The latest report from the International Energy Agency says that global CO2 emissions last year were the highest they've ever been -- and much worse than expected. If we don't want to see a catastrophic disruption of global climate, we need to start acting with urgency right now.

This is no time to be timid. Of the many options the U.S. has for taking action, enacting strong fuel-economy and greenhouse-gas emission standards is one of the simplest and most effective. And it will benefit Americans immediately.

Most obviously, a strong fuel-economy standard saves people money because they don't have to buy as much gas. By 2030, a strong standard (at least 60 mpg by 2025) will have saved Americans $370 billion at the pump more than the weakest standard that the Obama administration is considering (and that's at $3.50/gallon -- does anyone really believe we'll be paying $3.50 per gallon two decades from now?). Already, today's consumers are showing that they value fuel economy. The recovery of American automakers is based on their newfound ability to build great cars and trucks with smart technology that get superior gas mileage. (There's nothing like a near-death experience to encourage rethinking your priorities.)

The technology to actually exceed 60 mpg already exists today. Setting a strong standard will increase the rate of adoption and drive further innovation. That innovation can happen right here in the U.S., whether it's designing more efficient engines, battery technologies, or creating new infrastructure to support electric vehicles. That means more jobs.

Breaking our dependence on oil is principled and patriotic, and it will bring greater prosperity to American consumers and workers. Not only will consumers save money over the life of a vehicle but also the auto industry will gain jobs. The Department of Energy forecasts that the number of auto industry jobs would increase by 21 percent with a standard of 62 mpg by 2025.

Let’s hope American automakers don't get amnesia and attempt to put the brakes on a clean-energy transition. Rather than cling to a destructive dependence on Big Oil, the American auto industry can continue its revival and harness the ingenuity and engineering talent that is one of our nation's greatest strengths. By doing so, they can go from being a big part of the problem to a key part of the solution.

Raising fuel-economy standards is one of the most powerful ways to expand the market for efficient cars. You only have to look at a recent before-and-after scenario to see how this works.

In 2009, President Obama issued new clean car standards that required cars and light trucks to get 34.1 miles per gallon by the year 2016. Before he released that standard, just 53 vehicles reached it. Today, there are 153 vehicles that do—including SUVs and midsize cars as well as hybrids and smaller models.

Consumer demand also has a role to play. Data shows that the number of hybrid sales is beating the market average, while sales figures for other models of fuel efficient vehicles are also on the rise. Sales of high-mpg clean diesels are up 42.2 percent; small cars are up 29.2 percent; and very small cars are up a whopping 62.4 percent.

Still, standards provide something consumer trends cannot: long-term certainty. Automakers try to guess the price of gas and respond accordingly, but tracking the volatile rollercoaster of the world oil market does not lend itself smart planning and strategic investment. Companies run the risk of being caught between model cycles and oil-market cycles, which is what happened to domestic automakers in the late 1970s and again between 2007 and 2009.

Strong standards, in contrast, tell car manufacturers exactly what goal they need to reach by when, so they can invest in innovation and deploy cleaner technology on a steady basis. As a recent article in the New York Times pointed out, the current standards are already paying off: fuel efficiency has been the key to Detroit’s rebound. That’s why strong standards make sound financial sense not only for automakers, but also the drivers who save money every time they fill their tanks.

And done right, they also make sense for our health and the environment. The Obama Administration is considering improvements for 2017 to 2025 standards that range from approximately 3 percent to 6 percent in annual reductions in average fuel consumption. Based on analysis done jointly by the EPA and the NHTSA, the 6 percent scenario not only cuts the most carbon pollution and oil consumption, but it also saves consumers the most money at the pump.

(These comments were submitted by Judi Greenwald, vice president for Innovation Solutions at the Pew Center on Global Climate Change.)

At a moment when it appears to many that our government can’t do anything right, the current approach to regulating vehicle fuel economy and greenhouse gas (GHG) emissions is a bright spot.

After decades of failing to tighten corporate average fuel economy (CAFE) standards, and several years when California and other states began to take the matter of setting vehicle GHG standards into their own hands, the federal government finally got its act together. In 2007 Congress enacted the Energy Independence and Security Act of 2007, tightening CAFE. In 2010, NHTSA and the U.S. Environmental Protection Agency (EPA) jointly set GHG and CAFE standards, and California agreed to conform its rules to the federal ones. NHTSA and EPA are hard at work at a second round of standards for light duty vehicles, as well as the first-ever set of similar rules for medium and heavy duty trucks.

We now have the Congress, federal and state regulators, industry and public interest groups aligned on policy a framework that is meeting important national goals of reducing oil dependence and GHG emissions, providing regulatory consistency and certainty to the industry, and creating a climate favorable to investment and innovation.

The auto industry is responding successfully. The plug-in hybrid electric Chevy Volt won the 2011 Motor Trend Car of the Year, 2011 Green Car of the Year, and 2011 North American Car of the Year. It’s also selling well. But PHEVs are just part of the story. The Chevy Cruze and Hyundai Elantra are among the nine vehicles in the U.S. marketplace that get more than 40 miles per gallon. They were also among the 10 top-selling vehicles last month. Higher sales of fuel-efficient vehicles across the board contributed to strong sales and combined profits of nearly $5.9 billion for the three U.S. automakers in the first quarter of this year.

Higher gasoline prices are heightening consumer interest in these vehicles. But we cannot rely on oil prices alone to drive us to the next generation of vehicles. Oil prices are too volatile to motivate the sustained business investment we need. And the price we pay at the pump doesn’t reflect the true cost of oil to our country. Half of the 2010 U.S. trade deficit was from oil – that’s $256.9 billion we sent overseas last year alone. The U.S. EPA estimates that the energy security benefit of reducing oil dependence is on the order of $12 per barrel. And gasoline burning inflicts enormous damage on our air quality and climate. For example, the transportation sector is responsible for more than a quarter of U.S. GHG emissions and is a major contributor to smog.

The beauty of the fuel economy and GHG standards is that they are performance based. They set targets based on important public policy goals – i.e., oil savings and GHG reductions – but leave it to industry to find the best way to meet them. They don’t “pick winners.” They should remain the core of our public policy framework for transportation.

But our current set of vehicles and fuels may not be up to the job of meeting our long-term goals. In order to level the playing field with the incumbent technologies that have benefited from nearly a century of infrastructure development and fuel-vehicle optimization, we need to make some public investment to jumpstart alternative vehicles and fuels. This has to be done carefully. We need a savvy, adaptive strategy that ensures that any subsidies are only temporary, leverages public investment with private dollars, spawns experiments and learns from them, and rewards environmental and efficiency performance.

It is not clear whether hydrogen, natural gas, electricity, or biofuels are the long-term solution to our energy and environmental challenges. But we need to continue to keep the pressure on all of them through performance-based standards, research them all, subsidize limited deployment to see how they perform in the real world, and leave it to industry and consumers to determine their ultimate success in the marketplace.

The market should drive fuel economy. Government should cease and desist with all deliberate speed. And if we’re stuck with fuel economy regulation for the time being, then one agency should do it – under congressional supervision – not three agencies making it up as they go.

The Corporate Average Fuel Economy (CAFE) program is a case study in unintended consequences. During its first 25 years, CAFE boosted domestic sales of Japanese and European imports, which typically had a 50% higher mpg than American automobiles in 1975. Partly as a consequence of CAFE, the U.S. market share of foreign-designed vehicles increased from 18% in 1975 to 29% in 1980 and 41% in 2000 (National Research Council, p.15). Outcomes most Members of Congress neither anticipated nor desired when they created the CAFE program in 1975.

There are two main ways to increase a car’s fuel economy: (1) downsize the vehicle and (2) add new technology. Adding new technology raises new car prices, “forcing some consumers, especially those with low incomes, to hold on longer to their old cars,” observes my colleague Sam Kazman. In general, old cars are more polluting than comparable newer vehicles. In any event, lawmakers did not think they were voting to keep clunkers on the road when they created CAFE.

In addition, Kazman notes, CAFE “restricts consumer choice, since manufacturers are forced to pay more attention to what the law requires rather than to what consumers want.” Indeed, CAFE destroyed the market for what once was America’s most popular family car – the large station wagon. Automakers could not comply with CAFE and produce millions of very large, low-mpg station wagons. In 1975, how many Members of Congress knowingly voted to kill the family car?

A related unintended consequence was the much-derided SUV boom of the 1990s. No longer able to purchase big wagons, consumers started buying trucks with car-like body designs. Fuel economy zealots decried what they called the “SUV loophole” in the CAFE rules. But to millions of consumers, the supposed loophole was an escape hatch. A New Yorker cartoon on bureaucratic myopia put it well: “These regulations will fundamentally change how we get around them.”

Last and certainly not least, CAFE kills. This is hard for some folks to swallow, but it’s a matter of physics. Fuel economy regulation restricts the sale of larger, heavier vehicles. Such vehicles get fewer miles to the gallon than similarly equipped smaller vehicles, but they provide more protection in collisions. Heavier vehicles have more mass to absorb collision forces, and larger vehicles provide more space between the occupant and the point of impact.

A 2002 National Research Council study (p. 26) estimates that in a typical year (1993), CAFE contributed to 1,300-2,600 additional auto fatalities and ten times as many serious injuries.

We’re often assured that the reformed CAFE program established via the 2007 Energy Independence and Security Act (EISA) fixed the problem (often by the same folks who denied there was a fuel economy-safety tradeoff under the original CAFE program). However, even under the new “attribute-based” CAFE program, EPA and the National Highway Traffic Safety Administration (NHTSA) estimate that achieving their proposed 62 mpg average fuel economy standard by 2025 will require weight reductions of 15%-30% (Interim Joint Technical Report, p. 3-8).

Some of the proposed increase in fuel economy will come from technological innovation. Nonetheless, Kazman explains, “No matter what fuel-saving technologies we put into the car of the future, adding weight to the car will both lower its fuel efficiency and increase its safety.” Inevitably, fuel economy standards prevent people from buying all the vehicle safety they’re willing to pay for.

Congress should repeal the CAFE program. That’s not on the table this year. However, Congress may stop EPA, the NHTSA, and the California Air Resources Board (CARB) from making things worse.

Let’s start with a simple question: How many agencies does it take to regulate fuel economy?

Only one — NHTSA — if we follow the law (1975 Energy Policy and Conservation Act); three — NHTSA + EPA + CARB — if law is trumped by the backroom, “put nothing in writing,” Presidential Records Act-defying deal negotiated by former Obama Environment Czar Carol Browner.

On April 7, the House passed H.R. 910, the Energy Tax Prevention Act, by a vote of 255-172. The bill would overturn all of EPA’s greenhouse gas (GHG) regulations except for the GHG/fuel economy standards EPA and NHTSA jointly issued for new motor vehicles covering model years 2012-2016, and the GHG/fuel economy standards the agencies have proposed for medium- and heavy-duty trucks covering model years 2014-2018.

More pertinently, H.R 910 would prohibit EPA from issuing GHG motor vehicle standards for model years 2017 and beyond. It would also prohibit EPA from granting CARB waivers to do the same. The bill would leave intact NHTSA’s separate statutory authority to regulate fuel economy standards for automobiles after model year 2016 and trucks after model year 2018.

Bear in mind that GHG emission standards and fuel economy standards are largely duplicative. As EPA acknowledges, 94-95% of all GHG emissions from motor vehicles are carbon dioxide (CO2) from the combustion of motor fuels. And as EPA and NHTSA acknowledge, “there is a single pool of technologies for addressing these twin problems [climate change, oil dependence], i.e., those that reduce fuel consumption and thereby reduce CO2 emissions as well” (GHG/Fuel Economy Tailpipe Rule, p. 25327).

Ending the triple regulation of fuel economy by three different agencies operating under three different rules would save taxpayers money and reduce burdens on our beleaguered auto industry.

More importantly, ending triple regulation would help restore the separation of powers. The Clean Air Act provides no authority to any agency to regulate fuel economy. EPCA, a separate statute, authorizes EPA to monitor compliance with federal fuel economy standards (49 U.S.C. 329). The same statute authorizes the Department of Transportation, not EPA, to prescribe fuel economy standards. EPCA also forbids states to adopt laws or regulations that are even “related to” fuel economy. CARB’s GHG rules are massively related to fuel economy.

Given the potential for serious unintended consequences, every change in fuel economy standards, such as the proposed increase from 35 mpg to 62 mpg, should be subject to an up-or-down vote by the people’s representatives. At a minimum, Congress should terminate EPA and CARB’s fuel-economy power grabs.

We've seen a significant momentum shift by the Administration to favoring non-petroleum-based fuels and technologies, many of which may be promising but nearly all of which will have a much longer timeframe before they even begin to have a measruable impact in overall fuel consumption. And not all of those fuels and technologies (i.e. EVs) are going to work for the majority of drivers. In the meantime, the Administration should be assuring continued progress in near-term energy efficiency by balancing investments in proven and existing energy efficient fuels and technologies like clean diesel.

In Europe, half of all new cars sold have diesel engines because of their fuel efficiency and long-term cost of ownership value. Fuel tax policies in the past made diesel fuel the less-expensive option. Here in the US we could learn from that by instituting balanced and fair fuel taxation for both gasoline and diesel fuel and most importantly to stop penalizing energy-efficient fuels and technologies -- like clean diesel.

Clean diesel cars and SUVs get on average of 30 percent more MPG yet every gallon of diesel fuel is taxed 6 cents more in federal fuel taxes. Combine that with about 17 states piling on an additional premium state diesel fuel tax on top of that and the clean diesel car owner starts off with a penalty at the pump during every fill up -- that factors negatively into the tocal cost of ownership, and the consumers choice of a fuel saving technology.

Today's Federal diesel fuel tax policy is out of whack. The diesel premium was enacted in 1996 as a means for truckers to pay more into the highway trust fund with the condition to invest that in highway infrastructure improvements. Now with clean diesel cars making a bigger showing in the US, diesel fuel is not just for truckers anymore and along with the challenges of fiscal policy toward electric vehicles and highway use, begs for some rational approaches to fuel tax policies. At the very least the Congress should explore fuel tax policy that levels the playing field for gasoline, diesel and other technologies. At the very least, a means to keep clean diesel car owners from paying that 6 cent a gallon federal fuel tax premium intended for commercial vehicle fuel consumers.

Market forces should drive fuel efficiency and are. With high gas prices, new light duty vehicle purchasers are looking at smaller and higher mileage vehicles. CAFE regulations now being implemented will lead to further improvements in miles-per-gallon (MPG), but at a price--$1000.00 or more per vehicle. Before proposing post 2016 standards, the Department of Transportation should have an independent analysis conducted of how well the new standards are working and at what cost to consumers and manufacturers.

Using composites, roll resistant tires, variable cylinder technology, 5 and 6 speed transmissions, and smart fuel systems leads to increases in miles-per gallon. These technologies are gradually becoming standard on many vehicles as their costs are reduced. BMW has announced that it will soon be exporting to the US a version of its 320 series that gets 57 miles per gallon. There is no reason not to expect further improvements in engine technologies.

The challenge is not producing cars that get over 40 miles per gallon; those are available today. The challenge is to produce high miles per gallon cars that consumers want to buy. There can be big differences in tastes and needs based on demographics. People living in cities with easy access to public transportation are attracted to smaller, higher mileage vehicles. People who live in the suburbs or rural areas with families have a preference for larger cars and trucks. They accept lower gas mileage for convenience, needed mobility, and economic necessity. These buyers have the option of purchasing diesel powered vehicles which are about 30% more efficient but diesels are also more expensive that gasoline engines so demand has been limited.

The government is traveling a dangerous road in attempting to push transportation technology that is expensive and not market ready. Hybrid technology continues to improve and evolve but hybrids are at least several thousand dollars more expensive than their gasoline counterparts. Even at today’s gasoline prices, the pay back period can be very long for full size and SUV hybrids.

Electric vehicles being heavily promoted by the Obama Administration are simply not commercially viable except in niche markets. The Volt is not a true electric and the Leaf has limited range. Both are very expensive. The National Academy of Sciences(NAS) in 2009 produced a sobering critique of the state of battery technology. The cost per kilowatt hour is over 4 times greater than necessary for battery packs to be commercially viable. The NAS did not expect any significant breakthroughs that would significantly reduce costs for at least a decade.

The government does not have a good record in trying to force technology in the the consumer market or in forcing people to act contrary to their own self interest. Based on history, legislative and regulatory mechanisms will fall short of expectations and produce a range of unintended consequences. For example, adding to the cost of new cars will lead to slower turnover of the existing fleet meaning that less fuel efficient vehicles will remain on the road longer. People who have long commutes and who are induced to buy smaller, high MPG cars will be at greater risk as an abundance of data show.

If gasoline prices remain high, consumers will move to higher MPG vehicles and manufacturers will have an incentive to make technology advances that increase the MPGs in larger vehicles. If government uses the heavy hand of regulation to force manufacturers to produce vehicles that consumers don’t want, it will repeat the history of making manufacturers less competitive. We have been down that road before. The station wagon was a victim of CAFE and the SUV was the result of a loophole in the regulations.

While most people believe that we will face high gasoline prices for a far as the eye can see, they are being myopic. The history of oil prices is a history of cycles. Crude oil prices which drive gasoline prices are high for a number of reasons and those could change in the not too distant future. When they do, prices will once again start dropping and that will be in the best interests of consumers and the economy. Basing policy on $100 or higher crude oil prices is risky.