Trump administration rolls back Obama-era fuel efficiency standards

The Trump administration on Tuesday rolled back an Obama-era law that pushes automakers to produce more fuel efficient vehicles, severely limiting a rule designed to decrease pollution from transportation in the face of climate change.

The new rule cuts the year-over-year improvements expected from the auto industry, slashing standards that require automakers to produce fleets that average nearly 55 mpg by 2025. Instead, the Trump rule would bring that number down to about 40 mpg by 2026, bringing mileage below what automakers have said is possible for them to achieve.

The Trump administration has argued that cutting Corporate Average Fuel Economy (CAFE) standards will allow automakers to produce cheaper cars, something they say will save 3,300 lives as lower prices spur consumers to upgrade to new vehicles with better safety features that guzzle less gas than older models.

“This rule reflects the Department’s No. 1 priority — safety — by making newer, safer, cleaner vehicles more accessible for Americans who are, on average, driving 12-year-old cars. By making newer, safer, and cleaner vehicles more accessible for American families, more lives will be saved and more jobs will be created,” Secretary of Transportation Elaine Chao said in a statement announcing the rule.

But the rule has been mired by doubts that it will actually save lives.

Earlier government analysis found that while 600 to 700 Americans might be saved by better safety features, nearly 1,000 might die prematurely given the increase in smog and air pollution from vehicle emissions, according to documents obtained by Sen. Tom Carper (D-Del.).

And even with historically low gas prices, consumers are expected to pay more at the pump. An analysis from Consumer Reports found U.S. drivers would spend $300 billion more on gas over the lifetime of the vehicles because of the decrease in fuel efficiency. 

The increased cost to consumers holds true even if gas falls to $1.50 per gallon, as prices are expected to rebound by the time frame most of the new vehicles would be produced.

“Unemployment claims skyrocketed to more than 3 million last week, so millions of Americans are now going without a paycheck, and our nation is at risk of a recession because of the COVID crisis,” David Friedman, vice president for advocacy with Consumer Reports said on a call with reporters, referring to the disease caused by the novel coronavirus.

“So it’s absolutely stunning the administration would finalize a plan that will cost drivers more money at the pump for years to come. Consumers, workers, small business owners are the engine of America’s economy. And the last thing they need is to get stuck spending more on gas,” he said.

Experts say the economic blow could also hit manufacturers themselves, with global buyers steering clear of American-made vehicles that lag behind their competitors. 

That contrasts with the brighter picture from the Trump administration, which believe 2.7 million more Americans will buy vehicles because of an estimated $1,400 average reduction in vehicle prices.

The Trump rule requires 1.5 percent year over year improvements in mileage, compared to 5 percent under Obama. The auto industry, however, has said it could improve fuel efficiency by 2.4 percent each year even without regulation.

But the issue is hardly just a financial one. Transportation is now the largest source of greenhouse gas emissions in the nation, according to research by the Environmental Protection Agency (EPA), with pollution from cars and trucks outpacing that of electricity production as utilities move away from coal. 

The earlier standards from Obama were considered one of his greatest climate achievements.

“We’ve seen all too terribly the consequences of those who denied warnings of a pandemic. We can’t afford any more consequences of climate denial. All of us, especially young people, have to demand better of our government at every level and vote this fall,” the former president tweeted Tuesday in rare public remarks condemning actions from the current administration.

We’ve seen all too terribly the consequences of those who denied warnings of a pandemic. We can’t afford any more consequences of climate denial. All of us, especially young people, have to demand better of our government at every level and vote this fall. https://t.co/K8Ucu7iVDK

— Barack Obama (@BarackObama) March 31, 2020

The Trump administration argues it is balancing the technical capabilities of the auto industry with goals that will reduce pollution, even if at lower rates than the Obama rule.

“We believe on balance this is the right compromise, the right balance to strike for the country,” said James Owens, acting administrator for the National Highway Traffic Safety Administration (NHTSA), which helped write the rule.

It’s a view not shared by environmentalists.

“The administration is unraveling the biggest and most successful climate policy on the books, one that has also saved consumers millions of dollars in gasoline costs, cut air pollution, and helped grow the auto industry,” Ken Kimmell, president of the Union of Concerned Scientists, said in a statement.

States like California — which has engaged in a long battle with the Trump administration to block the rule — have long argued the tougher measures are needed to reduce air pollution that is dangerous both for health and the environment. 

When the CAFE standards were first proposed in 2018, it was rolled out alongside another measure that would have created one national standard for vehicle emissions — undercutting tougher standards drafted by California and adopted by more than a dozen other states.

The Trump administration is already facing suits over its decision to revoke that power from California, but a subsequent deal between the state and automakers showed there is an appetite to meet fuel economy standards similar to what Obama promised.

In July, four automakers agreed to produce vehicles that could average 50 mpg by 2026. 

Experts say this Trump administration rule is particularly vulnerable to legal challenges given the numerous efforts to tweak the cost-benefit analysis underlying the rule, something critics called an attempt to make the overall rule appear more favorable. 

But another central issue is that the law requires pushing automakers to innovate.

“Based on NHTSA statute they must set the standard at the maximum feasible level,” Consumer Reports’ Friedman said.

“And if you’ve got several automakers who are already saying they can do a lot more, that pretty much tosses out the window any claim that the administration rolled out the maximum feasible standard. That’s going to prove a serious challenge in the courts,” he added.

—Updated at 12:17 p.m.