Obama to set fuel-economy standards, carbon limit

Automakers must meet U.S. fuel-economy standards of 35.5 miles per gallon by 2016, four years sooner than previously planned, under a federal proposal being announced tomorrow, a senior administration official said.

President Barack Obama's plan adopts nationwide a standard proposed by California, setting the first-ever U.S. limit on greenhouse-gas pollution from vehicles.

Auto companies and California have signed off on the proposal, ending their feud over the state's proposed rules. California's Republican Governor Arnold Schwarzenegger and General Motors Corp. Chief Executive Officer Fritz Henderson are both planning to attend Obama's announcement.

"It launches a new beginning," said David McCurdy, president of the Alliance of Automobile Manufacturers, in a statement. "The president has succeeded in bringing three regulatory bodies, 15 states, a dozen automakers and many environmental groups to the table."

The Washington-based alliance represents 11 carmakers, including GM, Chrysler LLC, Ford Motor Co. and Toyota Motor Corp.

Obama's 35.5 mpg standard for 2016 models matches the target set by California under a 2004 state law. It compares with the 27.3 mpg that the U.S. Transportation Department said last month automakers would have to meet for their 2011 models.

A law enacted by Congress in 2007 required automakers to raise fuel-economy standards by at least 40 percent, which would have forced them to meet a target of 35 mpg by 2020.

'Biggest Step'

Obama's action is the "biggest single step to curb global warming," Dan Becker, director of the environmental group Safe Climate Campaign, said in an interview.

While California achieved its emissions goal, auto companies also won some of what they sought. The federal government, rather than individual states, will set fuel-economy standards through 2016. Also, those standards will be set based on vehicle attributes, such as size and weight.

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