Obama Increases Carbon Emission Standards

The new fuel efficiency standards released on Tuesday by President Obama achieve several important goals:

1. Resolves inconsistency between Federal standards and California standards bringing consistency to the industry. California will defer to the national standard.
2. Fuel standards will rise by 10 miles per gallon to an average fuel efficiency of 35.5 miles per gallon between 2012-2016. This is a 40% increase over today’s federal requirements.
3. Carbon emissions will fall by 900 Million metric tons, a 30% reduction, over the course of the program.
4. Program will save 1.8 Billions barrels of oil

The Government contends that the new measures will only add $600 to the cost of each vehicle sold. The text of the entire article can be found here. This plan which calls for carbon emission reductions could play a very important role in the future of climate change legislation and the ability of construction projects to sell their carbon emission reductions on the open market. If the reductions in carbon emissions achieved by these standards are great enough to meet the market demand, construction projects may be limited in their ability to sell the carbon reduction credits they achieved through energy efficiency measures to third parties such as coal fired power plants.