While the oil lobby continues its gas attack on climate legislation, a recent government study suggests that accelerating CAFE standards under the Waxman-Markey climate bill would actually lower our gas bills by more than 10% over the next two decades (see graph below):

Under the EIA's Accelerated CAFE Case analysis of the Waxman-Markey bill, the average fuel economy of a car on the road is expected to improve by roughly 0.6 mpg over the next two decades. While this may not seem like a lot, the EIA calculates that by the year 2030 these improvements will save over 91 billion gallons of gasoline (see graph below):

In fact, the EIA forecasts that this reduction in oil demand is large enough to reduce imports by 10%, cut our CO2 emissions by over 900mln tons, and actually lower global oil prices by around 3.5% (see graph below):

These benefits from building and driving cleaner cars are expected to allow our gas bills to continue to fall even as oil prices and carbon prices continue to rise. Furthermore, by making fewer trips to the gas station (a benefit in its own right in my opinion), consumers are even forecast to see their gas bills fall below what they would have been without a climate policy in place.

This is not something you are likely to hear from the oil lobby. The oil lobby only wants us to focus our attention on the costs associated with capping our greenhouse gas emissions and does not discuss any of the benefits we are expected to gain from driving more efficient vehicles. If we separate out the carbon costs in a gallon of gasoline from the clean car savings in a gallon of gasoline (using the EIA's data), we find that they largely offset one another and in fact the clean car savings starts to outpace the carbon costs by the year 2026 (see graph below):

Climate Policy will Help Accelerate Deployment of Cleaner Cars

According to EPA estimates, domestic automakers will need to make $56bln in incremental technology investments between the years 2012 and 2016 to meet President Obama's 35.5 mpg CAFE target. A funding requirement that is expected to be recovered through the sale of these more efficient cars and light trucks.

While some of these investments are already in place, the Waxman-Markey climate bil is expected to provide the temporary assistance needed to fully make this transition. Under the bill, the auto companies with have access to over $20bln in re-tooling incentives and $25bln in loan guarantees. Enough investment capital to achieve President Obama's CAFE targets, dramatically improve the competitiveness of domestically produced automobiles, and create thousands of new clean car jobs.

In sum, the EIA's modeling of the Waxman-Markey climate bill shows that investments in cleaner cars can help drive down our gas bills by over 10% under climate legislation. Investments that will help us achieve President Obama's accelerated CAFE targets, cut our CO2 emissions output, reduce our dependence on foreign oil, lower global oil prices, and help create thousands of good paying manufacturing jobs for America's workers. Benefits that will make passing climate policy a clean energy bargain for the American consumer.