Thursday, March 16, 2017

Trump’s new plan to roll back Obama’s fuel economy rules for cars, explained

Brad Plumer · Wednesday, March 15, 2017, 10:07 am

Bit by bit, President Trump is starting to rewrite the multitude of policies the Obama administration put in place to fight global warming. Today’s target is a big one: the fuel economy standards for cars and light trucks.

In 2011, the Obama administration began crafting sweeping new rules that would steadily increase the efficiency of US passenger vehicles through 2025. By the final year, the Environmental Protection Agency expects new cars and light trucks sold in the US to average roughly 36 miles per gallon on the road, up from 25 mpg today.

These rules are hardly an ideal climate policy, since they only apply to new cars (not the millions of cars already on the road), and since they’ve been undercut by cheap oil and the growing popularity of SUVs. But it’s one of the few federal programs aimed at greening the US transportation sector, which accounts for one-third of carbon dioxide emissions. And the car rules were a centerpiece of President Obama’s climate agenda, along with the Clean Power Plan (which Trump is planning to dismantle):

So that brings us to today’s news. Obama’s vehicle standards are largely locked in through 2021, but they can still be altered for 2022 to 2025. As one of its final acts, Obama’s EPA raced to finish a scheduled “midterm evaluation” that concluded the standards should be kept in place without changes through 2025. But the Department of Transportation hasn’t yet signed on, giving Trump an opening to revisit the rules.

At an event with automakers in Michigan, Trump is announcing that he’ll tell the EPA to redo that midterm evaluation. Once that's done, the EPA could work with the Department of Transportation to develop new — and possibly less stringent — vehicle standards for 2022 to 2025. US automakers have asked Trump to rethink Obama’s proposed rules, which they call overly aggressive and costly to meet. Depending on what tweaks are ultimately made, this could increase US carbon emissions.

"I think every [automaker] that produces SUVs and pickups will benefit from a rollback," Sergio Marchionne, CEO of Fiat Chrysler, told reporters at the Geneva Motor Show.

Except there’s a major twist here. Technically, if the federal government goes too far in weakening Obama’s fuel economy standards, California has a waiver under the Clean Air Act allowing the state to maintain its own, stricter car rules that other states can adopt — a messy possibility that automakers hate. On top of that, California has a waiver for a program pushing automakers to sell more “zero-emissions vehicles” (mainly electric cars). New York and eight other states have also adopted this ZEV mandate, and it’s a major impetus for US electric car sales.

In the months ahead, Trump could conceivably ask EPA head Scott Pruitt to look into rescinding California’s waivers if the state won’t play along. This isn’t part of today’s announcement, and it’s wildly unclear if the courts would even allow this, but Trump’s reportedly mulling such a step. If he does go after the waivers, that could potentially put a major damper on electric car sales in the years ahead. It’s a big deal, so let’s take a closer look at how this all works.

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