2018 Vermont Law Top 10 Environmental Watch List

Fuel Efficiency Standards Trumped?

Transportation accounts for 27 percent of total United States greenhouse gas emissions, with passenger cars and light-duty trucks being the largest source. Section 202 of the Clean Air Act requires the Environmental Protection Agency to address this through emissions standards for air pollution from cars and trucks. In January 2017, the EPA administrator completed a midterm review of the model year 2017-2025 greenhouse gas emissions standards and determined that the standards for model year 2022-2025 were appropriate. These standards were the agency’s first serious tightening of fuel efficiency standards since the 1970s. In addition to reducing oil consumption and the associated carbon emissions, the standards would save Americans billions of dollars at the pump. But now they may not take effect at all. In March, the Trump administration reopened them for comment, indicating that the EPA may adopt less stringent standards instead.

Fuel Efficiency Standards

Click on the photo to watch a video on this topic with article co-author Nicole Webbert.

The 2012 rulemaking in which the EPA set the greenhouse gas emissions standards also established Corporate Average Fuel Economy (CAFE) standards under the Energy Policy and Conservation Act, as amended by the Energy Independence and Security Act. In a somewhat confusing arrangement, it is the National Highway Traffic Safety Administration that is responsible for regulating the CAFE standards, which were originally created in the 1970s to reduce dependence on foreign oil. The CAFE standards apply to a manufacturer’s entire automobile fleet, creating an average that the fleet must reach as a whole. This means that the manufacturer can maintain production of their gas-guzzling SUVs but must provide more fuel-efficient vehicles as well.

By reopening the standards review, Trump has allowed the automobile industry another chance to weaken the standards, after their unsuccessful effort to do so in the last comment period. Environmentalists decry this as a step backward from achieving greater efficiency and reducing carbon emissions. The auto industry’s desired changes would cripple the standards, rolling back the push forward for decreased emissions and fuel-efficiency innovation.

The auto industry contends that the regulations are too cumbersome, and the market economy should be the driver of change toward more fuel-efficient vehicles. Some companies, however, such as Nissan and Honda, state that they will continue their efforts toward improved fuel efficiency. Globally, emissions regulations are tightening, making it prudent to retain stricter standards. Already, 169 nations have adopted the Paris Agreement with a major component of the agreement involving the reduction of emissions and better management in the energy sectors. The auto industry operates on a global platform with cars produced for and in multiple countries. If these standards are stricter elsewhere, it’s advisable for domestic manufacturers to reach those levels so they can compete globally.

Ultimately, the severity of the impact of weaker standards also will be influenced by whether the EPA revokes the “California waiver,” which allows California to implement a higher fuel efficiency standard than the federal standards. If the California waiver is not revoked, California and other states should be able to adopt stricter standards than the federal one, lessening the blow of the Trump administration’s actions.

If the Trump administration does adopt weaker standards, they will have to overcome various legal challenges. The auto industry made the same arguments for why the standards should be weakened during the previous comment period, but was unsuccessful in convincing the EPA of the merits of its desired changes. When former EPA Administrator Gina McCarthy made her determination, she also created an extensive record addressing the auto industry’s arguments and supporting her ultimate decision with technical data. If the current administration wants to adopt more lenient standards, it will have to explain why. The existing record will make it hard to do so in a legally defensible way.

The EPA had stated in its 2017 mid-year review that the auto industry was on track to meet the 2022-2025 standards. Maintaining the 2022-2025 standards as they were would reduce carbon emissions, reduce dependence on oil, and maintain, if not increase, jobs in the auto industry, while rolling them back only puts more profit in the pockets of executives and shareholders in these industries. Now, the standards the industry was already on track to meet may be weakened, and the auto industry allowed to stall innovation. The best hope for continued progress may be the progress already made: the rapid pace of auto industry innovation, as documented in the extensive record from the 2017 determination.