Trump Administration Will Review Obama-Era Fuel Efficiency Standards

During a visit to Michigan earlier this week, U.S. President Donald Trump said his administration “will work tirelessly to eliminate the industry-killing regulations, to lower the job crushing taxes and to ensure a level playing field for all American companies and workers.”

And he plans to move closer to fulfilling that promise. While Trump was in Detroit, his administration announced that it will task the Environmental Protection Agency and the National Highway Traffic Safety Administration (NHTSA) with reviewing vehicle fuel-efficiency standards bolstered under former President Barack Obama.

The Corporate Average Fuel Economy (CAFE) standard was first introduced in 1975. In 2010, the Obama administration added fuel-efficiency standards that mandated cars average over 54.5 miles per gallon (mpg) by 2025. The Obama administration also developed a national program for greenhouse gas (GHG) emissions for light-duty vehicles (passenger cars and trucks).

Before Obama left office, then-EPA Administrator Gina McCarthy finalized both the CAFE and GHG vehicle standards. She said she based her decision “on the technical record created by over eight years of research, hundreds of published reports, including an independent review by the National Academy of Sciences, hundreds of stakeholder meetings, and multiple opportunities for the public and the industry to provide input.” She added that the analysis of the standards “has shown that the greenhouse gas emissions standards for cars and light trucks remain affordable and effective through 2025, and will save American drivers billions of dollars at the pump while protecting our health and the environment.”

Speaking about McCarthy’s finalization of both standards, Trump said the Obama administration “broke its promise to automakers and rushed the midterm evaluation to a premature conclusion earlier this year.” He claimed that reinstating the midterm evaluation -- which, among other things, analyzes automakers' ability to comply with the standard -- “ensures that regulators will rely on the best available data and information, which the previous administration ignored.”

By reviewing the standards, Trump says his administration “will examine, and if necessary, revise, the regulations on auto manufacturers and the attendant costs passed on to consumers."

The standards are expected to bring great benefits to both the environment and the economy, the EPA reports on its website. The agency projects the two standards will cut 6 billion metric tons of GHG emissions over the lifetimes of vehicles sold in model years 2012 to 2025. They will also save Americans more than $1.7 trillion in fuel costs and reduce the nation’s dependence on oil by over 2 million barrels per day in 2025, according to the EPA. 

The World Resources Institute quickly came out in support of the vehicle standards, saying they actually allow U.S. automakers to stay competitive.

When Obama took office, the American automobile industry was in dire straits, and two of the Big Three automakers took government bailouts to stay solvent. For seven years, the industry experienced “sales gains, growing jobs, and increased innovation, while also meeting more stringent standards,” Kristin Igusky of the WRI wrote in a blog post on Tuesday. If the current vehicle standards are weakened, she argued, it “could put our competitive advantage in the global economy at risk.” 

Other countries, including Japan and nations in the European Union, have either existing or proposed fuel-efficiency standards that compare to the 2025 U.S. rule.

Efficiency rules have been relaxed before, as Fortune's Margo Oge points out. When efficiency rules were relaxed in the mid-1980s, foreign automakers only had about 25 percent of the market, but now they have 55 percent.

“Repealing existing standards once again will not only set back efforts to mitigate climate change, undermine the consumers pocketbook, and cost jobs, but it will again set America’s auto companies on a collision course,” Oge reported.

Other environmental groups also defended the standards. “Mileage standards save consumers money at the gas pump, make Americans less dependent on oil, reduce carbon pollution and advance innovation,” Rhea Suh, president of the Natural Resources Defense Council (NRDC), said in a statement. 

She argued that the current standards “helped the auto companies move from bankruptcy to profitability, and there is no reason they cannot be met.”

“Our cars and trucks are not nearly as clean as they should be, but they're a lot cleaner than they used to be -- more than 40 percent less polluting than they were 20 years ago,” added Michelle Kinman, clean energy advocate for Environment California.

“America should be putting cars that burn too much gasoline in the rear-view mirror. Unfortunately, EPA’s order today is a green light to keep making cars that dirty our air, endanger our health and threaten our children's future.”

The vehicle standards put into place under the Obama administration benefit both the American people and the environment. If the Trump administration decides to weaken them, both will suffer.

Image credit: Flickr/Gage Skidmore