Newly proposed auto standards hold promise

The Biden Administration is clearly making good on its pledge to revisit the automobile GHG emission standards weakened by the previous administration. The notice of proposed rulemaking issued by EPA on August 5, 2021 aims to cut model year 2026 car and light truck GHG emission rates 17% compared to the recent level, from 205 grams/mile (g/mi) in 2020 to a nominal target of 171 g/mi in 2026. 

The White House announcement just prior to the EPA proposal also states an ambitious goal for EVs to comprise half of U.S. vehicle sales in 2030. This non-binding target would include plug-in hybrid electric vehicles (PHEVs) as well as pure zero-emission vehicles such as battery electric and fuel cell cars. 

Fleetwide efficiency gains more important than electric cars over the next decade

For at least the next decade, the overall fuel economy of the entire car and light truck fleet will be more crucial for climate protection than the number of electric vehicles sold. That's the message of my recent online article in Scientific American: "Want Greener Cars? Focus on Fuel Efficiency." Read the discussion there (the article was first published in The Conversation under the title "To make the US auto fleet greener, increasing fuel efficiency matters more than selling electric vehicles").   

Personal trucks widen emissions gap over EVs

Excess carbon dioxide emissions from the rising popularity of light trucks, such as the Ram pickup, swamp many times over the potential carbon savings from increased sales of EVs, such as the Tesla Model 3, to date.  

Last fall, I posted an analysis showing that, even as electric vehicle sales had grown significantly over the past several years, the broader market shift to personal trucks (mainly SUVs and pickups) has overwhelmed the potential CO2 reductions from EV use by more than a factor of four. With the new EPA data now released, this ratio has increased to a factor of 5.6, as shown in the chart below. 

Light trucks overwhelm EVs' carbon-cutting benefits to date

Electric vehicle sales have grown rapidly over the past several years. In 2012, only about 53,000 EVs were sold in the United States, counting both battery electric and plug-in hybrid models. By 2018, the annual tally of new EVs sold in the United States reached 361,000. It then tapered to 327,000 in 2019, the last full year of data before the 2020 pandemic. The vast majority of EVs are Teslas, with the big jump in 2018 due to the introduction of the Tesla Model 3. With overall light vehicle sales on the order of 17 million per year (pre-pandemic), EVs comprised about 2% of the U.S. market as of 2019.

A missing link in green car marketing

One of the reasons why automakers have advocated weaker fuel economy and greenhouse gas (GHG) emission standards is that lower-than-expected fuel prices have lessened consumer interest in higher fuel economy. Although insufficient consumer interest relative to environmental need is the main reason why regulations are needed, lack of consumer interest is a legitimate concern. The challenge is quite real when the market is pulling one way while regulations are pulling another.

Nevertheless, environmental need -- and indeed policy-fostering public sentiment to address global warming -- does not go down when pump prices fall.

Earth Day and auto efficiency

On Monday March 9, 2020, just before the coronavirus lockdown, I hosted a pre-Earth-Day teach-in on auto efficiency. It was part of the commererative week of action that the University of Michigan had planned to celebrate the 50th anniversary of the first Earth Day, April 22, 1970. 

Can the Trump administration pull off a clean car deal after all?

Regulations have long been a bone of contention between automakers and green groups, with policymakers caught in the middle. The disagreements have grown sharper than ever over the past two years, culminating in an August proposal from the Trump administration. That plan detailed a preferred option of freezing car and light truck Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) emission standards after 2020.

In response -- and they were indeed prepared for this worst-case scenario -- the State of California and its allies have girded for legal battle. They filled the docket with comments and extensive supporting analysis designed to fight the administration's crippled standards in court. On the other side, automakers -- who had prompted the administration to revise the regulations -- hailed the Trump agencies regulatory reform process even though they said it weakened the rules even more than they wanted. At that juncture, it seemed like years of litigation might be inevitable.

Nevertheless, a look at the formal comments filed reveals the makings of a compromise peeking through the otherwise disparate views. Recent news stories report that serious negotiations between California and the Trump administration seem to be underway. My recent Axios piece muses about how a compromise on car standards could be in sight.

No justification for weaker CAFE standards

Interior view of the 2019 Ford F-150 Limited edition pickup truck. Such luxurious features in what were once utilitarian vehicles showcase automakers' impressive design and technology capabilities. The key policy question is how well these capabilities can be harnessed to improve fuel economy rather than offering ever more niceties at the expense of better protecting the environment. [photo: Ford Motor Company media] 

This week the administration is holding public hearings on their proposal to weaken Corporate Average Fuel Economy (CAFE) standards after 2020. What follows is the comment I prepared for the hearing being held today in Dearborn, Michigan. 

Comment on CAFE and GHG Standards Proposed Rule
for MY 2021-2026

John M. DeCicco, Ph.D.
University of Michigan Energy Institute*

Thank you for the opportunity to present this comment today.

Having reviewed the proposed rule, I find that it fails to scientifically or economically justify freezing the standards for model years 2021 through 2026. My assessments show that the greenhouse gas emissions and fuel economy standards for those years remain sound.

My overarching conclusion is that there is no justification for changing the standards.

The one new development with any significance is that fuel prices are lower now than projected. However, this does not justify weakening the standards. Lower prices are all the more reason why fuel economy and emission standards should remain untouched.

The precarious state of fuel economy policy

Rated at 25 mpg, the Toyota RAV4 is a good example of the average new personal vehicle now being
sold in the United States, emitting 5.2 metric tons of CO2 per year over 15,000 miles of driving. 

Any day now, the Trump Administration will formally propose its revisions to the coordinated program of Corporate Average Fuel Economy (CAFE) and greenhouse gas (GHG) emission standards for cars and light trucks. EPA Administrator Scott Pruitt has determined that the existing standards, set in GHG terms by the previous administration for model years 2021-25, are too tough. Everyone expects that the proposal will weaken the regulations; the question is by how much.

As a long-time analyst of automotive fuel economy policy, over the past few weeks I've written several pieces providing perspectives on the issue as linked here.

Even though it's not a good reason to weaken the standards, automakers do have a valid concern about low consumer interest in ever-higher fuel economy. The tension between what consumers desire and the need to cut GHG emissions is a problem to take seriously and address creatively. This challenge is discussed in my recent piece "Why aren't automakers connecting better with green-minded consumers?" in Automotive News.

A broader look at the regulatory dispute is given the piece, "After Years of Green Promises, Automakers Renege on Emissions Standards," published last week by Yale Environment 360. Hooking to visionary-sounding statements by GM's chief executive, it highlights the contrast between the automaker's promise of technological solutions and the efforts to fight the policies needed to bring such solutions to fruition. That's an old story in the long-running debates about clean cars. However, with automakers now able to exploit the empowered political hostility to the environment that they (and some other industries) cultivated over the years, progress may soon grind to a halt. My comments echo those of others who point out California's crucial leverage on the issue.

A concise take on this very point is given by my Axios Expert Voices piece, "Automakers struggle to head off the California–EPA legal battle," published earlier last week.

A couple of months back, shortly after Administrator Pruitt issued his notice about the process to revisit the CAFE and GHG emissions standards, I argued that "Stronger fuel standards make sense, even when gas prices are low" in The Conversation (and also republished by Salon and other outlets).

Stronger fuel standards make sense, even when gas prices are low

The current Republican administration is taking steps to weaken EPA's greenhouse gas (GHG) emission standards for cars and light trucks. One of the stated reasons is that lower fuel prices make it more difficult for automakers to comply with the regulations. However, car companies are already well on the way to re-engineering their vehicles to cut emissions through higher fuel economy. Fuel prices are a fickle friend when it comes to the crucial long-term quest to cut climate-disrupting GHG emissions. So that's all the more reason to keep strong standards in place, as explained in this recent piece published on The Conversation. 

Deceptive jobs rhetoric and auto regulation

Last week, President Trump worked long-time big-business lobbying scripts about "job-killing regulations" into his populist speech here in Michigan. The setting was the Willow Run facility in Ypsilanti and the props included a crowd of Chrysler, Ford and General Motors auto workers bussed in by the former Big Three to cheer for the Donald.

In reality, environmental regulations do not kill jobs. Read a rebuttal to the speech in my article on the "The ‘Job-Killing’ Fiction Behind Trump’s Retreat on Fuel Economy Standards" at Yale's e360 online magazine.

Fuel Economy Matters

Pump prices are down and given the outlook of a weak global economy, a strong dollar and a lingering oil glut, they could drop even more as the year goes on. The U.S. average retail gasoline price fell below $2.00 per gallon in January and as of last week it averaged $1.93 per gallon. For over a year now, it's been significantly lower than the roughly $3.50 per gallon average of the previous few years, let alone the brief spike to over $4.00 per gallon in summer 2008. 

Consumers respond to gasoline prices and so it's no surprise that new vehicle sales are at a record high while the vehicle mix has shifted away from compact segments and back to trucks, larger SUVs and more luxurious cars. The amount of driving is back up as well. 

The fuel economy of the vehicle fleet doesn't totally backslide even when the price of fuel does. Most efficiency gains are due to improved technology; once such engineering refinements are made they don't get undone. Corporate Average Fuel Economy (CAFE) standards prop fuel economy up even when consumer interest fades, and that policy is now reinforced with greenhouse gas (GHG) emissions standards that limit the amount of carbon dioxide (CO₂) and other GHGs exhausted from tailpipes. 

Average new car and light truck fuel economy (right-hand axis) 

compared to nominal and inflation-adjusted gasoline prices. 

The adjoining graph compares the average fuel economy of new cars and light trucks to the price of gasoline since 1970, shown as both nominal "dollars of the day" and inflated to 2015 ("real") dollars. It's clear how fuel economy ratchets up as fuel prices rise. We can also see the slow backsliding that happened from the late 1980s until a decade ago. Although fuel economy has been climbing since 2005, we may be in for a serious tug-of-war between the need to keep fuel economy heading up and weakened consumer interest due to lower gasoline prices.