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Transport»Obama moves to improve car efficiency

»Monday, June 15,2009

Under the proposed standards, passenger cars will be required to do an average of 39 miles per gallon by 2016 in a move that would have the same effect as taking millions of vehicles off the road.

White House officials said it would help cut carbon emissions by more than 30 per cent, equivalent to 194 coal plants.

The delicate compromise, which still has to pass through Congress, is the first to link greenhouse gas emissions limits, favoured by environmentalists, and fuel economy standards, backed by the auto industry.

The new standards would raise the price of the average vehicle by $1700 (£840) but the White House argues that greater fuel efficiency – the current average is 25 miles per gallon – would compensate for this.

Mr Obama hailed the deal as an "historic agreement to help America break its dependence on oil, reduce harmful pollution and begin the transition to a clean-energy economy".

Bringing together advocates for tackling climate advocates and executives from the embattled auto industry for a ceremony in the Rose Garden, he said it was "extraordinary" that the two groups had compromised.

"It's no secret that these are folks who've occasionally been at odds, for years, even decades. In fact, some of the groups here have been embroiled in lawsuits against one another."

He said the agreement would save 1.8 billion barrels of oil over the lifetime of the vehicles sold in the next five years and would help improve America's national security by cutting reliance on imports.

Also present at the ceremony were Arnold Schwarzenegger, the Governor of California, the biggest of 13 states fighting in the courts to establish their own standards, and Jennifer Granholm, Governor of Michigan, home of the crisis-hit American car industry.

The announcement was greeted with enthusiasm by both environmental campaigners and industry officials, albeit for very different reasons. Mr Obama predicted that a series of national lawsuits over auto emissions would now be dropped.

The announcement represented a major break from the Bush administration, which had rejected California's push for its own standards.

In addition, the weakness of the auto industry, much of which is now beholden to the Obama administration for its very survival, prompted it to make a deal. Consumers, already suffering in the ailing economy, had already moved towards more fuel-efficient vehicle models.

"We are pleased that President Obama is taking decisive and positive action as we work together toward one national standard for vehicle fuel economy and greenhouse gas emissions that will be good for the environment and the economy," Ford said in a statement.



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