new climate agreement in 2015 "applicable to all," including major developing economies.
As candidate in 2008, warned against international climate agreements that do not include major developing economies.
Has set a goal of reducing net oil imports by half by 2020 by expanding domestic production and by reducing consumption through alternative fuels and greater efficiency.
Has proposed a goal of achieving North American energy independence by 2020 by boosting domestic production and ending imports from countries other than Canada and Mexico.
Would establish a North American energy partnership to facilitate cross-border energy activity.
In November 2011, the State Department delayed a decision regarding the Canadian oil sands pipeline until after the 2012 election.
In January 2012, after Congress forced a decision, the State Department denied the permit, but left door open for alternative route.
In July 2012, the Army Corps of Engineers approved the southern portion of the pipeline.
Has criticized Obama for delaying the decision and said he would approve the pipeline on the first day in office.
Would establish activity, and fast-track regulatory approval for cross-border pipelines and other infrastructure.
Offered $8 billion in loan guarantees for a new nuclear power plant in Georgia.
Eliminated funding for the Yucca Mountain nuclear waste repository, and has directed Department of Energy to investigate other potential sites.
Supports the expansion of nuclear power.
Has criticized Obama for ending funding for Yucca Mountain nuclear waste repository.
Points to increased oil and gas production on onshore and offshore federal lands while in office. Issued a temporary offshore drilling moratorium in response to the 2010 Gulf of Mexico oil spill.
Supports exploration and drilling in the Arctic Ocean.
Favors expedited permitting of federal leasing for oil and gas production, both onshore and offshore.
Supports increasing exploration and drilling in the Arctic Ocean.
Would give states authority to oversee energy development on most federal lands.
Would accelerate offshore leasing and set production targets.
Wants to end $4 billion in annual tax incentives for oil and gas companies, and shift the savings to clean energy.
Supports maintaining tax incentives for oil companies.
The U.S. National Academy of Sciences has confirmed previous scientific findings that human-induced climate change is underway and that avoiding the worst consequences of global warming will require significant reductions in greenhouse gas emissions. Nevertheless, there remains public controversy over the reality of climate change and about a quarter of the U.S. public is dismissive or doubtful of climate science.
Obama agrees with the broad consensus among climate scientists that climate change is real, that human activity is contributing to it, and that it poses significant risks.
In a November 2008 address to the Bi-Partisan Governors Climate Summit, Obama said, “Few challenges facing America – and the world – are more urgent than combating climate change. The science is beyond dispute and the facts are clear. Sea levels are rising. Coastlines are shrinking. We’ve seen record drought, spreading famine, and storms that are growing stronger with each passing hurricane season. Climate change and our dependence on foreign oil, if left unaddressed, will continue to weaken our economy and threaten our national security.”
In an April 2012 interview, Obama said, “it's been easy for the other side to pour millions of dollars into a campaign to debunk climate-change science. I suspect that over the next six months, this is going to be a debate that will become part of the campaign, and I will be very clear in voicing my belief that we're going to have to take further steps to deal with climate change in a serious way” [Rolling Stone, April 2012].
In his 2010 book, No Apology: The Case for American Greatness, Romney wrote, “I believe that climate change is occurring — the reduction in the size of global ice caps is hard to ignore. I also believe that human activity is a contributing factor. I am uncertain how much of the warming, however, is attributable to factors out of our control.”
In June 2011, responding to a voter’s question at a New Hampshire town hall, Romney said, “I don’t speak for the scientific community, of course, but I believe the world’s getting warmer. I can’t prove that, but I believe based on what I read that the world is getting warmer. And number two, I believe that humans contribute to that. I don’t know how much our contribution is to that, because I know that there have been periods of greater heat and warmth in the past, but I believe we contribute to that. And so I think it’s important for us to reduce our emissions of pollutants and greenhouse gases that may well be significant contributors to the climate change and the global warming that you’re seeing” [C-SPAN at the 22:48 mark, June 3, 2011].
In August 2011, responding to a voter at another New Hampshire town hall, Romney said, “I think the Earth is getting warmer. I think humans contribute to that. I don’t know by how much. It could be a little. Could be a lot. I don’t know by how much. And so I’m not willing on that basis to spend trillions of dollars trying to stop in America for instance, the emissions of CO2 [carbon dioxide]” [New Hampshire Primary 2012: Green, August 27, 2011].
In October 2011, Romney told an audience in Pittsburgh, Pa. “My view is that we don't know what's causing climate change on this planet. And the idea of spending trillions and trillions of dollars to try to reduce CO2 emissions is not the right course for us” [CBS News, October 28, 2012].
In September 2012, responding to a candidate survey, Romney said, “I am not a scientist myself, but my best assessment of the data is that the world is getting warmer, that human activity contributes to that warming, and that policymakers should therefore consider the risk of negative consequences” [ScienceDebate 2012, last modified, September 4, 2012].
Cap-and-trade is a market-based policy for reducing greenhouse gas emissions. In a cap-and-trade system, the government sets a cap on greenhouse gas emissions, such as carbon dioxide and methane, and issues a limited number of emission “allowances.” Emitters are required to hold one allowance for each ton of emissions, and are allowed to buy and sell allowances. In this way, government establishes an environmental objective, and industry, through the marketplace, decides the most cost-effective way to achieve it.
Obama long supported establishing a cap-and-trade system to reduce greenhouse gases. As a senator, Obama co-sponsored the 2005 and 2007 McCain-Lieberman Climate Stewardship bills, which would have created a national greenhouse gas cap-and-trade program.
While running for president in 2008, Obama called for an 80 percent reduction of U.S. greenhouse gas emissions below 1990 levels by 2050 under a cap-and-trade program. As president, Obama spoke favorably about the comprehensive climate and energy bill introduced by U.S. Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., which largely reflected Obama’s approach [Weekly Address: President Obama Says Progress on Clean Energy and Healthcare Reform Will Lay New Foundation, May 16, 2009]. The Waxman-Markey bill passed the House of Representatives in July 2009, but did not pass the Senate. Some supporters faulted the White House for giving higher priority to health care reform and financial market reforms [Lizza, Ryan. "As the World Burns." The New Yorker 86, no. 31 (Oct 11, 2010): 70-70].
In October 2011, Obama said he needed another term to fulfill his campaign promises, including “a serious energy policy that finally deals with climate change in a serious way” [Remarks by the President at a Campaign Event, October 26, 2011].
While governor of Massachusetts, Romney worked with several other northeastern governors to develop a regional greenhouse gas cap-and-trade program known as the Regional Greenhouse Gas Initiative (RGGI). A few days before RGGI was to launch, however, Romney decided that Massachusetts would not join because the program did not include a limit on the price of greenhouse gas allowances [Beth Daley and Scott Helman. "Romney Doubts seen Delaying Emissions Pact." Knight Ridder Tribune Business News, Nov 22, 2005].
In his 2010 book, No Apology, Romney wrote that cap-and-trade is “an energy tax, disguised in the sheep’s clothing of market terminology. And it is an energy tax that would have little or no effect on global warming.”
Romney’s 2011 jobs plan describes cap-and-trade “as a complex scheme for allowing industries to trade the right to emit greenhouse gases [that] would have been a crippling blow to the U.S. economy…” [Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, 2011].
The federal government has set fuel economy standards for passenger vehicles (cars and light-duty trucks) for decades. Congress established Corporate Average Fuel Economy (CAFE) standards in 1975, in the wake of the Arab oil embargo, as a way to reduce U.S. reliance on oil imports. From model years 1978 to 1985, Congress raised fuel economy standards for passenger vehicles from 15.3 mpg to 25 mpg. Standards remained largely unchanged until enactment of the Energy Independence and Security Act of 2007.
In April 2010, as part of an agreement with major automakers, the Department of Transportation and Environmental Protection Agency issued a joint regulation raising fuel economy standards for new passenger vehicles to 35.5 mpg by 2016, and setting the first greenhouse gas standards for vehicles. A second rule proposed in November 2011 and expected to be finalized soon, would be the biggest step ever aimed at reducing U.S. carbon emissions. It would raise the fuel economy of the typical new car as much as 90 percent, to 50 mpg or more, by 2025.
Obama’s campaign website says the new standards for passenger vehicles “will save families roughly $8,200 at the pump per vehicle by 2025, and also cut in half vehicles’ greenhouse gas pollution.”
In August 2011, the Obama administration set new CAFE standards for medium- and heavy-duty vehicles. The standards, covering model years 2014-2018, are expected to reduce fuel consumption from those vehicles by 20 percent.
While he was governor, Massachusetts adopted California’s vehicle emission standards, requiring cars sold after 2015 to emit 30 percent less carbon dioxide and lower levels of toxic and smog-forming pollutants than allowed by federal standards [Levenson, Michael and Robert Gavin. "Romney Singing New Tune, Sweeter to Detroit's Ears." Boston Globe, Jan 15, 2008]. The Romney administration called adoption of the California standards a "significant step in cleaning our air."
Romney’s 2008 presidential campaign said that “it makes more sense to have one set of federal rules to address CO2 emissions from vehicles rather than a patchwork of different state regulations” [Hyde, Justin. "Romney Clarifies: He's Not Favoring Calif. Car Limits." McClatchy - Tribune News Service, Jan 31, 2008].
In February 2012, speaking generally about federal CAFE standards, Romney said, “The government put in place CAFE requirements that were disadvantageous for domestic manufacturers. We need to get the government out of these companies’ hair and let them go to work to become competitive — not only in the U.S. but globally. The world is changing in the auto industry and we’ve got to get these companies on a global footing as opposed to kowtowing to Washington.” [MittRomney.com, February 23, 2012].
Most regulation of pollution from stationary sources (e.g., power plants and factories) in the United States is done through a process in which the government issues a permit to a given facility limiting the amount of pollution it can release. Congress has granted the Environmental Protection Agency (EPA) authority to regulate a wide range of pollutants through several laws, including the Clean Air Act. Many state environmental agencies have authority under state law to regulate pollution more strictly than EPA.
In a 2007 decision, Massachusetts v. EPA, the Supreme Court ruled that EPA has authority under the Clean Air Act to regulate greenhouse gases, which include carbon dioxide, and required it to review the state of scientific knowledge to determine whether greenhouse gases, by contributing to climate change, endanger public health and welfare. The resulting Endangerment Finding, begun under the Bush administration and finalized under the Obama administration, triggered a series of subsequent steps by EPA to regulate greenhouse gas emissions.
Following the Endangerment Finding, EPA set greenhouse gas standards for new cars (as discussed above) and laid out a roadmap for regulating greenhouse gases from stationary sources such as power plants and factories. In November 2010, EPA released guidance to be used by states in implementing “best available control technology” (BACT) requirements for greenhouse gas emissions from major new or modified stationary sources. Under the BACT guidance, facilities are generally required to use the most energy-efficient technologies available, rather than install particular pollution control technologies.
In March 2012, the EPA invited public comment on a proposed Carbon Pollution Standard for New Power Plants under the New Source Performance Standard provision of the Clean Air Act. The proposal would limit greenhouse gases at a new power facility to the levels generated by a highly-efficient natural gas-burning plant, which emit fewer greenhouse gases than coal-burning plants, effectively preventing the construction of any new coal-burning plant that does not employ carbon capture-and-storage technology. The standard is not expected to be finalized before the election.
Shortly after deciding to keep Massachusetts out of the Regional Greenhouse Gas Initiative (RGGI) in December 2005, Gov. Romney announced plans to enforce a 2001 law to limit CO2 emissions from the six largest and oldest power plants in Massachusetts. The limit was replaced in 2008 when Massachusetts joined RGGI under Romney’s successor, Deval Patrick.
Romney’s August 2012 energy plan describes EPA’s proposed Carbon Pollution Standard as ensuring that “a coal power plant will never be built again in the United States” [The Romney Plan for a Stronger Middle Class: Energy Independence, 2012].
Romney favors rescinding EPA’s authority to regulate greenhouse gases under the Clean Air Act. His campaign website lists “amend[ing] the Clean Air Act to exclude carbon dioxide from its purview” as part of his plan for streamlining regulations to promote development of oil and gas reserves.
Regulation under the Clean Air Act of non-greenhouse gas air pollutants, such as mercury, sulfur dioxide (SO2), and nitrogen oxides (NOX), is expected to lead to the retirement of some older coal-burning power plants. Because they are likely to be replaced by natural gas-burning plants, which emit much less carbon dioxide per unit of electricity, these regulations are expected to result indirectly in significant CO2 reductions. (See our EPA Climate and Energy action page for an overview of pertinent EPA regulations.)
In July 2011, the Environmental Protection Agency (EPA) issued the Cross-State Air Pollution Rule (CSAPR) requiring the reduction of SO2, NOX, and particulates from power plants. These air pollutants can cross state borders and make it harder for states downwind of polluting sources to maintain healthy levels of air quality. The rule was overturned in August 2012 by the U.S. Court of Appeals for the District of Columbia.
In January 2010, EPA proposed tightening the National Ambient Air Quality Standards (NAAQS) for ozone set in 2008, but it withdrew the proposal in September 2011. Obama said he preferred to wait until 2013, when the Clean Air Act mandates a revision [Statement by the President on the Ozone National Ambient Air Quality Standards, September 2, 2011].
In December 2011, EPA issued regulations to control emissions of mercury and other toxic pollutants from power plants [Presidential Memorandum -- Flexible Implementation of the Mercury and Air Toxics Standards Rule, December 21, 2011].
While he was governor, the Massachusetts Department of Environmental Protection (DEP) denied a two-year delay in implementing air pollution regulations at a PG&E power plant. In announcing the action at a February 2003 press conference, Romney said that “in order to protect the public health,” he would enforce the regulations “without compromise” [Romney, Healey Enforce Power Plant Regulations DEP denies PG&E request for two-year delay, February 6, 2003].
As a candidate for president, Romney has accused the Obama administration of “waging war on the entire coal industry” with “excessive regulations” that could drive up energy prices while destroying millions of jobs [Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, 2011].
An “electricity portfolio standard” sets requirements for the percentage of electricity demand that must be met via qualified energy resources — requiring, for example, that 25 percent of electricity be from renewable sources by 2025. A majority of states have some type of electricity portfolio standard, though there is wide variation among them. Some states have “renewable energy standards” (RES), which can be met only with renewable energy; others have “clean energy standards” (CES), which also allow other types of low-emitting energy, such as nuclear power or coal with carbon capture and storage.
As senator, Obama supported bills that would have established a national renewable energy standard. As a candidate for president in 2008, Obama favored an RES of 25 percent by 2025. As president, Obama supported the Waxman-Markey climate bill, which included an efficiency and renewable electricity standard of 20 percent by 2020. In his two most recent State of the Union addresses, Obama has called for a CES that would double clean energy generation to 80 percent by 2035, with renewable sources, nuclear power, and coal with carbon capture and storage qualifying as “clean energy,” and natural gas receiving a half credit [State of the Union 2011, State of the Union 2012]. A bill to enact the president’s proposal was introduced in the Senate, but no action is foreseen.
As governor, Romney called for the establishment of a new statewide RES of 20 percent by 2025 [Massachusetts Climate Protection Plan, 2004].
As a presidential candidate, Romney has not taken an explicit position on a renewable energy standard or clean energy standard. In June 2012, an adviser described Romney as “a supporter of renewable energy, as long as it's anything that would be economically competitive… What you won't see are mandates or taxes or regulations that interfere with economic activity” [Los Angeles Times, June 13, 2012] [emphasis added]. Both an RES and a CES are mandates.
All sources of energy – fossil fuels, nuclear power, and renewable energy – receive some form of federal support, whether as a grant, loan, loan guarantee, or tax credit, and whether for research, development, demonstration, or deployment. Recent controversy has focused on the failure of some companies that received federal loan guarantees funded by the 2009 economic stimulus package, including the solar manufacturer Solyndra, in which the George Kaiser Family Foundation held a 35.7-percent stake. Kaiser was a contributor to Obama’s 2008 campaign.
The American Recovery and Reinvestment Act (ARRA), the economic stimulus package passed in February 2009, included more than $90 billion in government investment and tax incentives for clean energy sources. As of July 2012, the Department of Energy had awarded $35.8 billion in ARRA funds to support clean technologies such as carbon capture and storage, solar, wind, fuel cells, advanced batteries, and electric vehicles.
In March 2009, Interior Secretary Ken Salazar signed an order making renewable energy production on federal lands a top priority for the Department of Interior [Secretary Salazar Issues Order to Spur Renewable Energy Development on U.S. Public Lands, March 11, 2009]. Since 2009, Interior has approved 31 utility-scale renewable energy projects that will produce nearly 6,900 MWs of power [Renewable Energy Projects Approved Since the Beginning of Calendar Year 2009, last updated August 7, 2012].
In October 2011, speaking about the bankruptcy of Solyndra, which received $535 million in federal loan guarantees, Obama said, “Now, we knew from the start that the loan guarantee program was going to entail some risk, by definition. If it was a risk-free proposition, then we wouldn’t have to worry about it. But the overall portfolio has been successful. It has allowed us to help companies, for example, start advanced battery manufacturing here in the United States. It’s helped create jobs. There were going to be some companies that did not work out; Solyndra was one of them” [News Conference by the President, October 6, 2011].
In his January 2012 State of the Union address, President Obama announced that he was “directing [his] administration to allow the development of clean energy on enough public lands to power 3 million homes,” and that the Navy would purchase enough [clean energy] capacity to power a quarter of a million homes a year” [Remarks by the President in State of the Union Address, January 24, 2012].
The Recovery Act extended the Renewable Energy Production Tax Credit for up to three years. The production tax credit for wind is due to expire at the end of 2012. In May 2012, Obama called on Congress to extend the federal production tax credit for wind power and to expand the 48C Qualifying Advanced Energy Manufacturing Tax Credit for energy companies [President Obama Calls on Congress to Act on Clean Energy Tax Credits in “To Do List”, May 22, 2012].
Shortly after becoming governor, Romney said he would shift $24 million in the state’s Renewable Energy trust fund “to job-promoting investments and loans for renewable-energy start-up companies around the state,” and use $15 million to create a Green Energy Fund to “provide venture capital, loans, and management assistance to Bay State companies involved in energy production from solar, wind power, landfill gas, biomass, and other so-called green sources as an alternative to petroleum products and coal” [Howe, Peter J. "Romney Taps into `Green Power' Fund Says $24m Will Help Create Jobs, Finance Start-Ups." Boston Globe, Jan 23, 2003].
Romney’s 2011 jobs and economic plan says, “There is a place for government investment when time horizons are too long, risks too high, and rewards too uncertain to attract private capital. However, much of our existing energy R&D budget has been devoted to loan guarantees, cash grants, and tax incentives for projects that might have gone forward anyway. As president, Mitt Romney will redirect clean energy spending towards basic research. Government funding should be focused on research and development of new energy technologies and on initial demonstration projects that establish the feasibility of discoveries” [Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, 2011].
In October 2011, Governor Romney blogged on his campaign website that, “these loans [under the stimulus bill] are turning out to be historic opportunities to line the pockets of major campaign fundraisers… the U.S. economy is not struggling for lack of government spending. It is struggling for lack of competitiveness. Instead of President Obama's doomed strategy of creating jobs that are good for the environment, we need a strategy to create an environment that is good for jobs” [We Need An Environment For Jobs, October 24, 2011].
In February 2012, Romney told a technology trade association that “When they put $500 million into Solyndra, they thought they were encouraging solar energy in this country. They did the opposite. Because when they put $500 million into Solyndra, the other 100 entrepreneurs in America working on solar energy just lost any potential to get capital” [Wallstreet Journal, February 2012].
In July 2012, in a statement to The Des Moines Register, the Romney campaign said, he “will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits. Wind energy will thrive wherever it is economically competitive, and wherever private sector competitors with far more experience than the president believe the investment will produce results” [Lines now drawn on wind tax credit: Romney opposes it, Obama favors it, July 30, 2012].
Romney’s August 2012 energy plan calls for facilitating “private-sector-led development of new energy technologies,” while noting that “the federal government has a role to play,” including allowing renewable energy on federal lands, and “policies for expanding energy development [that] apply broadly to energy sources, from oil and gas exploration, to coal mining, to the siting of wind, solar, hydroelectric, and other renewable energy facilities” [The Romney Plan for a Stronger Middle Class: Energy Independence, 2012].
In 2009, world leaders negotiated the Copenhagen Accord, a voluntary agreement that for the first time established explicit climate pledges by all the world’s major economies, including China and other major developing countries. In 2011, the United States and other parties to the United Nations Framework Convention on Climate Change (UNFCCC) launched negotiations aiming for a new agreement in 2015 to take effect in 2020.
Obama participated in the Copenhagen summit, where he pledged to reduce U.S. emissions 17 percent below 2005 levels by 2020, and declared support for $100 billion a year in public and private finance to address climate change in developing countries [Remarks by the President at the Morning Plenary Session of the United Nations Climate Change Conference, December 18, 2009]. Two years later in Durban, U.S. negotiators agreed to launch a new round aiming for a new legal agreement in 2015 “applicable to all” UNFCCC parties.
In 2008, participating in a Republican presidential debate in Iowa, Romney said, “we call it global warming, not America warming. So let's not put a burden on us alone and have the rest of the world skate by without having to participate in this effort. It's a global effort” ["Republican Presidential Candidates Participate in a Debate Sponsored by the Des Moines Register." Political Transcript Wire, Dec 12, 2007].
As a presidential candidate in 2012, Romney has not addressed international climate agreements.
Net imports of oil peaked in 2005, and since then have declined from 60 percent to less than 50 percent of total U.S. consumption. Contributing factors include increased domestic production and reduced consumption due to vehicle fuel economy standards and renewable fuels. In 2011, 52 percent of net imports came from OPEC countries, more than one-third from Canada and Mexico (up more than 10 percent from 2005), and the remainder from other countries. The U.S. Energy Information Administration projects net imports will fall to 36 percent of total U.S. supplies in 2035.
In March 2011, Obama released the Blueprint for a Secure Energy Future outlining an all-of-the-above approach to energy – including a goal of reducing oil imports by one third by 2025 by increasing domestic oil production and reducing consumption through alternative fuels and greater efficiency [Remarks by the President on America's Energy Security, March 30, 2011].
In March 2012, the administration released a one-year progress report on the “Blueprint for Secure Energy Future” noting a 10-percent decrease in net imports of oil [The Blueprint for a Secure Energy Future: One-Year Progress Report, March 12, 2012].
In September 2012, in his address to the Democratic National Convention, Obama called for “cut[ting] our oil imports in half by 2020…” [“DNC 2012: Obama’s speech to the Democratic National Convention (Full transcript),” The Washington Post, September 6, 2012].
Obama’s campaign website says that, “Under President Obama, American oil production is at an eight-year high, and we are less reliant on foreign oil than at any time in the last 16 years.”
Romney’s August 2012 energy plan calls for achieving North American energy independence by 2020 by boosting domestic production and ending oil imports from countries other than Canada and Mexico. It also calls for a North American energy partnership, which includes establishing “a regional agreement to facilitate cross-border energy investment, infrastructure and sales” [The Romney Plan for a Stronger Middle Class: Energy Independence, 2012].
Keystone XL is a proposed expansion of TransCanada’s Keystone crude-oil pipeline system, which would increase the quantity of oil that can be imported from the Canadian oil sands to the United States. The Keystone XL pipeline is composed of two segments; the northern segment would run from Alberta, Canada to Steele City, Neb., and the southern segment would run from Cushing, Okla. through Texas to the Gulf of Mexico. The State Department is the federal agency with authority to approve the pipeline because it would cross the international border.
In November 2011, following a series of protests against the proposed pipeline, the State Department decided to delay its decision until at least 2013 to allow for further environmental review. At the time, Obama said, “Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood” [Statement by the President on the State Department's Keystone XL Pipeline Announcement, November 10, 2011].
In response, congressional Republicans attached a provision to the payroll tax cut extension passed in December 2011 mandating that the Obama administration make a decision about Keystone XL within 60 days.
In January 2012, the State Department rejected the Keystone permit, with Obama stating that “the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment" [Statement by the President on the Keystone XL Pipeline, January 18, 2012].
In March 2012, Obama voiced support for expediting the southern portion of the Keystone XL pipeline to expand pipeline capacity to refineries, and invited TransCanada to resubmit its application for that portion of the pipeline [Remarks by the President on American-Made Energy, March 22, 2012].
In July 2012, TransCanada received a final U.S. Army Corps of Engineers permit to begin construction of the 485-mile southern portion, which does not cross any international borders [Washington Post, July 26, 2012]
In April 2012, Obama told Rolling Stone that the reason “Keystone got so much attention is not because that particular pipeline is a make-or-break issue for climate change, but because those who have looked at the science of climate change are scared and concerned about a general lack of sufficient movement to deal with the problem” [Wenner, Jann S. "READY for the FIGHT." Rolling Stone no. 1156 (May 10, 2012): 42-49].
Romney criticized the January 2012 decision, and has said, “I will build that pipeline if I have to myself” [The Hill, April 20, 2012]. In May 2012, the Romney campaign started running ads saying , “Day One, President Romney immediately approves the Keystone pipeline, creating thousands of jobs that Obama blocked” [Day One, May 18, 2012].
Romney’s August 2012 energy plan calls for a fast-track regulatory approval processes for cross-border pipelines and other infrastructure [The Romney Plan for a Stronger Middle Class: Energy Independence, 2012].
Nuclear power provides about 20 percent of U.S. electricity. Nuclear energy is a source of carbon-free power but faces major challenges, including the lack of a repository for long-term disposal of radioactive waste. Yucca Mountain in Nevada was planned as the long-term disposal site for U.S. radioactive waste.
In September 2008, then Sen. Obama described nuclear power as an important part of the U.S. energy mix and any long-term strategy to address climate change. But he said the issues of nuclear security, waste storage and proliferation would need to be addressed before an expansion of nuclear power, and called for abandoning plans for Yucca Mountain. [Nature 455, 446-449 (2008) doi:10.1038/455446a, September 24, 2008].
In February 2010, Obama announced $8.3 billion in loan guarantees for construction of two nuclear reactors in Georgia – the first new nuclear plants in the U.S. in three decades. Obama also proposed tripling the loan guarantees available for nuclear power [Remarks by the President on Energy in Lanham, Maryland, February 16, 2010].
In March 2011, following the Fukushima nuclear disaster in Japan, Obama said he had “requested a comprehensive safety review by the Nuclear Regulatory Commission to make sure that all of our existing nuclear energy facilities are safe. And we’re going incorporate those conclusions and lessons from Japan in design and the building of the next generation of plants” [Remarks by the President on America’s Energy Security, March 30, 2011].
In February 2010, Obama’s 2011 budget proposal stated, “The Administration has determined that Yucca Mountain, Nevada, is not a workable option for a nuclear waste repository and will discontinue its program to construct a repository at the mountain in 2010” [FY2011]. Congress has since appropriated no funds for Yucca Mountain.
As a 2008 presidential candidate, Romney called for developing nuclear power “in a more aggressive way,” adding that the U.S. can reprocess spent fuel, as is done in France [Los Angeles Times, December 30, 2007].
In his book, No Apology, Romney describes “nuclear power as a win-win; it’s a domestic energy source with zero greenhouse gas emissions.”
Romney’s jobs and economic plan calls for expanding nuclear power by “streamlin[ing] NRC procedures so that licensing decisions for any reactors to be built with an approved design on or adjacent to an existing site are completed within two years” [Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, 2011].
In an October 2011 debate, Romney said, “The idea that 49 states can tell Nevada, ‘We want to give you our nuclear waste,’ doesn't make a lot of sense. I think the people of Nevada ought to have the final say as to whether they want that, and my guess is that for them to say yes to something like that, someone's going to have to offer them a pretty good deal, as opposed to having the federal government jam it down their throat” [Cnn.com, October 18, 2011].
The U.S. Energy Information Administration estimates that in 2011, federal lands generated about 6 percent of the nation’s oil, and about 13 percent of its natural gas, production. Drilling in federal waters accounted for about 25 percent and 7 percent of domestic oil and natural gas production, respectively [Sales of Fossil Fuels Produced from Federal and Indian Lands, FY 2003 through FY 2011, March 14, 2012].
In February 2012, responding to a press question about whether the president can claim credit for domestic oil production being at an eight-year high, a White House spokesperson said, “It is simply a fact that every single year that President Obama has been in office, that oil and gas production has increased every year. And our imports of oil and gas have declined every year [Press Briefing by Principal Deputy Press Secretary Josh Earnest, February 24, 2012].
In March 2012, Obama told a campaign audience that, “Over the last three years, my administration has opened millions of acres of land in 23 different states for oil and gas exploration” [Remarks by the President on Energy, March 15, 2012].
According to the U.S. Energy Information Administration (EIA), federal onshore oil production decreased by 7 million barrels in the first three fiscal years of the Obama administration. In the same period, federal onshore gas production decreased by 215 billion cubic feet [Sales of Fossil Fuels Produced from Federal and Indian Lands, FY 2003 through FY 2011, March 14, 2012].
Romney has said that as president he would direct the Department of the Interior “to implement a process for rapid issuance of drilling permits to developers with established safety records seeking to use pre-approved techniques in pre-approved areas” [Believe in America, September 6, 2011].
In a March 2012 op-ed, Romney said, “[President Obama] has slashed the rate of federal land leasing by half. Where leases are established, his administration is issuing permits one-third slower than the previous rate. Oil and natural-gas production on federal land is declining” [America Can be the World's Next Energy Superpower, Columbus Dispatch, March 5, 2012].
A March 2012 Romney campaign press release said, “the President is to blame for stifling [federal] oil production and driving up prices at the pump,” adding that leases signed before the Obama Administration are the reason why “oil and gas production is occurring on state and private lands” [President Obama's Drilling Deception, March 21, 2012].
Romney’s August 2012 energy plan would give states authority “to oversee the development and production of all forms of energy on federal lands within their borders, excluding only lands specifically designated off-limits;” federal agencies would “certify” state decision making as adequate [The Romney Plan for a Stronger Middle Class: Energy Independence, 2012].
Following the Deepwater Horizon oil spill in the Gulf of Mexico in April 2010, the Department of Interior issued a six-month moratorium on drilling new deep-water oil and gas wells on the Outer Continental Shelf [Remarks by the President After Meeting with BP Oil Spill Commission Co-Chairs, June 1, 2010]. In October 2010, Interior lifted the moratorium and required new safety regulations [Salazar: Deepwater Drilling May Resume for Operators Who Clear Higher Bar for Safety, Environmental Protection, October 10, 2010]. The first deep-water drilling permit was issued in February 2011 [BOEMRE Approves First Deepwater Drilling Permit To Meet Important New Safety Standards in Gulf of Mexico, February 28, 2011].
In December 2010, in a revised oil and gas leasing strategy, Interior recommended maintaining the congressional moratorium for the Eastern Gulf of Mexico; delayed leasing in the Mid and South Atlantic regions through 2017; and resumed leasing in other portions of the Gulf of Mexico and in the Arctic Ocean and the Cook Inlet [Salazar Announces Revised OCS Leasing Program, December 1, 2010].
In January 2012, President Obama said in his State of the Union address, “Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my administration to open more than 75 percent of our potential offshore oil and gas resources. Right now American oil production is the highest that it’s been in eight years” [Remarks by the President in State of the Union Address, January 24, 2012].
In March 2012, President Obama told a campaign audience that, “I’ve directed my administration to open up more than 75 percent of our potential [offshore] oil resources. That includes an area in the Gulf of Mexico we opened up a few months ago that could produce more than 400 million barrels of oil. So do not tell me that we’re not drilling” [Remarks by the President on Energy, March 15, 2012].
According to the U.S. Energy Information Administration (EIA), federal offshore oil production decreased by 13 million barrels in the first three fiscal years of the Obama administration. In the same period, federal offshore gas production decreased by 550 billion cubic feet [Sales of Fossil Fuels Produced from Federal and Indian Lands, FY 2003 through FY 2011, March 14, 2012].
Romney has said that as President he would, “permit drilling wherever it can be done safely, taking into account local concerns. This includes the Gulf of Mexico, both the Atlantic and Pacific Outer Continental Shelves, Western lands, the Arctic National Wildlife Refuge, and off the Alaska coast” [Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, 2011].
In June 2012, Romney’s campaign ran an ad in Virginia that within the first one-hundred days of a Romney Presidency, he would “reverses Obama’s offshore drilling ban...” [Romney For President Releases Television Ad, "First 100 Days: Virginia", June 22, 2012].
Romney’s 2012 energy plan calls for establishing a new five-year offshore leasing plan with minimum production targets, starting with areas off the coasts of Virginia and the Carolinas now closed to exploration [ The Romney Plan for a Stronger Middle Class: Energy Independence, 2012].
The U.S. Geological Survey estimates that the Arctic holds about 30 percent of the world’s undiscovered gas and 13 percent of the world’s undiscovered oil [Gautier D.L., et al. "Assessment of undiscovered oil and gas in the arctic". Science. 324 (5931): 1175-1179 DOI:10.1126/science.1169467, May 29, 2009]. Oil and gas production has been underway in the Arctic since the 1970s.
In March 2010, the Obama Administration called for “increasing oil and gas exploration in frontier areas, such as parts of the Arctic and Atlantic Oceans” [Obama Administration Announces Comprehensive Strategy for Energy Security, March 31, 2010].
In July 2011, President Obama issued an Executive Order creating an Interagency Working Group “to coordinate the efforts of Federal agencies responsible for overseeing the safe and responsible development of onshore and offshore energy resources and associated infrastructure in Alaska and to help reduce our dependence on foreign oil” [Executive Order 13580--Interagency Working Group on Coordination of Domestic Energy Development and Permitting in Alaska, July 12, 2011].
In February 2012, DOI approved Shell’s exploration plans in the Beautforts and Chukchi Seas off Alaska. [Obama Administration Announces Major Steps toward Science-Based Energy Exploration in the Arctic, February 17, 2012].
In September 2012, Shell began drilling the top portion of an exploratory well in the Chukchi Sea that will extend 1,400 feet beneath the seafloor. Shell is not permitted to drill deeper into oil deposits until its containment system is certified by the Coast Guard and is in place, a step that could be completed as late as next year [Kim Murphy, “Shell opens new oil frontier in Arctic with Chukchi Sea drilling,” Los Angeles Times, September 9, 2012].
Shortly after drilling its first “top hole” well in the Chukchi Sea, Shell announced its containment system was damaged in a final test, which will delay drilling into oil deposits until 2013. However, Shell plans to continue drilling “top hole” wells this year, and expects to begin exploratory drilling in the Beaufort Sea in Fall 2012 [Royal Dutch Shell Alaska drilling update, September 17, 2012].
In his job and economic plan, Governor Romney writes that, “[he] will permit drilling wherever it can be done safely, taking into account local concerns. This includes… [areas] off the Alaska coast” [Believe in America: Mitt Romney’s Plan for Jobs and Economic Growth, 2011].
In 2009, leaders of the G20 – the world’s 20 largest economies – pledged to phase out fossil fuel subsidies over the next decade. According to one study, from 2002 to 2008, U.S. government subsidies of fossil fuels totaled $72.5 billion.
In January 2012, Obama said in his State of the Union that “we’ve subsidized oil companies for a century... It’s time to end the taxpayer giveaways to an industry that rarely has been more profitable, and double-down on a clean energy industry that never has been more promising” [Remarks by the President in State of Union Address, January 25, 2012].
The president’s last three budget proposals call for eliminating “tax breaks for oil, gas, and coal companies, closing loopholes to raise nearly $39 billion over the next decade” for investment in clean energy technologies [FY2011, FY2012, FY2013].
In March 2012, a Romney campaign aide referred to ending fossil fuel subsidies as “increasing taxes” [MittRomney.com, March 4, 2012].
In April 2012, when asked by Fox News about ending tax breaks for oil companies, Romney stated that he’d like to reduce the corporate tax rates and, “eliminate a lot of the deductions and the breaks and the special deals that a lot of … industries get” [Fox News Channel, April 3, 2012].
In August 2012, the federal government adopted the second of two rules dramatically increasing the fuel economy and decreasing greenhouse gas emissions from cars and light trucks.
The first rule, adopted in April 2010, raises the average fuel economy of new passenger vehicles to 34.1 miles per gallon (mpg) for model year 2016, a nearly 15 percent increase from 2011. The second rule, finalized in August 2012, will raise average fuel economy to up to 54.5 mpg for model year 2025, for a combined increase of more than 90 percent over 2011 levels. Fuel economy could reach 54.5 mpg if the automotive industry chooses to meet the greenhouse gas target only through fuel economy improvements.
The standards were adopted by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) with the cooperation of major automakers and the state of California. Together, the standards represent the largest step taken by the federal government directed at climate change. Passenger vehicles were responsible for 17 percent of U.S. greenhouse gas emissions in 2011, and the August 2012 standards through 2025 will reduce the carbon intensity of these vehicles by 40 percent from 2012 to 2025.
Other important benefits include improving U.S. energy security and saving drivers money.
The rule for model years 2017 to 2025 is projected to cut annual U.S. oil imports by an additional 6 percent by 2025 from what would happen otherwise, or 400,000 barrels per day. When combined with the rule for model years 2012 to 2016, U.S. oil imports are expected to decline by over 2 million barrels per day by 2025, equivalent to one-half of the oil we import from OPEC countries each day according to EPA.
Most of the U.S. transportation sector relies on oil as the single energy source, meaning any disruption can hurt the economy. A study by EPA and the Oak Ridge National Laboratory estimated that cutting demand for oil would produce an energy security benefit for the nation's economy of $13.91 (in 2011 dollars) for each barrel saved. In total, the rule for model years 2017 to 2025 is expected to save approximately 4 billion barrels of oil over the life of vehicles sold during this period.
Higher vehicle costs for fuel efficiency improvements will be far outweighed by fuel savings, with the average driver saving about $8,000 net over the lifetime of a model year 2025 car compared to a model year 2010 car.
Another rule adopted in August 2011 established the first-ever fuel economy and greenhouse gas standards for medium- and heavy-duty vehicles, which include tractor-trailers, large pickups and vans, delivery trucks, buses, and garbage trucks. These standards are projected to save a combined $50 billion in fuel costs, 530 million barrels of oil, and 270 million metric tons of carbon emissions over the lifetime of vehicles for model years 2014 to 2018.
President Obama directed EPA and the Department of Transportation to propose new rules by March 2015, with final implementation a year later, for medium- and heavy-duty vehicles for model years after 2018. According to a C2ES analysis, new standards could improve the fuel economy of these vehicles by an additional 15 percent, reducing annual emissions by 50 million metric tons of CO2-equivalent in 2035.
Transportation is second only to electricity generation as a source of U.S. greenhouse gas emissions.
The federal government has regulated fuel economy through standards for cars and light-duty trucks for decades. The 1973 Arab oil embargo prompted Congress to pass legislation in 1975 that introduced Corporate Average Fuel Economy (CAFE) standards for new passenger vehicles only. The purpose was to improve the fuel economy of the passenger vehicle fleet to reduce oil imports.
NHTSA, an agency within the U.S. Department of Transportation (DOT), administered the original CAFE program while EPA was responsible for establishing the testing and evaluation protocol for assessing compliance and calculating the fuel economy for each manufacturer. These responsibilities are the same today.
CAFE is the sales-weighted average fuel economy (in mpg) of the passenger cars or light-duty trucks for a manufacturer's fleet. See Calculating Light-Duty Vehicle CAFE Then and Now below for details of how EPA determines compliance. NHTSA fines manufacturers that are out of compliance. NHTSA has so far collected almost $819 million in fines over the life of the CAFE program.
Since 1975, a number of changes have been made to the standards. Figure 1 provides an annotated history of the U.S. CAFE standards. A number of other countries have also instituted fuel economy standards, with most establishing more aggressive targets than the United States. See here for more details.
FIGURE 1: Fuel economy standard for passenger vehicles from MY1978-2025.
1. 1978-1985: Congress sets car standard (1978-1985)
6. Bush Admin issues new truck targets (2005-2007)
Under the federal Clean Air Act, California is the only state with the ability to set air emission standards for motor vehicles, as long as these standards are as stringent as the federal standards and the state receives a waiver from the EPA. Once California receives an EPA waiver, other states can adopt California's standards.
In 2002, California enacted the Clean Cars Law (AB 1493) to set vehicle emissions standards for greenhouse gases. In April 2007, the Supreme Court ruled that the EPA has the authority to regulate greenhouse gas emissions from the transportation sector under the Clean Air Act. In December 2007, a judge threw out a lawsuit by automakers attempting to block California from implementing AB 1493. The intersection of fuel economy standards and greenhouse gas emission standards was beginning to become clear (see here for more on California vehicle standards).
Back in December 2005, California had applied for an EPA waiver to implement its greenhouse gas standards. In March 2008, EPA denied California's waiver request. Upon taking office in January 2009, President Barack Obama ordered EPA to reconsider that denial.
In June 2009, EPA granted a waiver allowing California to regulate greenhouse gas emissions from vehicles within the state beginning with model year 2009. On September 15, 2009, EPA and NHTSA issued a joint proposal to establish new vehicle standards for fuel economy and greenhouse gas emissions for model years 2012 to 2016, which were finalized on April 1, 2010. The joint proposal reflected an agreement among EPA, NHTSA, California, and most major automakers. California promptly agreed to adopt the federal standards in lieu of its own separate standard; and did so again with the latest standards covering model years 2017 to 2025.
The latest passenger vehicle standards, finalized in August 2012 and published in the Federal Register in October 2012, cover passenger cars, light-duty trucks, and medium-duty passenger vehicles, from model year 2017 to 2025. The standards build off those set in April 2010 for model years 2012 to 2016. The standards are based on the vehicle's footprint, which is a measure of vehicle size (see Calculating Light-Duty Vehicle CAFE Then and Now).
Because NHTSA cannot set standards beyond model year 2021 due to statutory obligations and because of the rules' long time frame, a mid-term evaluation is included in the rule. Thus, standards for model years 2022 through 2025 are considered "augural" by NHTSA. The comprehensive evaluation by both EPA and NHTSA will allow for any compliance changes if necessary for the later years covered by the rule.
As seen in Table 1, the greenhouse gas standard from EPA requires vehicles to meet a target of 163 grams of carbon dioxide equivalent (CO2e) per mile in model year 2025, equivalent to 54.5 mpg if the automotive industry meets the target through only fuel economy improvements.
TABLE 1: Projected Emissions Targets under the Greenhouse Gas Standards (g CO2e/mi)
Combined Cars & Light Trucks
Combined Cars & Light Trucks
As seen in Table 2, the fuel economy standard from NHTSA requires vehicles to meet an estimated combined average of up to 48.7 mpg in 2025. This estimate is lower than the mpg-equivalent of the EPA target for 2025 mentioned above (54.5 mpg) , because it assumes that manufacturers will take advantage of flexibility available under the law designed to reduce the cost of compliance. See Light-Duty Vehicle Program Flexibilities for more information.
TABLE 2: Projected Fuel Economy Standard (mpg).
Combined Cars & Trucks
Combined Cars & Trucks
This table is based on CAFE certification data from model year 2010, a car-truck sales split from the Energy Information Administration's Annual Energy Outlook for 2012, and future sales forecasts by JD Powers.
NHTSA and EPA released medium- and heavy-duty vehicle standards for model years 2014 to 2018 in August 2011. Tighter standards for these vehicles for model years after 2018 are due to be proposed by March 2015 and finalized a year later. Table 3 defines the breakdown for medium- and heavy-duty vehicles by weight.
TABLE 3: Vehicle class breakdown for medium- and heavy-duty vehicles
Gross Vehicle Weight Rating (lb)
8,501 – 10,000
10,001 – 14,000
14,001 – 16,000
16,001 – 19,500
19,501 – 26,000
26,001 – 33,000
The medium- and heavy-duty standards for tractor-trailers, buses, etc., are the first of their kind in the world. The standards are divided into three segments:
1. Tractor-trailers, which are responsible for almost two-thirds of fuel consumption from medium- and heavy-duty trucks, will have to achieve about a 20 percent reduction in fuel consumption by model year 2018, or about 4 gallons of fuel every 100 miles traveled. The following table defines the fuel consumption standards for tractor-trailers.
TABLE 4: Fuel Consumption Standards for Tractor-Trailers
2014–2016 Model Year Gallons of Fuel per 1,000 Ton-Mile
2017 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile
2. Heavy-duty pickup trucks and vans will have to improve fuel economy by model year 2018 by 10 percent for gasoline vehicles and by 15 percent for diesel vehicles, or one gallon of fuel per 100 miles traveled. The standards are phased in, increasing in stringency from model years 2014 to 2018. The standards rely on a "work" factor, which considers the vehicle's cargo capacity, towing capabilities, and whether it has 4-wheel drive. Similar to the light-duty standards, the standards are based on the manufacturer's sales mix. To provide flexibility, manufacturers can conform to the standards using one of two phase-in approaches:
3. Vocational vehicles (delivery trucks, buses, garbage trucks) will have to improve fuel economy by 10 percent by model year 2018, or about one gallon of fuel per 100 miles traveled. The following table defines the fuel consumption standards for vocational vehicles.
TABLE 5: Fuel Consumption Standards for Vocational Vehicles.
Light Heavy-Duty Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty Class 8
Fuel Consumption Mandatory Standards (gallons per 1,000 ton-miles) Effective for Model Years 2017 and later
Fuel Consumption Standard
Effective for Model Years 2016
Fuel Consumption Standard
Fuel Consumption Voluntary Standards (gallons per 1,000 ton-miles) Effective for Model Years 2013 to 2015
Fuel Consumption Standard
NHTSA and EPA designed the standards based on the kind of work the vehicles undertake. Heavy-duty pickup trucks and vans must meet a standard specified similarly to passenger vehicles, gallons of fuel per mile and grams of CO2e per mile. The other two categories must meet a standard based on the amount of weight being hauled (fuel consumed or grams of CO2e emitted per ton of freight hauled a defined distance).
U.S. fuel economy and greenhouse gas standards exist because individual drivers tend to value savings from fuel economy much less than society as a whole, which leads to more oil consumption than would occur if soceital benefits were taken into account. The benefits to society of higher fuel economy include, but are not limited to, reduced impacts on global climate, improved energy security, and overall consumer savings. But those benefits are not top of mind when a consumer buys a car.
In addition, when making purchasing decisions, most people assume a dollar today is worth more than a dollar in the future since the dollar today can be invested and grow in value over time. The value people assign to a dollar in the future compared to a dollar today is known as the discount rate, or the interest rate they would expect on a dollar invested today. For example, a discount rate of 20 percent means consumers assume they will make 20 percent interest annually on money invested today, which is unlikely. Thus, the higher the discount rate a consumer uses, the more likely a consumer is to invest that money instead of spending it on a product. Consumers can exhibit different discount rates depending on the product.
For passenger cars, David Greene from Oak Ridge National Laboratory found that the value consumers place on fuel economy savings varies widely, but empirical research reveals a discount rate between 4 and 40 percent. The discount rate that society put on fuel savings is much closer to 4 percent, meaning consumers often substantially undervalue fuel economy compared to society.
Each automaker's fleet-wide average fuel economy consists of three potential fleets: domestic passenger cars, imported passenger cars, and light-duty trucks. (The split between domestic and imported cars exists to support domestic automobile production.) With its focus on fuel efficiency, the standard must capture the fuel economy of each vehicle traveling the same number of miles. The harmonic mean of the fleet accomplishes this task (versus the simpler arithmetic mean). That is, instead of dividing the sum of the fuel economy rates in mpg for each vehicle by the total number of vehicles (the arithmetic mean), the reciprocal of the arithmetic mean is used as follows:
Where Production is the number of vehicles produced for sale for each model and TARGET is the fuel economy target for the vehicle.
Before 2008, the target fuel economy was the same for all vehicles. In 2008, NHTSA changed the target to a bottom-up one based on attributes of each vehicle instead of a top-down uniform target across an entire automaker's fleet. The vehicle footprint target for light-duty trucks through model year 2016 and for automobiles through model year 2025 is determined as follows:
where FOOTPRINT is the product of the vehicle's wheelbase and average track width in square feet, a and b are high and low fuel economy targets that increase from 2012 to 2025 and are constant for all vehicles, and c and d are adjustment factors. Parameter c is measured in gallons per mile per foot-squared, and parameter d is measured in gallons per mile.
For light-duty trucks beginning in model year 2017, an additional variation of the TARGET calculation is considered. This additional variation establishes a "floor" term, which prevents any footprint target from declining between model years. The definitions of parameters a, b, c, and d correspond to e, f, g, h, accordingly. However, the values of these parameters are different.
The idea behind an attribute-based standard is that the level of difficulty of meeting the standards is the same for smaller and larger vehicles. A uniform standard, on the other hand, is easier to meet for smaller vehicles (i.e., those with a smaller footprint) than for larger vehicles.
The EPA and NHTSA programs have a number of features to make compliance for manufacturers more cost-effective, while also encouraging technological innovation like plug-in electric vehicles. Since there are two programs to comply with, the details of both programs are stipulated below.
- Credit Trading System: Both programs include a credit system allowing manufacturers to carry efficiency and greenhouse gas credits forward by up to five years and backward up to three years to achieve compliance and avoid fines. Manufacturers can also transfer credits between cars and trucks of their fleet and trade credits with other manufacturers. Additionally, CO2 credits generated for EPA compliance from model year 2010 to 2016 can be carried forward as far as model year 2021.
- Air Conditioning Improvements: Both programs allow manufacturers to use air conditioning (A/C) system efficiency improvements toward compliance. For the NHTSA program, credits will depend on fuel consumption reductions. The EPA program allows credits for reductions in fuel use and refrigerant leakage, as well as the use of alternative refrigerants with lower global warming potential.
- Off-Cycle Credits: Current test procedures do not capture all fuel efficiency and greenhouse gas improvements available. Technologies that qualify for additional credit might include solar panels on hybrid vehicles, active aerodynamics, or adaptive cruise control. In addition, manufacturers can apply for credit for newer technologies not yet considered if they can provide sufficient data to EPA.
- Zero Emission, Plug-in Hybrid, and Compressed Natural Gas Vehicle Incentives: To encourage plug-in electric vehicles, fuel cell vehicles, and compressed natural gas (CNG) vehicles, EPA has included a credit multiplier in the rule for model years 2017 to 2021. In the compliance calculation for GHG Emissions, all-electric and fuel cell vehicles count as two vehicles beginning with model year 2017 and phasing down to 1.7 by model year 2021. Plug-in hybrid electric vehicles begin with a multiplier of 1.6 in model year 2017 and phase down to a value of 1.3 by model year 2021. Electric and fuel cell vehicles sold during this period will count as emitting 0 grams of CO2e per mile. There is no multiplier for model years 2021 to 2025 and EPA limits the zero-grams credit based on vehicle sales during this period. The cap for model years 2021 to 2025 is 600,000 for companies that sell 300,000 of these vehicles from model year 2019 to 2021 and at 200,000 otherwise. Beyond that number, manufacturers of electric and fuel cell vehicles will need to account for their upstream emissions (i.e., electricity generation or hydrogen production) using accounting methodologies defined in the rule.
EPA has also included credit multipliers for CNG equivalent to plug-in hybrid electric vehicles: 1.6 in model year 2017 and a phase down to 1.3 by model year 2021. Unlike electric and fuel cell vehicles, GHG emissions from CNG vehicles will be measured by EPA.
In contrast, NHTSA does not believe it has the legal authority to offer credit multipliers. Existing legal authority does allow NHTSA to incentivize alternative fuels, like natural gas, however, by dividing vehicle fuel economy by 0.15; in other words, an electric, fuel cell, or CNG vehicle that has a fuel economy of 15 mpg-equivalent will be treated as a 100 mpg-equivalent vehicle.
- Truck Hybridization: Both programs offer incentives to add battery-electric hybrid support to full-size trucks. Mild hybrid pickup trucks (15-65 percent of braking energy is recaptured) would be eligible for a per vehicle credit of 10 grams of CO2e per mile during model years 2017 to 2025 so long as the technology is incorporated into 20 percent or more of the company's model year 2017 full-size pickup production, ramping up to at least 80 percent by model year 2021. Strong hybrid pickup trucks (at least 65 percent of braking energy is recaptured) would be eligible for a credit of 20 grams of CO2e per mile per vehicle during model years 2017 to 2025 as long as the technology is used in at least 10 percent of the company's full-size pickup trucks.
- Transportation Sector Emissions Overview
- Comparison of Actual and Projected Fuel Economy for New Passenger Vehicles
- EPA Office of Transportation and Air Quality Regulations and Standards
- NHTSA CAFE Program
- Greene, D. (2010, February 9-10). Why the Market for New Passenger Cars Generally Undervalues Fuel Economy. Retrieved August 5, 2011, from International Transport Forum.
As early as this week, the federal government will announce what is likely the largest move ever to save oil. If last year’s proposal becomes final, as expected, the fuel economy of a typical new car will go up by more than 70 percent by 2025. The standards will improve how far cars and trucks travel on a gallon of gas even more than the original corporate average fuel economy (CAFE) standards, enacted by Congress in 1975.
The new passenger vehicle standards for fuel economy and greenhouse gas emissions are also the single largest move by the federal government to address climate change. Three critical factors made this possible: consumer commitment, technological progress, and smart public policy.
I recently responded to a question on the National Journal blog, "Should Congress extend the production tax credit for wind energy or let it expire at year's end?"
Despite the very different views of the majority and minority parties in the Senate, there was in fact a fair degree of agreement among the witnesses at today’s hearing on climate science and local adaptation.
During the climate science portion of the Senate Environment and Public Works Committee hearing, both the majority and minority witnesses agreed that the Earth has warmed over the past 120 years. With the recent publication of the Berkeley Earth Surface Temperature project by former skeptic Richard Muller, there are now four (NOAA, NASA and Hadley are the others) major global temperature records that are in agreement that the Earth has warmed 1.5 degrees Fahrenheit over the past 50 years.
Today’s Senate hearing isn’t just about the science of climate change. It’s also about the actions that need to be taken now to adapt to the reality of a changing climate. Businesses and governments each have a critical role to play in building resilient communities and economies.
Business-as-usual is already being interrupted by extreme heat, historic drought, record-setting wildfires, and flooding. Events from water shortages to floods are disrupting the supply chains for such companies as Honda, Toyota, Kraft, Nestle and MillerCoors. By the end of 2011, the United States had recorded more billion-dollar disasters than it did during all of the 1980s, totaling about $55 billion in losses.
The Senate Environment and Public Works Committee holds a hearing tomorrow called “Update on the Latest Climate Change Science and Local Adaptation Measures.” This is the first Senate hearing focused directly on climate science in the 112th Congress, and we hope it won’t be the last. Climate change is happening, the news from peer-reviewed science is increasingly daunting, and the public needs to hear what credible scientists are learning about the risks and potential solutions.