Apparently following the logic of the Fast and Furious franchise—that smoking cars are super sexy—chief executives of 18 carmakers sent a letter this week to newly confirmed EPA administrator Scott Pruitt, lobbying the agency to relax efficiency and emissions standards. These are the same standards that the automakers agreed to without protest after lengthy open negotiations with the EPA and the Department of Transportation early in President Obama’s first term—ones that they’re already on pace to meet.
The letter from the Alliance of Automobile Manufacturers echoes a nearly identical one sent to Trump days after the election. The CEOs of Ford, GM, and Fiat Chrysler made the plea for weakened standards to the president himself in a White House meeting last month. Despite agreeing with Obama that working within these rules was well within their technical and economic reach back in 2011, the carmakers claim that current restrictions “threaten future production levels, putting hundreds of thousands and perhaps as many a million jobs at risk.”
Wait, what are these standards, anyway?
In what turned out to be his first major climate policy victory, President Obama convinced the automakers to endorse new greenhouse gas emissions standards and a doubling of fuel economy standards from 2012 through 2025. Technically, these are two distinct sets of standards governed by two different agencies (the EPA and the DOT, respectively), but were formally and administratively linked in the national program unveiled with the auto manufacturers’ support in 2011.
[quote position=”right” is_quote=”true”]Ford can sell all the F150s it wants, so long as they burn less fuel.[/quote]
The EPA had never before regulated global warming pollution from cars, but a 2007 Supreme Court decision (Massachusetts v. EPA) essentially forced the agency to consider carbon dioxide emissions from cars under the Clean Air Act. After exhaustive environmental and economic review, the EPA released greenhouse gas emissions targets for various vehicle classes that the automakers would have to achieve.
These emissions standards were then aligned with fuel economy goals. Corporate Average Fuel Economy (CAFE standards) were originally introduced in the aftermath of the Arab Oil Embargo and resulting energy crisis when lawmakers realized that maybe gas guzzling wasn’t the most sound economic or national security practice. First enacted in 1978, the original CAFE standards were intended to roughly double the average fuel economy of a new car fleet to 27.5 miles per gallon by 1985. And there they stayed for more than two decades, until Congress increased them again in 2007 (to a target of 35 mpg by 2020), which the automakers fought tooth and nail in their quest to sell every suburban family a grossly outsized SUV that delivered greater per-car profits and required more maintenance from factory-qualified service departments.
Then the economy fell apart and Chrysler and GM nearly went bottoms-up. After tens of billions in taxpayer-funded bailouts (the first $17.4 billion of which, conservatives like to forget, was granted unilaterally by President George W. Bush), Detroit was in a position to play a little nicer with government regulators.
[quote position=”left” is_quote=”true”]We’ve come a long way as an industry and we need to keep going forward.[/quote]
The current program calls for a roughly 5 percent increase annually in fuel economy standards starting in 2012, reaching 54.5 miles per gallon by 2025. The agencies and carmakers agreed to a “midterm review” that was to occur “no later than 2017,” but after the election Obama’s EPA hustled to expedite the review and firmed up and finalized the rules for the final compliance period through 2025. The EPA’s report—backed by an independent scientific review by the National Research Council—found that thus far the targets have been reached or exceeded in every automotive class, including efficiency improvements in cars and trucks using plain-old internal combustion engines. The assessment also found that the 2025 targets can be met on time and at reasonable cost, with existing technology.
The auto execs, however, aren’t satisfied with the prospects of only selling some of the pricier SUVs and trucks, and would rather not have to worry a lick about lighter, cheaper, more fuel efficient options. They claim that consumers aren’t interested, and sure, it’s certainly true that cheap gas like we’ve been experiencing the past couple of years makes fuel efficiency less marketable.
But the rules actually take that into account already. The CAFE standards are sales- and class-weighted based on the size and footprint of the models, so every class of vehicles—from spritely subcompacts to big honking pickups—is pushed to boost efficiency by the same percentage. This is exactly what Detroit asked for when agreeing to accept the rules. Ford can sell all the F150s it wants, so long as they burn less fuel. What’s more—manufacturers get extra credits and can more easily reach their targets (and, thus, sell even more pickups) by selling the hybrids and plug-in vehicles that they breathlessly promote and uphold as examples of their innovation and technological leadership.
Why fight now?
Now may not seem like the time to engage in a Zoolander-esque gas fight between automakers, the EPA, and the American public. But as Roland Hwang of NRDC notes, over the past two years, fuel economy levels and vehicle sales have both hit historic highs, and the industry is wildly profitable. Since American taxpayers bailed Detroit out in 2009, more than 700,000 jobs have been added in the automotive sector, and, according to Hwang, “the fuel efficiency supply chain stretches across 1,200 factories and 48 states.”
Indeed, others in the auto industry are speaking up to defend the Obama-era standards. The CEO of Borg Warner, a Michigan powertrain parts supplier that makes $8 billion a year and employs more than 18,000 workers, sent a message to Trump at the Detroit Economic Club last week.
“Do not slow down the pace on CAFE standards,” he said. “We’ve come a long way as an industry and we need to keep going forward.”
