How Fuel-Efficient Cars Can Save Money -- and the Economy

How Fuel-Efficient Cars Can Save Money -- and the Economy

A Very Big Plan for a Very Green Future

As I was watching the San Diego Chargers play the Chicago Bears on Sunday afternoon — wishing somehow that both teams could lose — I saw a commercial for Ford's F-150 truck. No surprise there — car companies know their audience, and big parts of this one like to ride around the suburbs in two-ton hunks of metal. But I was surprised to see that the TV spot focused on the fuel efficiency of the F-150, which gets all of 23 m.p.g. on the highway.

There are two ways to take this kind of ad. One is that it's truly sad if Americans actually think that 23 m.p.g. makes for an efficient vehicle, especially when gas is over $3.40 a gallon and the average Chinese car has to get some 35 m.p.g. to be allowed out of the factory. The other is that if truck brands are being forced to tout their efficiency in ads — as opposed to their ability to tow 747s — then at least fuel economy has gone mainstream. As well it should: a recent report from the New America Foundation estimated that Americans will spend nearly half a trillion dollars on gasoline this year, up 25% from 2010.

It's clear we can't afford to guzzle gas anymore — and neither can the environment. That's why we should welcome President Obama's new proposal to increase auto-fuel-efficiency standards to 54.5 m.p.g. by 2025. That would be a doubling of standards, which are already set to increase to 35.4 m.p.g. by 2016. Automakers — who worry about how expensive and popular efficient cars will be — and many Republicans are skeptical of tougher fuel-efficiency standards, but the White House says that the rules could save consumers an average of $6,600 over the lifetime of a 2025 vehicle. "We expect this program will not only save consumers money, it will ensure automakers have the regulatory certainty they need to make key decision that create jobs and invest in the future," Transportation Secretary Ray LaHood said in a statement.

But the fuel-efficiency proposal could be just the first step to a leaner, meaner and greener economy — at least, if Amory Lovins has anything to say about it. Lovins, a former TIME 100 honoree, is chairman of the Rocky Mountain Institute (RMI), a think tank dedicated to promoting energy efficiency and renewable power. But that description doesn't do justice to the scope of Lovins' vision. In his new book Reinventing Fire, Lovins lays out a blueprint for essentially eliminating fossil fuels — using vastly improved energy efficiency as a cornerstone. "From a business perspective, this transition can be done, and it can be done profitably," Lovins told me on a recent trip to New York.

Right now, Lovins points out, the U.S. uses 93 quadrillion BTU of energy per year — with around four-fifths of that figure coming from fossil fuels like coal and oil. Current government projections estimate that U.S. energy consumption will continue to grow, rising to 117 quads by 2050. That's conventional wisdom; an economy will use more energy as it continues to grow, and current economic woes notwithstanding, growth will return. Our best hope then is to get out ahead of the energy-consumption curve, generating more economic output every unit of energy consumed.

But Lovins believes there's another way — that with the right policies, we can actually shrink energy use by nearly 25% by 2050 while more than doubling the economy, cutting carbon emissions by 80% and saving money. How? Lovins predicts that coal and oil and other fossil fuels will become increasingly expensive over time, even as wind and solar continue to fall in price, which will speed the transition to renewable energy. But efficiency will be even more important, as we use the savings from reducing energy waste to fund that shift. And Lovins sees a lot of waste around. "Buildings use three-quarters of our energy, and most of that is wasted," he says. "The savings we can reap are worth far more than the costs [of greater efficiency]."

How Fuel-Efficient Cars Can Save Money -- and the Economy