EPA gathers consumer data as it rethinks GHG standards

Source: Camille von Kaenel, E&E News reporter • Posted: Friday, August 18, 2017

U.S. EPA is gathering data on consumer preferences and jobs as it reconsiders the feasibility of greenhouse gas standards for motor vehicles.

The Trump administration announced last week it will take public comments and hold a public hearing on changing the standards for model years 2021 to 2025, though the schedule hasn’t yet been set (Climatewire, Aug. 11).

If it were to choose to lower the standards, it would need to justify the change by supplementing past research with new information.

EPA has met in the past few months with automakers, regulatory experts at Indiana University and analysts at IHS Markit to better understand how Americans choose their cars, according to memos it uploaded to the regulatory docket.

The expanded scope of its new review fulfills a request by automakers, who say the increasingly stringent rules are too difficult to meet given Americans’ preference for gas-guzzling trucks.

EPA found in a technical report last year the automakers are developing technology that could meet the standards through 2025 at a lower cost than anticipated.

Chris Grundler, head of EPA’s transportation office, told automakers at a conference this month he had heard “loud and clear” automakers’ request that the agency consider markets and consumers, not just technology.

EPA held a June 22 meeting with the Alliance of Automobile Manufacturers and Global Automakers that was also attended by representatives of car companies, the National Highway Traffic Safety Administration and the California Air Resources Board, to go over the data, according to a memo from the meeting. In a presentation, EPA notes it is “trying to understand why there is so much variation” in estimates of consumers’ willingness to pay for vehicle attributes like fuel efficiency.

Automakers expressed concerns about EPA’s modeling and “significant differences” with an analysis by NHTSA that says new vehicles sold will fall below the fuel efficiency target starting in 2016, although automakers are projected to be able to comply with the standards through 2025 using credits.

EPA’s presentation notes it is pursuing access to a “consumer satisfaction database,” as recommended by the automakers. EPA has reached out to IHS Markit for its research on consumer choices based on demographics, brand loyalty and preferences, according to a May 10 meeting with representatives of the firm. One of the questions: “Are the standards regressive (i.e., putting disproportionate burden on low-income households)?”

EPA technical staffers have also met with a team at the Indiana University School of Public and Environmental Affairs that has modeled the broader macroeconomic impacts of the vehicle standards. They found that the standards would create thousands of jobs in the long term through gas savings and supply chain innovation but could dent jobs in the near term because of the cost of the vehicles.