Updated: Obama signals end of the road for gas guzzlers

President Obama today gave the clearest signal so far that he is keen to accelerate his ambitious environmental agenda, announcing tough new fuel-efficiency standards that could spell an end to the US love affair with gas-guzzling cars.

Under the new rules, which were launched today at a White House ceremony, average fuel standards for all new passenger vehicles will rise by 10 miles per gallon to about 35.5 miles per gallon between 2012 and 2016.

Over the life of the programme, the move will result in savings equivalent to taking 177 million of today's cars off the road, the White House said.

Speaking at the event, President Obama hailed the new standards as an historic move that will help end US reliance on imported oil. "What is all the more tragic is that we've known about these costs in one way or another since the gas shortages of the 1970s," he said. "And yet all too little has been done. Calls for action rise and fall with the price of a barrel of oil."

The administration has estimated that the new fuel standards will require an improvement in vehicle fuel efficiency of about 40 per cent, save about 1.8 billion barrels of oil, and equate to carbon emissions savings of about 900 million metric tons over the life of the programme.

The White House also said that the new standards will not affect consumer choice and the types of vehicles that will be permitted to be produced, but will only regulate the efficiency of the vehicles. "The new rules will not dictate the size of cars, trucks and SUVs that manufacturers can produce; rather, it will require that all sizes of vehicles become more energy efficient," the OTP said.

The policy moves the whole of the US into line with the tough fuel-efficiency standards proposed by California, bringing to an end the long-running legal action undertaken by the state after the Bush administration blocked its calls for tighter standards.

The announcement was broadly welcomed by green groups, which said that it would deliver the single biggest reduction in carbon emissions of any of the environmental initiatives announced by the Obama administration to date.

The US auto industry, which has been involved in several months of negotiations over the new standards, also largely welcomed the move – although given the large stake the US government has in US automakers, they had little choice. The deal was also sweetened further on Monday when Democrats signalled that a further $50bn in loan guarantee could be made available to the ailing industry as part of the proposed climate change bill that is working its way through Congress.

General Motors president and chief executive Fritz Henderson said he " commended" the new standards, arguing they would give car makers clear guidance on the need to develop cleaner models in the future.

"General Motors commends President Obama's leadership to establish a harmonised national programme to improve vehicle fuel economy and lower greenhouse gas emissions," he said. "Harmonising a variety of regulations will benefit consumers across America by getting cleaner, more efficient vehicles on the road quicker and more affordably. In turn, GM and the auto industry benefit by having more consistency and certainty to guide our product plans."

But despite welcoming the US government's actions on curbing carbon emissions from cars, green groups this week reacted angrily to the latest version of the proposed Waxman-Markey climate change bill, which is expected to act as the centrepiece of the Obama administration's global warming agenda.

Democrats last week agreed to lower the emission targets included in the bill to a 17 per cent cut by 2020 and also moved top relax the rules surrounding the proposed carbon cap-and-trade scheme that sits at the heart of the bill.

"While science clearly tells us that only dramatic action can prevent global warming and its catastrophic impacts, this bill has fallen prey to political infighting and industry pressure. We cannot support this bill in its current state," said Greenpeace USA executive director Phil Radford.

Greenpeace said the targets included in the bill, also known as the American Climate and Energy Security Act (ACES), have been watered down to a point where it will not help limit dangerous levels of climate change.

"To avoid the worst impacts of climate change, science tells us that the US and other developed nations must collectively achieve emissions cuts of at least 25-40 per cent below 1990 levels by 2020 and 80-95 per cent by 2050," said Radford. "But ACES, as it currently stands, only sets a domestic target of about four per cent below 1990 levels by 2020."