The U.S. Environmental Protection Agency (EPA) has proposed to effect a reduction in CO2 releases in the U.S. by raising the required fuel economy standards for new cars in 2014 and again in 2016. The current standard, now at 30.2 mpg for passenger cars (everything here is about passenger cars, the analysis of light trucks will have to wait) will rise to 35.5 mpg in 2016.
EPA claims that they used a carbon price of $21/tonne to establish the appropriate increase in fuel economy. The EPA also claims that these standards will reduce CO2 releases from the vehicle sector by 21%. Well, at least they are not using the number 19. This proposal will have a minute effect on CO2 levels and is unlikely to come in at the very low or “negative” cost per tonne of CO2 claimed by its proponents.…