Monday 27 February 2017

Another Passing Environmental Grade for the Auto Industry? Sort Of

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Another Passing Environmental Grade for the Auto Industry? Sort Of

From the March 2017 issue

Lost amid the pre-election furor over Pussygate, #podestaemails, Russian hacking, and all the fake news in America’s Facebook feed was the auto industry’s greenhouse-gas report card for 2015. Issued in early November 2016, it was unsurprisingly good. Carmakers are now collectively four for four in exceeding the EPA’s de facto fuel-economy targets since they took effect for the 2012 model year. Then why, you might ask, did Auto Alliance, a trade group representing most of the automakers, fire off a letter to president-elect Trump just two days after the election, bemoaning its regulatory plight?

Another Passing Environmental Grade for the Auto Industry? Sort Of

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Not to be confused with the similar NHTSA-administered Corporate Average Fuel Economy (CAFE) program, the EPA’s greenhouse-gas emissions standards are based on the actual vehicles each company sells and incorporate incentives and credits that go beyond those available under CAFE statutes. Some carmakers prefer these more flexible rules, while others seem happier paying CAFE fines, a resolution not offered by the EPA. Regardless, no company has yet fallen out of compliance with greenhouse-gas emissions (although Volkswagen’s status is pending, based on the EPA’s ongoing Clean Air Act violation investigation). Compliance is getting tougher, though. Standards have increased by only 8 percent over the first four years but are projected to be 40 percent stricter by 2025. A temporary ­program for small carmakers that allowed some vehicles to adhere to a lower standard—used by Jaguar Land Rover, Mercedes, and Volvo—ended after 2015. And credits for flex-fuel vehicles, which many automakers have been using to comply with the law, are being depreciated.

But it’s not so much the EPA’s tightening screws that have the carmakers frustrated as it is the “regulatory friction” between the greenhouse-gas rules and CAFE. Auto Alliance says it anticipates “potentially billions of dollars in fines” from NHTSA, even if the industry is square with the EPA. Carmakers are also worried that consumers won’t be willing to buy costlier electrified vehicles, especially if gas prices remain low. And then there is the hated ­California Air Resources Board (and the nine left-leaning states that follow its rules), which persists in requiring high percentages of zero-emission-vehicle sales, despite the Obama administration’s promise of harmonization among the three sets of regs.

Harmony of any sort, however, seems as unlikely as Trump Republicans remembering that it was Richard Nixon who created the EPA. Shortly after the 2016 election and months before its deadline to do so, the agency moved to solidify greenhouse-gas emissions standards for 2022–2025. A week later, Oklahoma attorney general Scott Pruitt, a climate-change skeptic who has sued the EPA to block environmental rules, was selected to run the agency. We can only wait to see how this plays out. We wonder what Tricky Dick would think.

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