Briefing Book

Explaining Trump’s Michigan Announcement

By Shoshana Lew

Tagged CarsDeregulationenvironmental protection agency

Today, in Michigan, the Trump Administration is expected to announce that the Environmental Protection Agency (EPA) will be retracting its “Final Determination” regarding greenhouse gas emissions reduction standards for cars and light trucks in model years 2022-25, which, recent agency analysis indicates, would drive average fleetwide performance from the equivalent of roughly 43.1 miles per gallon (mpg-e) in 2021 to 50.8 mpg-e in 2025. Today’s announcement will likely pique concern for the environmental community and be welcome by vehicle producers who, as described in a post to the Briefing Book on March 3, had requested such a measure. As previously discussed, it is critical for the benefit of industry, consumers, and the environment that debate stay measured and continue on a trajectory toward ongoing, improved vehicle performance and streamlined, nationwide, regulation of vehicle fuel economy and emissions reduction. In that vein, it’s important to understand the facts: what today’s announcement does; what it doesn’t do; and what the next steps in the process are likely to be.

What today’s action does:

All things considered, today’s action, retracting a “final determination” that EPA issued in January 2017, is fairly confined. The January action had stated the appropriateness of greenhouse gas standards for cars and light trucks (e.g. smaller pickup trucks) in model years 2022-25—the last years of the existing “One National Program,” which streamlines implementation of Corporate Average Fuel Economy (CAFE) standards, regulation of air pollutants from light-duty motor vehicles under the Clean Air Act, and California state law. Through two regulations, the Obama Administration established this joint program for model years 2012-25. However, statutory differences between agency authorities meant that EPA regulations are final through 2025 (barring a justification, followed by subsequent rulemaking, to increase or decrease the standard), whereas the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) established CAFE standards only through 2021, with later years subject to a new rulemaking that has yet to commence. Agencies agreed to a “midterm review” that included a commitment by the EPA to determine, by 2018, whether the existing emissions standards for 2022-25 would remain unchanged, or whether the agency would conduct new rulemaking, concurrent with NHTSA. The EPA’s January action established the former; today’s action reopens the question but does not itself change existing regulations. 

What today’s action doesn’t do: 

As noted above, today’s action does not change existing regulation, though it sets in motion a longer-term process that, at least on the EPA side, could. EPA regulation, at present, remains final through model year 2025, and to set new standards for any intervening years requires new rulemaking, with a full, public process of notice-and-comment. NHTSA rulemaking for model years 2022 and beyond will also proceed through full rulemaking. Today’s announcement indicates that, as with previous rules, the agencies will likely conduct joint rulemaking. 

Importantly, today’s action does not alter California’s existing waiver of Clean Air Act preemption, which allows them to set and enforce their own emissions standards for motor vehicles through 2025, given California’s severe pollution challenges; as part of the One National Program, California agreed not to enforce that waiver so long as the 2022-25 standards are substantially similar to what was proposed. Consequently, if the standards are weakened, California could decide to enforce its own standards.

What’s next? 

This action sets in motion a timeline to watch carefully, with multiple opportunities for public comment. On the NHTSA side, regulatory agencies are required to conduct an accompanying environmental review, so watch out for steps initiating that process, typically termed a “scoping notice” or “notice of intent” (a past example can be found here). This will likely describe further steps and provide one opportunity for comment. If past precedent holds, NHTSA would then issue a draft environmental review, concurrent with a joint Notice of Proposed Rulemaking by NHTSA and the EPA. This too would be open for notice and comment. The Administration has reportedly indicated that the proposed rulemaking would take place by April 2018.  

So whatever rhetoric accompanies today’s announcement, it is worth staying focused on the long-game: Keeping this program on strong, analytically rigorous footing is better for everyone. Over the course of the ensuing process, reasonable people may disagree over the specifics of exactly how aggressive out-year standards should be. But, fundamentally, even the companies want to keep this program going—and that means engaging constructively with California to protect the consistency that a single, national standard provides for producers and consumers alike. So, to quote a recent editorial in Automotive News, “Don’t give the industry what it isn’t asking for…They didn’t dismiss climate change as a hoax or call for dismantling the EPA. They didn’t renounce their role in combating climate change or highway fatalities. They didn’t ask for a return to the great old days of sooty skies and suicide doors.”

Read more about CarsDeregulationenvironmental protection agency

Shoshana Lew previously served as the Chief Financial Officer and Assistant Secretary for Budget and Programs at the U.S. Department of Transportation (USDOT). During her time at USDOT, Lew's responsibilities included overseeing the Corporate Average Fuel Economy (CAFE) program.

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