President Barack Obama will propose a significant increase in US auto fuel efficiency, setting the most aggressive standards to date. This initiative will also involve direct regulation of emissions for the first time and will resolve a dispute with California regarding cleaner cars. The proposal includes raising average fuel standards for all new passenger vehicles by 10 miles per gallon to 35.5 miles per gallon between 2012-16. This would result in a 30 percent reduction in climate-warming carbon emissions, totaling 900 million metric tons over the life of the program. The plan is expected to save 1.8 billion barrels of oil and will require all companies to produce more efficient and cleaner cars. The proposal is supported by major US and overseas automakers, including General Motors Corp and Toyota Motor Corp. In a statement, GM Chief Executive Fritz Henderson stated that GM and the auto industry will benefit from more consistency and certainty in guiding their product plans. Toyota Motor Sales USA President James Lentz mentioned that a single national standard will improve vehicle choices for consumers. The new program, as per the administration, will increase the cost of producing a vehicle by about $600 compared to the current law, which mandates automakers to achieve a fleet average of 35 mpg by 2020, a 40 percent increase from the current performance levels. US auto companies have been resisting significant fuel standard increases for many years until Congress and the Bush administration agreed to stricter targets in 2007. Some vehicles, mainly produced by foreign manufacturers, already meet or surpass the standards set to be proposed. California had initially sought a waiver to enforce its own regulations on auto emissions, but the Bush administration denied this request. Auto companies also took legal action against California, arguing that if other states followed suit, it would result in a complex set of regulations rather than a unified national standard. However, California has now agreed to abide by the proposed national standard if it is approved. Senator Barbara Boxer welcomed this decision, stating that it is a positive step towards reducing global warming and decreasing America's reliance on foreign oil. The reduction in emissions of 30 percent is more ambitious than what California and other states have been seeking. In April, the administration changed its policy by declaring climate-warming pollution a threat to human health and welfare, allowing for regulation of emissions. The new policy would allow automakers some flexibility in meeting the standards and would consider the environmental impact of carbon-based fuels and other vehicle systems that emit emissions. David Friedman, research director of the clean vehicle program at the Union of Concerned Scientists, sees this as a potential breakthrough for clean cars. The plan is based on an assumption of average gas prices reaching $3.50 per gallon by 2016, which officials hope will encourage consumers to choose more fuel-efficient vehicles. Automakers are actively working on improving hybrids and electric cars, but with recent decreases in gas prices due to reduced demand during the recession, sales of less efficient pickups and SUVs have increased. To boost the industry's sales, Congress is considering a bill that would provide consumers with up to $4,500 to trade in older, less fuel-efficient vehicles for ones with better gas mileage. Additionally, a key committee in the US Congress has started a week-long debate on climate change, with Democrats pushing for a bill to combat global warming and Republicans opposing a plan they believe will harm the economy.