Experts To Testify that New Fuel Economy Standards Will Benefit Consumers, Carmakers, Autoworkers
Greenhouse Gas Pollution Will Also Be Cut, as Federal Highway and Environment Agencies Work Jointly on New Rule for the First Time
At public hearings in Detroit tomorrow Oct. 21st and New York City this Friday, the authors of a new report on proposed automobile fuel economy (CAFE) and greenhouse gas emission standards will testify that the standards will be good for U.S. automakers as well as the environment.
“Our research shows the standards will likely benefit both domestic automakers and Japanese automakers, with the biggest upside being for the Detroit Three,” said Walter McManus, lead author of the report, CAFE and the U.S. Auto Industry Revisited, who will testify at Wednesday’s hearing.
The report was published by Citi Investment Research and Analysis, in partnership with McManus’ University of Michigan’s Transportation Research Institute, Ceres and the Investor Network on Climate Risk.
The report shows that the new standards, proposed by the Obama Administration in May, will likely boost profits and slow the loss of market share of Detroit’s Big Three automakers. Consumers will benefit as well since fuel savings from more efficient cars – even at the present gas price of $2.50 a gallon – will more than offset slightly higher prices for vehicles incorporating new fuel-saving technologies. Those savings will only increase if gas prices rise further.
The standards are also likely to increase Detroit’s competitiveness -- thus saving U.S. autoworkers’ jobs -- with sales “expected to increase by the equivalent of two large assembly plants for the Detroit 3,” says the report.
This week’s public hearings take place Wednesday in Detroit and Friday in New York City. All hearings start at 9 a.m. local time, with the Detroit hearing taking place at the Detroit Metro Airport Marriott, 20559 Flynn Drive in Romulus, and the New York hearing at the LaGuardia Airport Marriott, 102-05 Ditmars Boulevard in East Elmhurst. Carol Lee Rawn of INCR and Karen Shapiro of Domini Social Investments are scheduled to testify in New York.
A third hearing is slated for Los Angeles next Tuesday, Oct. 27th at the Renaissance Los Angeles Airport Hotel, 9620 Airport Boulevard. The public comment period on the proposed regulations closes exactly one month later on Nov. 27th, after which the U.S. Environmental Protection Agency and National Highway Traffic Safety Administration will jointly formulate the final, so-called National Program rules.
“The report demonstrates that the urgent work of slowing global warming is also a giant opportunity for U.S. automakers to lead the emerging, global clean energy economy for future generations,” said Mindy S. Lubber, president of Ceres and director of the Investor Network on Climate Risk, a network of 80 investors with collective assets totaling $8 trillion focused on the business impacts of climate change.
"From an investor's perspective, this report underscores the importance of new and more realistic regulations in enhancing the Detroit 3’s competitiveness and profitability,” said Jack Ehnes, Chief Executive Officer at the California State Teachers’ Retirement System – one of the nation’s largest public pension funds and a leading INCR member. “It also demonstrates that consumers will gain financially from these new regulations,” said Ehnes. “So giving consumers what they want – greater fuel efficiency – is also a win for investors and the companies' bottom lines."
The new mileage standards would cover cars for model years 2012-2016 and would be closely modeled on California’s greenhouse gas emissions standards. Those standards limit emissions in ways that result in fleet average mileage of about 35.5 miles per gallon, a 40 percent increase in fuel economy from the present.
The California Air Resources Board will partner with the EPA and NHTSA in formulating the final, so-called National Program rules.
The full report is at: https://www.citigroupgeo.com/pdf/SNA41155.pdf
INCR, a project of Ceres, is an $8 trillion network of investors that promotes better understanding of the financial risks and opportunities posed by climate change. Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change.