Trump and CAFE



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Sunday March 19, 2017 Trump and CAFE Last Wednesday President Trump traveled to Detroit to announce changes that would impact the CAFE standard rules set in place by President Obama.  I feared the worst but what we got was probably the most rational thing that the Trump administration has done so far.


In 2012 the EPA issued rules that set fuel economy standards for the period from 2017 through 2025.  Under these rules each automaker had to achieve a combined fleet fuel economy of 54.5 mpg.  Part of that ruling included a mid term review to take place in 2018 which would determine if these numbers were even feasible and adjust the 2025 target if necessary.  One week before President Obama left office the EPA issued a notice that they would keep the 54.5 mpg target and the 2018 review was dropped. 


One of the first things that happened when President Trump took office is that he met with the heads of the US carmakers and they told him the usual story of how these standards couldn't be met and asked for them to be lowered.  It was the same old story we have heard before with almost every mandated innovation;  meeting the standard would make the cars too expensive for people to afford and would cost the US a million jobs.  They also took a shot at California emissions standards saying that they want one nationwide standard for fuel economy.


It was widely expected that the Trump Administration would roll back the existing CAFE standards and attempt to cancel the California waiver.  Neither of these things happened.


What did happen is that President Trump rolled back the EPA action taken in the last week of President Obama's term which means that, for now, the 54.5 mpg target for 2025 is still in place but this requirement will be reviewed in 2018 allowing it to be reduced or eliminated then.  The President also chose, at least for now, to leave the California emissions waiver in place too, which means that California can continue to set it's own emissions standards and other states can chose to follow the Federal standard or the California standard. 


The reasoning behind this action is that while rolling back an executive order from the last week of the previous President's term is quite easy there would be a much bigger fight trying to roll back the actions from 2012.  It is just much easier to make changes at an already scheduled review.


The California Waiver is an even more difficult problem and California has vowed to not give up it's right to set clean air standards without a fight.  Not going after the existing waiver but waiting until this waiver has expired also makes some sense and it is quite likely that the EPA would loose the fight to scrap the existing waiver in court no mater how badly Scott Pruitt would like to hand that over to his buddies in the fossil fuel industry.  The granting of the California waiver is written into the clean air act which was signed into law by Richard Nixon in 1970.  This law includes a statement saying that the EPA will grant a waiver to California.  To revoke the waiver would require one of two things to happen.  First there would need to be a major amendment to the clean air law to remove that clause, or the EPA would have to show that Federal clean air rules would be more effective than the California rules.


It should be pointed out that California does not have the right to set vehicle fuel economy standards.  It is only able to set emissions standards.  This does mean that they cannot, for example, continue to require 54.5 mpg by 2025 even if the Federal fuel economy standard is rolled back to a fleet average of say 35 mpg.  What they can do is to require the automobile manufacturers to sell cars in the state of California that produce a certain level of air pollutants which is less that the Federal Standards.  Currently the California rules include a provision for the manufacturers to sell a certain number of cars that have zero tail pipe emissions.  Note also that these rules apply only to sales of cars in California and the other states that have elected to use the California emission rules instead of the Federal ones.


Why is President Trump's stance on this important?  While the fossil fuel industry clearly has a huge influence on the current Republican administration and would like to see fuel and air pollution standards lowered or eliminated, this does not apply to the rest of the world.  If US automakers are given a pass they are going to become the next steam engine manufacturers.  As a young boy growing up in the UK I can remember a railway system that was driven by steam locomotives.  These were rapidly being replaced by diesel powered trains and the companies that didn't move to producing diesel locomotives quickly disappeared.  The same thing is going to happen to a car industry that puts its faith in big SUVs that spew high levels of pollution, including CO2.


The rest of the world is moving rapidly to set higher and higher fuel economy standards and their car makers are responding by producing cleaner vehicles, mostly through electrification.  In the long run, as former GM CEO Bob Lutz once said, "Electrification of the automobile is a foregone conclusion".  Those companies that don't recognize this and plan accordingly are doomed and the weakening of fuel economy standards is, in the end, going to make it less likely that they will be able to play catch-up and survive.


As someone who has lived in the Los Angeles area I can personally attest to the success of the California emission rules.  Air in the state is much cleaner that it was 35 years ago when I first came here.  The bad news is that certain areas of California, including the Los Angles basin are still the most polluted areas of the nation so we still have a long way to go.  The California emission rules have directly led to many innovations that makes everyone's air cleaner.  Things like eliminating lead from gasoline and cleaner tail pipe emissions because of catalytic converters have been a direct result of these rules and we can't begin to backslide on them now, or health, and the health of future generations depends on them.


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