US fuel efficiency is about to get a jump start

TV car ads in the US will tell you everything you need to know about what the immediate impact on your wallet will be. But they don't tell you what the latest Lexus or Honda might cost you at the pump in terms of mpg, or what the cost might be to the environment in terms of CO2 emissions.


It's hardly surprising when the Honda FIT for example will run at 33mpg in the US, but its EU twin will run at 53mpg. This wouldn't matter but for the fact that the Environmental Protection Agency estimates that transport contributes approximately 27% of total U.S. greenhouse gas emissions and is the fastest-growing source of emissions. In the EU, transport (excluding air and maritime) accounts for 19% of emissions.

Barack Obama's push to put 1M electric vehicles on US roads by 2015 seems like the wrong tool for the job when US automakers have stalled at an average of 22.5mpg. In terms of fuel efficiency, the US has been stuck in the slow lane for 20 years or more.

Such conflicted approaches to energy use - I want it, but I want it cheap - are rife and sit alongside a lack of joined up thinking. Here's just one, small example, of a lack of integrated and strategic thinking at municipal level.

San Francisco prides itself on being a "green city". It adopted a plan in 2007 to commit the city to reducing greenhouse gas emissions by 20% below 1990 levels by 2012. Its recycling rate at 77% diversion from landfill and zero emission trolley buses powered by clean electricity from the Hetchy Hetchy dam are laudable. But claims of being a green city by world standards are far-fetched.

SF Park, which manages parking spaces in the city, has developed a fantastic new real-time data service for iPhones which will tell you where the free spaces are in the city. I spoke to the project manager at the recent Transportation Camp in San Francisco. He told me that the app scheme cost $20M of federal dollars from the Federal Highways Department. But parking will now cost from as little as 50c an hour off peak and will, as he admitted, encourage people to drive into the city centre if they can be sure of finding a parking space more easily.

The project manager attempted to say that carbon emissions would be reduced because motorists wouldn't have to drive around the block several times looking for a free space. But it was a bit of a thin argument. I asked him if the trade-off would be fewer parking spaces to make way for better bike lanes or other "green" initiatives. He said no, that would be too difficult to mess with the roads "politically" even in a "green" city like San Francisco.

Meanwhile the San Francisco Municipal Transportation Agency is in the red to the tune of $19.6M and has proposed cutting services in response… no doubt encouraging more commuters into cars because the transport system is too unreliable. And as other rail services, such as Caltrain, struggle with a $30m gap in their budget, the federal highways agency is handing out a further $20M to install highway filters along the 101 to even out rush hour traffic, so that commuters can get to the city 10 minutes faster.

If anyone can tell me why this $40M combined is money well spent, I would love to hear about it. It makes no sense to me. Of course, none of this would matter if the fastest rising emissions in the US weren't from transport. But the American auto-industry is stuck in a time warp and the market in the US has not been driven to innovate for fuel efficiency.

Hopefully, that will change. The Global Fuel Economy Initiative is pushing for global efficiency improvements and California's Air Resources Board along with the National Highway Traffic Safety Administration are developing what is hoped will become a national fuel efficiency standard 2017-25. Recommendations for the so-called Corporate Average Fuel Economy standards will reach Obama's desk by the end of May. He will then decide on what the national standard should be in September.

A recent report from Citi Investment Research and Ceres indicated that automakers would in fact profit from new CAFE rules requiring automakers make passenger cars that did 42mpg by 2020. But even that "ambitious" level would still be low by European standards, the report noted. Again, it is only legislation that can stop the rise in traffic and drop the drain on fuel resources. In Europe, fuel taxation has spurred fuel efficiency since the 1970s. That isn't likely to happen in the US any time soon.

Barack Obama's Sunshot initiative and Sputnik moment for clean energy seem pointlessly grandiose without more down to earth measures: make smaller cars, and make them more efficient.