Canada Adopts America's New Fuel Economy Standard, For Now

Canada has said it will set a single "tough" tailpipe emission standard that will apply to 2011 model cars and light trucks. It will be identical to the federal corporate average fleet fuel economy (CAFE) standard announced by President Obama on March 27.

Canadian automakers welcomed the government's plan, which is your first sign that it must be flawed. Why are they pleased? Consider these two reasons:

(1) The Obama administration's interim standard for 2011 is weak -- even weaker than the standard proposed by President Bush last year.

(2) Canada's "single," "mandatory" standard will preempt provinces from adopting the more stringent limits of the California standard, to which four provinces have already committed.

On the first issue, President Obama's new federal CAFE standard will require cars to achieve 30.2 mpg and SUVs and pick-up trucks to get 24.1 mpg in 2011. That will raise the industry-wide combined average to 27.3 miles per gallon.

In America, that's an eight percent increase, or 2 mpg, over the 2010 model year -- hardly a tough requirement. Just look at what today's new models are already getting, via The Detroit News:

In the 2007 model year, automakers averaged 31.3 mpg for passenger cars, and 23.1 mpg for light trucks, above the 22.2 mpg mandate.

For more evidence, the Center for Biological Diversity filed a lawsuit this week to strike down the rule on account of its weakness.

And if you think it's an ineffectual standard in America, have a look at Canada. There, cars average 7.1 liters per 100 kilometers, or 33.1 mpg, already, according to published numbers by the CanWest News Service.

Talk about setting the bar low.

To be fair, the 2011 US standard is just the first step by President Obama in implementing a 2007 law approved by Congress to achieve a CAFE standard of 35 mpg by 2020. Later model years will be the subject of  future rulemaking --  and presumably will be harder to meet.

But nothing's set in stone yet, and what's really worth keeping an eye on here is the California factor. Which brings us to issue two.

President Obama ordered the EPA to rethink the Bush administration's refusal to allow California, and 13 other states, to set CAFE standards that go above and beyond the national ones. A final decision is expected in May.

Specifically, the states in question want permission to implement California's greenhouse gas regulations for vehicles -- the world's strictest, and the bane of the North American auto industry.

The rules would require a 30 percent reduction in tailpipe emissions by 2016 and have the effect of a fleet-wide fuel economy of 34.5 mpg by 2015. What are the odds of them becoming law?

In the US, there are indications that the Obama administration will seek to harmonize them with federal CAFE rules.

In fact, Inside EPA reported on April 5 that California officials "are expected to accept an alternative compliance option" that would implement a single national CAFE -- but would set it according to the California regulations. More (my italics):

Several sources say EPA is likely to follow historical precedent and federalize the state rules.

In Canada, there seems no chance of them passing, in any form.