One year after the Trump EPA announced that it was reconsidering the Obama EPA’s January 2017 Mid-Term Evaluation (MTE), that found that its final greenhouse gas (GHG) emissions standards for model year (MY) 2022–2025 light-duty vehicles (October 15, 2012, FR) were appropriate, the Agency has issued a notice formally withdrawing that MTE and stating in a new MTE that the MY 2022–2025 GHG standards are not appropriate. Accordingly, the EPA says it intends to conduct a new rulemaking to reset the MY 2022–2025 GHG emissions standards.
Furthermore, the notice states that the EPA will seek to establish a single national program of GHG emissions standards for vehicles. This suggests that the Agency intends to revoke what is known as the California waiver. The Clean Air Act allows the EPA to grant California permission to establish its own vehicle emissions standards. Once California does so, other states may adopt California’s standards in whole or in part. Thirteen states, mainly in the Northeast and comprising about 35 percent of the national auto market, have adopted California’s standards.
Incomplete Evaluation
The EPA issued the 2017 MTE 1 week before the change in administrations—and 15 months before it was required to do so. The MTE stated that the 2022–2025 GHG standards are feasible at reasonable cost, can be met without need for extensive electrification of vehicles, and will provide significant benefits to consumers and the public; the MTE also stated that the “auto industry is thriving and meeting the standards more quickly than required.”
The auto industry protested that the MTE was rushed out the door for political reasons and was based on incomplete or inaccurate data that undermined the Agency’s assertions that the standards were appropriate.
Consumer Preference Has Changed
The MTE was a requirement that the EPA itself inserted into the 2012 final rule. The rule stated that in making the MTE, the Agency needed to determine if the MY 2022–2025 standards were appropriate in light of eight factors. While the 2017 MTE indicated that each factor was satisfied, the new MTE takes the opposite position in each instance. For example, the EPA now indicates that:
- Fuel price estimates used by the EPA in the original rulemaking are very different from recent Energy Information Administration (EIA) forecasts.
- Because of lower fuel prices and the higher price of new low-emitting vehicles, consumers will be slower in buying new cars, and thus, the phasing out of higher-emitting older cars will also progress slower.
- Economic inputs such as the social cost of carbon, the rebound effect, and energy security valuation should also be updated to be consistent with the literature and empirical evidence.
- EPA’s contention in the 2016 MTE that extensive vehicle electrification would not be required to meet the 2022–20215 standards overestimated the role conventional technologies can play in meeting future standards. Industry now contends that more strong hybrids and plug-in electric vehicles will be needed to meet the standards, raising concerns about cost and affordability.
California Waiver
Regarding the California waiver, the Alliance of Automobile Manufacturers states that maintaining a single national program is critical to ensuring that cars remain affordable.
But Mary Nichols, chair of the California Air Resources Board, says the California standards will remain.
“Today’s decision changes nothing in California and the 12 other states with clean car rules that reduce emissions and improve gas mileage—those rules remain in place,” said Nichols. “California will not weaken its nationally accepted clean car standards, and automakers will continue to meet those higher standards, bringing better gas mileage and less pollution for everyone.”
Also, in June 2017, the attorneys general of 14 states wrote to EPA Administrator Scott Pruitt, stating that the standards for MY 2022–2025 vehicles are technologically achievable, cost-effective, and environmentally beneficial, and the 2017 MTE “complied with applicable law and is consistent with the facts” ().
At that time, Attorney General Eric Schneiderman of New York stated that “any effort to roll back these affordable, achievable, and common-sense vehicle emission standards would be both irrational and irresponsible.”
“We stand ready to vigorously and aggressively challenge President Trump’s dangerous anti-environmental agenda in court,” said Schneiderman.
EPA’s latest notice and MTE are here.