Op-Ed: How Looser Emissions Standards Hurt the Auto Industry

Source: By Margo Oge, New York Times • Posted: Monday, April 2, 2018

The Trump administration is considering relaxing greenhouse gas and fuel economy standards for passenger cars and trucks.Christopher Occhicone for The New York Times

Just days after Donald Trump was elected president, the auto industry asked him to relax greenhouse-gas and fuel-economy standards for passenger cars and trucks. A year later, the Trump administration is reportedly about to grant that request, an action that, rather than helping the industry, will hurt its long-term competitiveness and stability.

The standards in question, put in place by the Obama administration, make cars cleaner to drive and cheaper to own. By 2025, they would nearly double fuel economy to 51.4 miles per gallon, as measured in a laboratory, which is equivalent to a real-world average of 36 m.p.g. Compared with the real-world average of 26 m.p.g.for compact and midsize cars in 2016, the standards call for an improvement of about one mile per gallon per year over the next nine years.

This fuel efficiency would result in a reduction of as much as six billion tons of carbon dioxide pollution and, through better fuel efficiency, $1.7 trillion in savings at the pump through 2025, good deals for the environment and consumers alike.

Rolling back the standards is a further retreat from the promise the United States made to the world in the Paris climate agreement and would harm public health, the environment and our international standing.

This retreat would also be bad for business. Selling gas-guzzling cars and trucks might continue to drive short-term profit, as some in the auto industry believe, but abandoning the standards now in place would run counter to the longer arc of consumer demand, state regulations and international market forces. Looser standards now, when consumers and many states are demanding cleaner cars, would spell trouble for the auto industry.

One of the biggest speed bumps for this deregulatory effort will be California. The state has the unique, and congressionally mandated, right to set emissions standards for itself that are higher than federal limits. Under Section 177 of the Clean Air Act, around a dozen other states have adopted California’s standards, which match the current federal requirements for fuel efficiency. Officials from those states have said they would go to court to challenge any effort by the Trump administration to weaken the current standards.

Those states represent about a third of the American auto market. Relaxing the federal standards would fracture the American car and truck market and leave automakers facing the prospect of producing different cars to meet different standards — undoubtedly a costly undertaking that consumers will bear. And the litigation would cloud the future and frustrate planning.

Rolling back these regulations would also steer America in the opposite direction of where the rest of the world is going and make domestic manufacturers less competitive.

Norway has set a goal of restricting sales of new vehicles to electric or plug-in hybrid models by 2025. France and Britain have pledged to end the sale of diesel and gas cars by 2040. Germany, the Netherlands and India are actively considering similar moves. Perhaps most important, China has a new zero-emission-vehicle mandate, modeled on the California program, which requires that such vehicles represent 8 percent of new car sales in 2018 and 12 percent by 2020. China is already General Motors’ largest market.

Not all automakers want to weaken standards. Bill Ford, the executive chairman of Ford, and Jim Hackett, the company’s president and chief executive, said in a statement this week, “We support increasing clean car standards through 2025 and are not asking for a rollback.” They called for “one set of standards nationally,” but also “flexibility” in meeting them.

They added that “we believe we must deliver” on reductions in carbon dioxide emissions that are “consistent with the Paris climate accord.”

G.M.’s chief executive, Mary Barra, whose company has invested in the hybrid Volt and all-electric Bolt model, has expressed support for keeping the current nationwide fuel economy standards and has sought an extension of tax credits for producing electric vehicles. Toyota expressed its commitment to “help keep our winters winter” in an ad campaign during the Winter Olympics. And Volvo and Jaguar have declared that their entire fleets will be “electrified” in the near future.

But at the same time, the main American industry trade group, the Alliance of Automobile Manufacturers (“We are the voice for a united auto industry”), has continued its drumbeat for weaker standards. What gives?

More automotive executives need to step up to support the existing standards. The auto industry supported the standards when they were instituted, and the numbers support their viability — and profitability. Approximately 25 percent of the 2017 models meet the 2020 standards, and auto industry profits are touching 10-year highs.

The clock is ticking before the Trump administration slashes the standards. None of the auto manufacturers can afford having American policies that put them in reverse — nor can their customers or the planet.

Margo Oge, the director of the Environmental Protection Agency’s Office of Transportation and Air Quality from 1994 to 2012, is the author of “Driving the Future: Combating Climate Change with Cleaner, Smarter Cars.”