Lobbyist urges restraint on CAFE changes

Source: Camille von Kaenel, E&E News reporter • Posted: Tuesday, April 18, 2017

Automakers are urging restraint as academics propose alternatives to vehicle mileage and emissions standards that the Trump administration has started reconsidering.

Car companies have told the government the current emissions standards through 2025 are difficult to meet because Americans are buying gas-guzzling trucks. But Chris Nevers, the vice president for energy and the environment at the Alliance of Automobile Manufacturers, told a panel of free-market think tankers Friday that automakers had concerns about rewriting the current regulations.

“We don’t want to repeat this process again and again and again dependent on the administration,” he said. “You can see a rapid cycling of this where standards get issued and pulled back and reissued.

“The industry wants some certainty on where the standards will be, but you need them to be sustainable,” he added.

He said he was “interested” in any proposal to improve the current system but cautioned that fundamentally changing the rules would need 60 votes in Congress, and he did not see that happening.

Automakers lobbied President Trump heavily to reconsider the rules as soon as he won the election. They said the Obama administration rushed to finalize the rules in its final days, and Trump agreed, reopening a review last month.

Now, U.S. EPA and the National Highway Traffic Safety Administration have until April 2018 to decide whether to lower the tailpipe requirements for 2022 to 2025. California has vowed to plow ahead with its own stringent version of the rules, raising the possibility of a showdown over a patchwork of regulations.

The White House will seek to broker an agreement with the California Air Resources Board (Greenwire, April 12).

Nevers acknowledged that automakers have met and exceeded the fuel economy standards so far.

“For the first couple years, things were going great,” he said. “Even our internal modeling showed that the fleet could meet the standards out to 2020 standards. We all knew that there would be overcompliance.”

That’s changed, he said. The drop in fuel prices has prompted consumers to buy more gas-guzzling trucks. Data released by NHTSA show automakers falling behind the fleetwide fuel economy target for 2016, although they can still meet the standards using credits banked from earlier years of overcompliance.

Flexibilities within the program, like credits for flex-fuel vehicles, are also gradually getting restricted, Nevers argued. Continuing record high sales are “not a given” either, he said.

“It doesn’t look good,” he said.

Last week, Mitch Bainwol, president and CEO of the Alliance of Automobile Manufacturers, called concerns that the standards would be rolled back “fallacious.” He said automakers were seeking to adjust the timing of the requirements, not the ultimate targets.

Environmental advocates fear any change to the standards would mean more pollution and fuel use.

Academics have seized on Trump’s reconsideration of the rules to propose alternative regulations.

Nevers was speaking at an event held by the libertarian R Street Institute promoting “clean tax cuts” for automakers who reduce their emissions. The proposal by Ian Adams would grant corporate tax cuts to automakers who overcomply with the current regulations.

“We want to stick to things that are a positive feedback loop rather than a negative feedback loop,” said Rod Richardson, the president of the Grace Richardson Fund. “Whether [the climate change problem] does or does not exist, you could still address it with benefits to the economy with supply-side economics.”

Former Obama officials have proposed a cap-and-trade system for vehicle emissions (Climatewire, March 28).