The Trumpster has made it clear he plans to take a wrecking ball to the Environmental Protection Agency, which he blames for imposing a welter of regulations that make American businesses unable to compete in the global economy. One part of those regulations involves CAFE, or Corporate Average Fuel Economy, rules that have been in place since the time of the first Arab oil embargo in 1973.
The nation’s automakers are hyperventilating to the Trump transition team that the proposed emissions standards are too rigorous and will cost too much money to implement. This is 100% Grade A horse puckey, of course. What the autonistas don’t want people to know is that most manufacturers are already close to meeting those future targets. Due to a quirk in how the regulations developed, fuel economy is calculated differently for CAFE purposes than it is for the numbers you see on the window sticker when you shop for a new car.
Years ago, the EPA realized its fuel economy numbers were an exercise in magical reality, so the agency adjusted its procedures to make its estimates closer to what drivers could expect to see in real-world driving. The new methodology was not applied to CAFE calculations, however. In order to compare the two, it is necessary to reduce the CAFE number by about 30%. The 54.5 mpg number the car companies are so frightened of is closer to 38 mpg in actuality.
The Sky Is Falling!
The car companies are screaming “The sky is falling!” when they already have cars that meet or exceed the standard proposed for 2025 in their lineups today. The issue is not that they can’t meet the standards. The issue is they don’t want to. The hottest selling vehicles today are gargantuan pickup trucks like the Ford F-150 and SUVs like the Chevrolet Suburban. Car companies are raking in profits of $10,000 or more on those vehicles. Of course they don’t want to see the gravy train come to an end.
There are rumblings that the Trump administration might do away with CAFE regulations all together. Let the manufacturers build what they want. Create jobs! Put America back to work! Pay no attention to the melting ice caps! There is business to be done and profits to be made! Damn the rising seas! Full speed ahead! Welcome to the United Hates of America, where any insult to a civil society is tolerated — even celebrated — so long as it puts money in the pockets of CEOs and hedge fund managers.
The View From California
The California Air Resources Board sees things from a rather different perspective. “The ARB is definitely committed to cutting greenhouse gas emissions 40 percent below 1990 levels by 2030,’’ says Dan Sperling, one of the CARB board members. “I don’t think the California effort will be much affected.’’
Last Thursday, California’s governor Jerry Brown tweeted that California will “continue to confront the existential threat of our time — devastating climate change.’’ CARB Chairman Mary Nichols tweeted, “California’s commitment to clean air and climate protection has been strengthened by this election.’’ Nevertheless, CARB has pushed back an important meeting from December until next February so it can better assess the new landscape that results from the latest election.
In order to meet the CARB target, 40% of all new cars sold in California will need to be zero emissions vehicles by the year 2030. Today, ZEV sales account for only 3% of in-state sales. Clearly, the path California has chosen and the scorched earth policies of Donald Trump are on a collision course.
The Clean Air Act
The state of California is permitted by the Clean Air Act to make its air quality standards more strict than prevailing national requirements. With the presidency, the Congress, and the courts now solidly under the control of “burn the house down to save it” Republicans, the Clean Air Act could be amended to prohibit California from charting its own course. Under the preemption doctrine that has long been a part of federal law, any state laws that conflict with federal statutes must yield to the national interest.
If that happens, California could look to the courts for help. There are over 300 vacancies in the federal courts at the moment, thanks to the Republicans’ refusal the past 8 years to approve any judges submitted by president Obama. As soon as the new Congress meets next January, we can expect those vacancies to be rapidly filled by hardline ultra-conservative judges who will hew slavishly to the party line.
How will this conflict between California and the Trump administration get resolved? Robert Bienenfeld, assistant vice president for US environmental policy at Honda says, “Maybe automakers will need to come to the defense of the EPA. We need an enforcement agency to make sure everyone is playing by the same rules. There are lots of good rules that are broadly supported by the public. The wholesale disbandment of EPA is unthinkable.’’
California has always been the tail that wags the dog when it comes to emissions rules simply because more new cars get sold there than in any other state. Automakers simply cannot accept the possibility that they might be prevented from selling their products in there.
What other countries do will also play a role. Banning the sale of fossil fuel cars in the near future is something many European countries are moving toward. China is also taking aggressive steps to transition to a low-carbon or zero-carbon transportation system. Even if Trump blows up the EPA, automakers will still be faced with tough emissions regulations in global markets. It is often much more expensive to build different versions of the same cars for different markets than it is to build one version that conforms to the rules in every market.
If the car companies had their way, there would be one set of emissions regulations for all global markets. If that ever happened, the rules would likely be a lot closer to the CARB model than they are to the “anything goes, hands off” approach we expect to see from The Donald.