U.S. automakers consistently have been great at grousing about safety and environmental regulations; in fact, that may be the only thing they’ve consistently been great at. Last week, this talent was again on display as they achieved one of their cherished goals — rolling back emissions and mileage standards set by the Obama administration in its final days.
During an appearance in Detroit, President Trump announced that he would reverse the Obama decision, allowing mileage and emissions standards for 2017 to 2025 to be reconsidered over the next year by the Environmental Protection Agency and the Department of Transportation. EPA Administrator Scott Pruitt and Transportation Secretary Elaine Chao hailed the move as a boon to the economy. “These standards are costly for automakers and the American people,” declared Pruitt, a former Oklahoma attorney general and one of the best friends the oil industry ever had in government.
The standards at issue actually were set not by two agencies but three. It didn’t escape anyone’s notice that the third wasn’t present at Trump’s show. That’s because it’s the California Air Resources Board, which believes the auto standards are not only reasonable but crucial for preserving clean air and combating climate change.
With the advent of Trump, California is the only party to the standards that still takes them seriously. Indeed, the state wasted no time in drawing its own line in the sand, filing a motion in federal appeals court the day before the Trump announcement, lodging notice that it intends to defend them. (The motion was filed in a lawsuit brought by the Alliance of Automobile Manufacturers challenging the standards.)
This is the Ft. Sumter moment of a longer, and potentially grisly, war. Under the Clean Air Act, California has explicit permission to set emissions standards that can be more stringent than the federal government’s. Because California accounts for more than 10% of all auto sales in the country, its rules effectively can become the national benchmark; the state’s rule calling for zero-emission cars to represent 15% of sales by 2025, for instance, already has been adopted by nine other states. Those 10 states account for one-third of all auto and light-truck sales in the U.S., helping to spur electric-vehicle programs at Ford, GM, Volkswagen and other manufacturers.
What’s yet unknown is whether the Trump administration will try to revoke the California waiver, which Trump didn’t mention at Wednesday’s announcement. Asked about the subject during his confirmation hearing in January, Pruitt was cagey — he didn’t say he would overturn the waiver but refused to commit to continuing it.
Even without a battle over the waiver, Wednesday’s rollback of emissions rules will give the feds and the state plenty to fight about.
At issue are standards for fuel efficiency and greenhouse gas emissions that were first set jointly in 2010 by the EPA and the National Highway Transportation Safety Administration covering 2012 through 2016. Two years later, those agencies coordinated with the California Air Resources Board to extend the goals through 2025. “Everybody thought it was a good idea for the EPA, NHTSA, and California standards to be harmonized,” says Janet McCabe, who helped supervise the process as a top official of the Obama EPA.
Because the goal was set so far ahead, the three agencies agreed to a “midterm review” to judge whether the 2025 standard, which called for overall fuel efficiency of 54.5 miles per gallon in the U.S. car and light-truck fleet, looked reasonable. Although the deadline for the review was April 2018, the Obama administration decided after several years of technical research and debate that the standard didn’t require changing. The EPA made the rule final one week before Trump’s inauguration.
The automakers threw a fit. In similar Feb. 21 letters to Pruitt, the Alliance of Automobile Manufacturers and the Assn. of Global Automakers urged that the Obama ruling be withdrawn. They didn’t explicitly advocate a reduction in the standards, only a return to the original April 2018 deadline to give the agencies time for a “data-driven” midterm evaluation.
This is largely smoke-blowing, since the original ruling was based on extensive data collection and embodied in a technical assessment of more than 1,200 pages. The automakers have implied that the standards in place would pose nearly a mortal threat to their survival and to autoworker employment. Trump parroted the industry position claims uncritically, calling the regulations “industry-killing” and asserting that with his action, “the assault on the American auto industry is over.”
This grim picture of the auto industry seemed to have dropped in, like so many statements issued by the White House, from some parallel universe. The truth is the industry has been thriving since the 2008 recession. The Alliance itself has been crowing that 2016 sales of 17.5 million cars and light trucks broke an “all-time record” and marked the seventh consecutive year of annual sales growth, “a first in automobile sales history.”
Employment on the manufacturing lines has grown by more than 50% since the post-recession nadir, to 941,000 in February from 624,000 in July 2009. As for a supposed “assault” on the industry, Trump seems to have forgotten that it was Obama who rescued U.S. automakers from extinction with an $80-billion bailout in March 2009.
Pruitt is almost certainly incorrect in asserting that the 2025 standards will be “costly for the American people.” His own agency has calculated that fuel savings and other benefits could be worth nearly a half-trillion dollars to the U.S. economy over the next eight years, even after subtracting the costs of meeting the goals. Loosening emission and mileage standards for American-made vehicles is likely to put U.S. automakers behind the curve set by their overseas competitors, and they’ll suffer in comparison.
The automakers’ whining about the difficulty of meeting the goals is routine whenever they face a regulatory initiative, whether it’s about seat belts or airbags or fuel efficiency. As a coalition of environmental groups pointed out in its own message to Pruitt, emissions and efficiency technology is progressing faster than the industry expected even a few years ago. The Obama EPA concluded that the automakers could even exceed the 2025 goals without much trouble but “decided to forego strengthening the standards in favor of enhancing the certainty needed to promote industry investment."
The industry and the regulators may not even be very far apart in their assessments. The crux of their disagreement is how many hybrid or electric vehicles will have to be on the road to meet the 2025 mileage standards. The technical assessment issued last July by the EPA, NHTSA and California forecast that the standards could be reached with “modest levels of strong hybridization” — including plug-in hybrids — “and very low levels of full electrification (plugin vehicles).”
“We concluded that a modest amount would be needed, and the automakers disagreed,” McCabe says.
The industry’s projections, however, seem to be stuck in neutral. In its Feb. 21 letter to Pruitt, the Alliance complained that the 54.5-mpg goal is unrealistic because “no conventional vehicle today meets that target.” Hybrids and EVs, the letter observed, account for only 3.5% of current vehicle sales. But the goal, of course, is still nearly nine years away; the point of setting long-term goals is that automakers have time to work toward them.
Everyone knows how deadlines and goals work, however: Without them, the job never gets done. As long as Trump, Pruitt and Chao aren’t serious about their responsibility to protect the air and climate, the task belongs to California. Think of the state as protecting its environment by, um, building a wall.