Markey: Citigroup Says Senate Fuel Economy Standards Attainable, Profitable for Automakers

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Contact: Select Committee, 202-225-4081

Markey: Citigroup Says Senate Fuel Economy Standards Attainable, Profitable for Automakers

Global Banking Giant’s Findings Rebuts Auto Industry’s Doom-and-gloom on 35 MPG Standard

WASHINGTON (October 25, 2007) – Global banking giant Citigroup released a report this week that concludes the fuel economy targets included in the energy bill currently being considered in Congress are both achievable and can result in profits for automakers. Citigroup’s conclusions regarding the financial impact of the Senate CAFE provisions that require that the combined fleet of cars and trucks achieve 35 miles per gallon in 2020 are quite the opposite from the doom and gloom scenarios being put forth by auto industry lobbyists.

“When you have the world’s number one bank, which has financial ties to many major automakers, saying fuel economy standards are a good economic play, it drives a stake through the heart of the auto industry’s scare tactics,” said Chairman Edward J. Markey of the Select Committee on Energy Independence and Global Warming.

The report, “CAFE and the U.S. Auto Industry; A Growing Auto Investor Issue, 2012-2020”, was created in partnership with Ceres and the Investor Network on Climate Risk, along with industry experts at the Planning Edge, University of Michigan Transportation Research Institute, and NRDC. It evaluated potential changes to the U.S. Corporate Average Fuel Economy (CAFE) program.

Here are selected statements from the report:

•    “Our analysis reveals that the 2020 target is tough but attainable, …and—surprisingly—generating some growth in variable profits for most automakers.”
•    “Further, replacing the way that CAFE standards are set for passenger automobiles to an attribute-based system has the potential to mitigate automaker concerns about economic impacts of higher regulation.”
•    “A well-crafted attribute-based system could eliminate some dysfunctional features of CAFE that have been factored into product mix decisions and the competitive positions of the various automakers.”

Congress is currently considering two energy bills passed by the House and Senate that would reduce oil dependence and cut global warming pollution. The bill passed in the Senate, which contains the 35 mpg fuel economy standard and other oil saving provisions, would save more than twice as much oil as we currently import from the Middle East by 2030. The House bill contains groundbreaking provisions to increase our use of renewable energy and make our appliances and buildings more efficient. It is estimated that, by 2030, an energy bill with the best provisions from both bills would reduce the total amount of U.S. heat-trapping emissions by roughly 40 percent of what’s needed to save the planet from dangerous global warming.

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