President Obama gathered auto executives, auto workers, environmentalists, and top federal and California officials at the White House this week to unveil a new consensus on fuel economy standards. His plan will harmonize the federal government’s Corporate Average Fuel Economy standards (better know as CAFE) with tougher tailpipe standards for CO2 poised to take effect in California and 17 other states.

Obama traded up, according to close Detroit observer Jim Motavalli, who writes in  the New York Times’ Wheels blog that the new-and-improved CAFE is “roughly equivalent to those proposed under California’s tailpipe greenhouse-gas program.” As Motavalli and others noted, automakers had no choice but to join Obama and Governor Arnold Schwarzenegger’s  march to higher efficiency, with the feds holding their much-tightened purse-strings.

CAFE will start rising in 2012 and reach 39 miles per gallon for cars and 30 mpg for trucks by 2016, with a fleetwide average of 35.5 mpg. That’s quite a jump from the current standards of 27.5 mpg for cars and 23.1 for trucks. It’s quite an acceleration from the CAFE boost approved by Congress and President Bush in 2007, which would have not have reached a combined average of 35 mpg until 2020.

This is very good news for technology developers. As your author documented in early 2008, the 2007 upgrade would have required minimal implementation of next-generation technologies — such as advanced electric drivetrains and light-weight composite parts — that will be required to put personal transport on a path to sustainability.

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This post was created for Energywise, IEEE Spectrum’s blog on green power, cars and climate