Eight days before Donald Trump was sworn in as president of the United States, the Environmental Protection Agency decided to lock in higher standards for automakers meant to curb greenhouse gas emissions and raise the average fuel economy of their cars. Last week, the EPA officially changed its mind. The latest decision suggests the current EPA cares more about relaxing regulations at all costs, regardless of what experts say. It’s also one that dismisses breakthroughs already being made by the auto industry.
The agency, led by Scott Pruitt, now argues its predecessors “rushed” their approval out “just days before leaving office.” It says the standards are too high, will be hard for automakers to reach, and will cost consumers more. The current EPA provides little evidence to support these arguments, though, and instead relies heavily on talking points from auto industry lobbyists and old data.
Those things — not the most recent data or expert advice — are the foundation that Pruitt’s EPA is building on as it moves to undermine the previous administration’s work. That makes it a potentially shortsighted effort. It creates more uncertainty for the auto industry, a some $2 trillion global business. It also makes it considerably harder to address climate change, since it will be months before we know exactly how much the standards will change.
In the meantime, American consumers are caught in the crossfire. Especially now that SUV sales are on the rise, looser standards mean more money may end up coming out of consumers’ pockets and going straight to the gas pump — even if fuel prices stay low.
The standards in question were announced in 2009 and put in place in 2012. Since the EPA was setting targets that stretch a dozen years into the future, a mandatory “midterm evaluation” was written into the rules to make sure that the automakers were on track. It was also a chance for the EPA to definitively say whether it got the standards right in the first place, especially the most stringent ones that will apply to cars made after 2021 (or model years 2022–2025). The agency was supposed to use the midterm evaluation to take stock of all this and say whether those standards should be weakened, made stronger, or be left alone. It was supposed to be a point of no return.
The Obama EPA kicked off the midterm evaluation process in 2016 when it published a 1,200-page “technical assessment” written in conjunction with the National Highway Traffic Safety Administration (NHTSA) and the California Air Resources Board (CARB). The EPA wrote in the document that the automakers were, on average, already “over-complying” without hurting sales, and so it decided that the targets were appropriate. By model year 2025, automakers would hit an average industry fleet-wide level of emissions of 163 grams per mile of CO2, equivalent to an average fleet fuel economy of 54.5 miles per gallon — nearly double current levels.
The agency wrapped the review process in January 2017 when it published a document called a “final determination,” which summarizes all the information gathered by the EPA, the public comments it has considered, and other relevant data. Signed by former EPA administrator Gina McCarthy, it’s a dense 33 pages that support the agency’s decision with references to scientific studies, and it leans heavily on the work from the NHTSA, CARB, and EPA in the technical assessment report.
The original final determination document is dense and heavy on science
Those high standards are necessary to clean up the transportation sector — which recently passed electricity generation as the largest source of CO2 emissions in the US — the EPA argued. Keeping the rules in place could reduce greenhouse gas emissions by 540 million metric tons, and cut oil consumption by 1.2 billion barrels, the agency determined. Better yet, consumers would save $92 billion in fuel costs over the lifetime vehicles made during these years.
In March 2017, with Trump as president and Pruitt at the helm of the EPA, the agency decided to reopen the midterm evaluation process. On April 2nd of this year, the agency released its own final determination document spelling out the things it didn’t like about the decisions put forth in the January 2017 document.
One thing the current EPA claims is that the previous administration improperly rushed through the midterm evaluation process. When he announced the decision to revise the standards, Pruitt said the previous administration had cut the midterm review short “with politically charged expediency.”
Janet McCabe, who led the EPA’s Office of Air and Radiation under Obama and worked with McCarthy and the agency on the emissions program, says the January 2017 document wasn’t composed cavalierly. She points to the release of the technical assessment document in summer 2016 as evidence that the process was started well before Trump was elected.
The current standards — which are now in danger — could reduce greenhouse gas emissions by 540 million metric tons, and cut oil consumption by 1.2 billion barrels
“What the rules said was [the midterm evaluation had to be completed] ‘no later than April 1st of 2018.’ It didn’t say ‘on April 1st,’ it didn’t say ‘no sooner than April 1st,’” McCabe says. “My experience with EPA is that we were always missing deadlines, right? This was a situation where we felt like we could provide this information on a schedule that gave people more time to work with it and plan for the next steps.”
The previous EPA did more than enough work to back up its decision, says Dave Cooke, the senior vehicles analyst for the Union of Concerned Scientists. “They actually looked at the evidence, compared for and against specific positions, and then weighed it and explained why they decided what they did,” he says. “This [new final determination] completely lacks any of that.”
The differences between the quality of the two documents are stark, down to the formatting. While Pruitt’s final determination document is five pages longer than McCarthy’s, it’s also double-spaced. McCarthy’s is not.
But it’s the differences in the content that Cooke finds troubling. For one thing, he points to how Pruitt’s EPA follows up a claim that the current standards are “based on outdated information” with an argument based on 2016 data that was provided by lobbyists.
This data is used to support one of the most prominent arguments Pruitt’s EPA makes for revising the standards. The agency claims that people are buying too few electric vehicles, which are the most emissions-free option, and backs this up with a chart that shows a decline in total electric vehicle sales and EV sales as a percentage of overall sales.
The data was assembled by Ward’s Automotive Reports, HybridCars.com, and the Center for Automotive Research. But it was provided to the EPA by the lobbying group Association of Global Automakers as part of the public comment process last year. (Two of the three charts in the EPA’s document were picked from public comments submitted by auto industry groups.)
The chart only shows data from 1999 to early 2016, however, which means the EPA is basing its argument on sales data that is nearly two years old. More recent data (PDF) from those same groups shows that the dip has actually turned around. EV sales are on the rise again.
Besides, McCabe says, automakers only need fully electric vehicles to make up 2 percent of their fleets to meet the 2025 targets from the Obama administration, according to the previous EPA’s findings. EV sales trends, then, shouldn’t be as big a sticking point as the industry and Pruitt are making it out to be. The agency shouldn’t need to cherry-pick data here.
“This was a key finding that was backed up by significant information that there are enough gasoline-based technologies [to meet the standards]. Not just one or two, but a variety of them,” McCabe says. There are Atkinson cycle gasoline engines that offer better fuel economy by cleverly timing the opening and closing of an engine’s intake valve or 48-volt mild hybrid systems that give gasoline cars some of the benefits of a full hybrid without a major redesign, and more, she says.
These technologies are being popularized by major automakers like Toyota, which uses Atkinson cycle engines on everything from the Prius hybrid to the Tacoma pickup truck, and Volvo, which is adding the small 48-volt battery / motor system to all of its cars in 2019. They were considered in the work that went into McCarthy’s final determination document, too, McCabe says.
“We have this incredible auto industry that’s innovating all over the place, and what our scientists and engineers found was that they would be able to get there without a greatly increased number of electric and hybrid cars in the market,” she says.
Another argument Pruitt’s EPA has made in support of revising the standards is that poorer consumers will wind up footing the bill for high-emissions and fuel economy targets. Cooke says the opposite is true. People in lower income brackets do most of their car buying on the secondary market, he says, something the current EPA is ignoring in its work.
“When you stop citing and believing in evidence, you sort of have carte blanche to do whatever the hell you want.”
Since used cars typically cost less than new ones, the amount spent on fuel over the life of the vehicle matters more to lower-income buyers than the upfront cost, Cooke says. Any price increase caused by the standards — which the Obama EPA estimated could be around $875, which is not nothing — would be absorbed by people from higher income brackets, he says. But the resulting fuel savings benefit those who buy used cars, too. (The Obama EPA also found in its final determination that new car buyers would ultimately save an average of $1,650 because of fuel savings, despite the increased upfront cost.)
The EPA declined to comment on these specific points. Instead, a spokesperson simply sent a statement that read in part: “the Administrator believes the MY 2022-2025 GHG emission standards are not appropriate and, should be revised. EPA, in partnership with NHTSA, will further explore the appropriate degree and form of changes to the program through a notice and comment rulemaking process.”
For Cooke, the result of all this is a document that “is very, very thin on substance, and it lacks the sort of rigorous analysis of the final determination from last year,” he says. “When you stop citing and believing in evidence, you sort of have carte blanche to do whatever the hell you want. And that’s what this document is.”
McCabe agrees. “I don’t think it mentioned health or climate change one single time in the whole document. It is sort of insulting in the way that it emphasizes and fawns on industry comments in a non-critical way. It just asserts them and then [says], ‘Oh yeah, UCS made comments too,’” she says. “This is not the way that our administrative agencies should be doing their work.”
Does the EPA’s decision to change the standards mean that the cars we buy in the 2020s will be dirtier and less efficient? Right now, no. In fact, there might be reasons to believe that it won’t change much.
The EPA will now work with the Department of Transportation to carve out new proposed standards for 2022–2025 cars, which will likely be less stringent. These will be subject to public comment and will likely be the source of a number of legal battles. Until then, the current standards — the ones crafted by the Obama administration — remain in place.
The EPA has taken a strong deregulatory approach under Pruitt’s watch, but a number of his attempts to delay or roll back regulations have been stopped by the courts, often because of poorly crafted decisions. Cooke says we might be headed down that same path. The new proposal “will have to be a hell of a lot better justified it than what they put out [in the final determination],” he says. “There’s just there’s no meat on those bones.”
“There’s just there’s no meat on those bones.”
But the real fight over the standards might take place between the EPA and California, according to Maria Belenky, who has tracked a number of the EPA’s moves as the director of policy and research for policy shop Climate Advisers.
Since California was setting its own standards before the Clean Air Act was put in place in 1970, it was given a waiver that the state still uses today to set high standards on emissions and fuel economy. Twelve other states currently follow California’s standards. If the current EPA sets a lower bar than what California and other states enforce, the auto industry would either be forced to make cars that comply with the higher standards or make different cars for different markets. To get around this, the agency said in its final determination document that it was considering revoking the waiver.
Doing this would be difficult, though, Belenky says. “I don’t see the legal route of revoking California’s requirement to be anything but a delay for years and years,” she says. “The EPA will meet a lot of pushback both from civil society, and also lawsuits from the California side, and it will take a very, very long time to be resolved.”
If a long legal fight breaks out over this, Belenky says, automakers will probably still plan for the stricter Obama era standards in the meantime. “I can completely see a case in 2024 where we are what we are today, where California refused to back down in terms of its own requirements, the manufacturers didn’t want to meet two sets of standards — one in California, one in the rest of the United States — they continue to manufacture cars in line with California standards, and there are lawsuits on either side,” she says. “Delay is actually probably our best friend in this kind of scenario.”
The longer this gets drawn out, though, the more uncertainty the industry will have to deal with, McCabe says. “One of the things that frustrates a lot of us is hearing this administrator say that he is bringing regulatory certainty. He says that over and over again, and, in fact, he’s doing exactly the opposite,” she says. “The automakers signed onto and supported these rules as their roadmap through 2025, and he’s the one throwing uncertainty into that.”