Obama’s Auto Emissions Plan Dependent on Hesitant U.S. Consumers

President Barack Obama’s new fuel emissions standards are a step in the right direction, most people seem to agree. The carbon emissions saved under the plan could equal a 30-percent reduction in auto emissions in the United States, say estimates. The plan, which requires automakers to improve fuel-efficiency by the year 2016, is one that 10 automakers have signed onto - even Ford, which reportedly got cold feet at the last moment.

For American car buyers, though, the landmark agreement will mean an average $1,300 increase in the price of a new car by 2016. And to a car-buying public that hasn’t yet latched onto the idea of a hybrid vehicle, that price increase might be a tough one to swallow.

“You might get people saying, ‘I was going to buy a new car, but now it’s more expensive, and I’m just not going to buy one,’” said Wade Newton, a director of communications at the Alliance of Automobile Manufacturers. “A very fuel-efficient vehicle that doesn’t get purchased doesn’t serve anyone.”

It’s not just a car’s price that determines whether or not it the public will buy it. An individual person’s credit, finances and job all contribute to a buying decision, and it’s different for every person. But one thing that remains constant is that people tend to buy more fuel-efficient cars when gas prices go up.

“The price of fuel sends a strong buying signal to the consumers,” Newton said. “When gas prices rose, people couldn’t get enough of fuel-efficient vehicles. When they stopped surging, buying went down again.”

A strong example of this is in Europe, where continuously high gas prices have stimulated the hybrid industry. “In Europe, gas is so expensive that every time a customer pulls up to the pump, they’re reminded of the price of fuel,” Newton said. “Here in the U.S., gas is so cheap. But very few people are thinking that in the long run gas prices are low to stay.”

But Americans still may need another impetus to buy the more efficient cars other than the Obama administration’s ruling. Newton said that the alliance hopes the government could provide incentives to consumers to purchase new technologies to combat the upfront price increase. There are already tax incentives in place, but they haven’t been enough to greatly stimulate buying.

That may be because there aren’t many fuel-efficient cars to choose from in the first place. There are only six cars on the market now with the 35.5 -mpg standard that the new Obama limit imposes: The Toyota Prius, Hondo Insight hybrid, Honda Civic hybrid, Ford Fusion hybrid, Mercury Milan hybrid and the Smart fortow microcar, according to the car Web site Edmunds.com.

Beyond a tax incentive, it’s important that the government green its own vehicles. The Alliance of Automobile Manufacturers and at least 12 governors are pushing for a fleet modernization bill on the Hill. A cash-for-clunkers program, the bill would require lawmakers to purchase more efficient cars and sell their old cars to the public. Along with giving consumers an example to follow, the program would take less fuel-efficient cars off the road because the cars the government has now are relatively efficient.

“It’s not directly related to yesterday’s action, but in a sense it is because it would happen much quicker [than other incentive programs],” Newton said. “We understand that consumers need that stimulation.”

The one thing that the Obama standard has going for it is that it’s a national standard, unlike the patchwork, state-by-state standards that had been implemented under the Bush administration. This means that all the car companies that signed on will have to raise emissions, not just a few here and there. All companies will face incredible challenges in updating their technologies, but since it’s across-the-board, it will raise the fuel efficiency of every model of car. Consumers in 2016 who are looking to buy a new car will have no choice but to get a more fuel-efficient model.

Newton said that even though he sees consumers becoming more aware of the urgency of reducing emissions, the amount of support they will provide is still up in the air:

“Consumers seem to have a renewed respect for the importance of the low-carbon industry. But it’s important that consumers purchase and support these new products. Any plan is dependent on the most basic of individuals.”

Photo Credit: ourgreencommunity.org at Flickr under a Creative Commons License

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