California and Washington, D.C., are on a collision course, and neither seems likely to pull the emergency brake. The two are locked in a bitter clash over fuel efficiency and greenhouse gas (GHG) emission standards for new passenger vehicles and light trucks sold in the United States, the world’s second-largest market for motor-vehicle production and sales.
The origin of fuel efficiency standards for motor vehicles in the U.S. is well-known. Retaliating for America’s support for Israel in the 1973 Yom Kippur War, the Organisation for Petroleum Exporting Countries initiated an oil embargo, leading to crippling economic effects in the West. To inoculate the U.S. from supply disruptions in the Middle East, Congress established Corporate Average Fuel Economy (CAFE) standards that an automobile manufacturer’s fleet of cars and light trucks have to achieve. Since their inception, CAFE standards have been raised many times, saving consumers money at the pump, fostering technological innovation, and leading to lower national oil consumption.
When fuel economy standards were updated in 2010 under the Obama administration, then-Environmental Protection Agency (EPA) Administrator Lisa Jackson added standards for GHG emissions for new passenger vehicles and light trucks. California, the only U.S. state that can seek a waiver from the EPA’s prohibition on states from enacting emissions standards for new motor vehicles, had previously petitioned the George W. Bush administration to implement carbon pollution standards for light-duty vehicles sold within its borders, only to see its application denied. California’s exemption from the EPA’s ban stems from the state’s (previous) severe air pollution, which was – and to a lesser extent, still is – caused by a confluence of unfavorable topography, persistent sunshine, and a large number of vehicles on its roads. Its clean-air agency, the California Air Resources Board (CARB), predates the EPA and has enormous regulatory authority. While they cannot set their own motor vehicle emission standards, states are allowed to adopt California’s, per the Clean Air Act. If they do not do so, federal emissions standards apply. Currently, 12 other states – with a population of 113 million and a market share for new car sales in the United States of approximately 30 percent – have adopted California’s standards.
CARB, led by Chairwoman Mary Nichols, eventually had its waiver granted. But faced with concerns from auto manufacturers that they would have to comply with two different set of standards when selling vehicles in the United States, Chairwoman Nichols agreed to align her state’s regulations with that of the EPA and the Department of Transportation (DOT), provided that they increase in stringency to reduce GHG emissions and oil consumption. Serving during the Obama administration, DOT Secretaries Ray LaHood and Anthony Foxx and EPA Administrators Jackson and Gina McCarthy kept their end of the bargain. But now, the Trump administration, in response to a request from automakers, wants to modify the previously agreed-upon standards for the model years 2022-2025. And California, to put it lightly, is not happy.
“What were you thinking …when you threw yourselves upon the mercy of the Trump administration to solve your problems?” Chairwoman Nichols demanded of representatives from major automakers at a public hearing in March 2017, as the 16-member board unanimously reaffirmed the existing standards. Any attempt to revoke California’s previously-granted emissions waiver would spark a “war,” Chairwoman Nichols said earlier this year.
In their 2017 announcement that they would revisit the Obama administration’s final rule regarding the GHG emission and fuel economy standards for 2022-2025 models of light-duty vehicles sold in the United States, DOT Secretary Elaine Chao and EPA Administrator Scott Pruitt said that they will release their final determination by April 1, 2018. It is hard to overstate the significance of this imminent determination. The transportation sector accounts for 27 percent of America’s GHG emissions. Of that 27 percent, 60 percent stems from emissions from light-duty vehicles, those subject to the regulations currently under review. More stringent CAFE and carbon pollution standards for passenger vehicles and light trucks were key elements of former President Obama’s climate action plan, which centered on America’s pledge to reduce its GHG emissions by 17 percent by 2020 relative to 2005 levels.
But maybe more important, U.S. fuel economy regulations spur technological innovation, bring alternative vehicles to market, and accelerate the construction of electric vehicle charging stations. In addition, as aforementioned, the U.S. is the world’s second-largest manufacturer of passenger cars and commercial vehicles – producing double that of birthplace of the modern automobile, Germany. Any changes to U.S. regulations and standards have enormous implications for America’s international competitors.
So, check your news notifications regularly between now and April 1. An enormously consequential decision is set to be announced.
Luke Sherman is an MPP Candidate at the Hertie School of Governance. He obtained his Bachelor of Science degree in Environmental Studies and French at Tufts University in Massachusetts. He is currently on Professional Year analyzing matters regarding climate and development.