Auto execs want fuel efficiency, within limits

NEW YORK (CNNMoney.com) -- Heads of the world's largest auto companies said Wednesday they are ready to work with lawmakers to cut greenhouse gas emissions but stopped well short of endorsing calls to raise fuel economy standards drastically.

In testimony before a panel from the House Energy and Commerce Committee, most auto execs supported small increases in fuel efficiency standards - or Corporate Average Fuel Economy (CAFE) standards - but said a sharp jump would be too costly.

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Rick Wagoner, chief executive of General Motors (Charts), said estimates of $40 billion to raise fuel efficiency standards by 4 percent a year over the next 10 years were "on the low side."

Wagner rallied against CAFE standards in general, saying they have not reduced the nation's oil consumption.

"The CAFE program has failed dramatically," he said.

Wagner said that although fuel efficiency for passenger cars has doubled since 1975, the number of miles driven per vehicle has also doubled, as has the number of cars. The result is the nation uses 60 percent more gasoline now than it did back then.

"It's time to move away from solutions that don't solve the problem."

But Rep. Edward Markey, D-Mass., produced a chart showing declining fuel use from 1975 to 1985, the years CAFE standards were raised significantly.

"CAFE standards were a tremendous success," said Markey.

Various proposals have been introduced in both the Senate and the House to raise passenger car CAFE standards to between 34 and 40 miles per gallon over the next 10 to 12 years.

The current CAFE standard for passenger cars is 27.5 miles per gallon, where it has held for the past 17 years.

"The imposition of higher CAFE standards could have a calamitous result," said Ron Gettelfinger, president of the United Auto Workers union, pointing to the possible loss of tens of thousands of jobs.

Gettelfinger, like the other executives present from Ford (Charts), Chrysler (Charts) and Toyota (Charts), said he favored mandatory cap-and-trade laws designed to limit the carbon dioxide from tailpipes.

Those caps, he said, should preferably come from "upstream" sources - meaning regulating the carbon at the refining or service station level.

Carbon dioxide is one of the principal greenhouse gases.

The executives said the government could also reduce carbon emissions in automobiles by spending more money on the research and development of hydrogen vehicles, as well as by encouraging the proliferation of more ethanol fueling stations.

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