Wednesday, April 23, 2008

Earth Day Surprise from EPA.

Second blog of the day, but it is my car day and this is a car story. The EPA surprised everyone (well, at least me) yesterday by moving to increase fuel efficiency faster than mandated by Congress. Standards will be increased 4.5% a year for the 5 years 2011 to 2015 inclusive, compounding to a 25% increase to 31.5 mpg by 2015. In doing their cost-benefit analysis they also, for the firat time I think, put a price on carbon dioxide emissions -- $7 per ton, which translates to about 2 cents a gallon.

The current law requires an increase to 35 mpg by 2020, but my bet would be that this gets increased over the intervening period; just continuing the 4.5% per annum compound rate would get us to about 40 mpg by 2020. How exactly they will handle plug-in hybrids and pure electric vehicles, let alone hydrogen vehicles, I do not know.

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