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The Globe and Mail

Think the EPA will help cut emissions? Think again


Environmentalists on both sides of the border are cheering the recent announcement from Washington and Ottawa that both the United States and Canada will soon simultaneously impose much tougher fuel-emission standards for car manufacturers. Any given vehicle producer's combined fleet of cars and trucks must average 35 miles per gallon by 2016 (or 100 kilometers per six liters, if you live north of the border).

While the recent initiative signals a much more activist stance for the Environmental Protection Agency (EPA) than their virtually comatose profile during the Bush administration, raising corporate average fuel economy (CAFE) standards for vehicle manufacturers is nothing new.

Anyone who lived through the OPEC shocks of the 1970s can't help but get a strong sense of déjà vu. We went down that route back then, when CAFE standards rose by over 30 per cent despite the auto industry's contention that they couldn't meet the new environmental standards without going bankrupt. To absolutely no one's surprise, the auto industry was able to meet those levels and survive at the same time. But to virtually everyone's surprise, we discovered that those impressive efficiency gains neither cut our fuel bills nor lessened our carbon trails.

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Your engine may be a lot more efficient that your dad's old gas-guzzler from the 1970s, but chances are you burn just as much gasoline on the road over the course of a year as he did. You, like your fellow North American drivers, eat up all the energy efficiency gains made in engine and materials technology over the last thirty years by driving ever-larger, ever-faster vehicles loaded with more and more energy-consuming features. And to top it all off, you drive your vehicle about a third more than your parents did, in large measure because you commute so much further every day than they did.

Raising CAFE standards won't force us to burn less oil or emit less carbon. But the pump prices that will come with the triple-digit oil prices that are just around the corner will make us do both. And, for good measure, those same pump prices should easily enable the auto industry to reach the new bar set for corporate average fuel economy.

That's because the biggest factor affecting a vehicle manufacturer's ability to meet the higher North American fuel economy standard is the company's vehicle mix. When it costs you over $100 every time you fill up your tank, chances are there will be a lot more scooters than SUVs flying off the assembly line.

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About the Author
Jeff Rubin

In his follow-up to his award-winning and number one best-selling first book Why Your World  Is About To Get A Whole Lot Smaller, former CIBC World Markets chief economist Jeff Rubin asks a fundamental question: “What will it be like to live in a world without growth?”The end of cheap oil means the end of the easy answers to renewing prosperity. More

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