The U.S. Environmental Protection Agency’s administrator, Scott Pruitt, declared on Monday that Obama-era MPG rules were “wrong” and ordered them to be revised. Helpfully, Pruitt—who has repeatedly questioned the overwhelming scientific consensus on human-driven climate change—offered no specific guidance on how to reshape those targets, nor what he thinks would be a palatable target.
President Donald Trump signaled during the 2016 campaign he’d reconsider the fuel economy standards, and with the announcement Monday Pruitt made good on that promise. In a press release, the EPA said it was starting a joint process with the National Highway Traffic Safety Administration to develop a notice and comment rule-making session to set “more more appropriate GHG emissions standards and Corporate Average Fuel Economy (CAFE) standards.” (Both agencies set standards.)
The Obama administration locked in carmakers to a standard of 54 mpg for light-duty vehicles by 2025, a move that happened far earlier than expected but was grounded by, the agency said at the time, sound data. On Monday, following months of hemming and hawing by automakers upset by the change, Pruitt slammed the effort as a politically-charged charade.
“The Obama Administration’s determination was wrong,” Pruitt said. “Obama’s EPA cut the Midterm Evaluation process short with politically charged expediency, made assumptions about the standards that didn’t comport with reality, and set the standards too high.”
Pruitt also signaled he’s going to revoke a waiver under the Clean Air Act for California, which allows it to set its own, more aggressive standards that other states have since adopted. Revoking the Obama-era rules while leaving the California wavier in place could put the auto industry in a position where it has to adhere to a plethora of varying standards. That, carmakers argue, would be just too difficult to follow.
“Cooperative federalism doesn’t mean that one state can dictate standards for the rest of the country,” Pruitt said. EPA will set a national standard for greenhouse gas emissions that allows auto manufacturers to make cars that people both want and can afford—while still expanding environmental and safety benefits of newer cars.”
California officials have vowed to fight back if the EPA revokes its waiver.
Higher Costs Likely
The decision from Pruitt, an ethically-compromised appointee of Trump who lives part of the time in a house paid for by an oil lobbyist, was widely expected. A smattering of environmental groups immediately pushed back and called the decision a huge setback for the industry and consumers.
“EPA’s decision defies the robust record and years of review that show these targets are reasonable and appropriate,” said David Friedman, director of cars and products policy and analysis for advocacy group Consumers Union, in a statement. “Undermining these consumer protections will cost consumers more at the pump while fulfilling the wishes of the auto industry.”
As we reported last year, the concern from automakers—which have vast cash reservers and are currently banking on an insatiable appetite for larger SUVs an crossovers—is likely to backfire for consumers, according to studies on the proposed measure. One by the advocacy group Ceres found that even if gas prices fell to $1.80 per gallon, costs to comply with the fuel standards would be offset by the shift to large trucks and SUVs and away from small cars.
The Obama EPA’s determination also found that consumers would save $100 billion in net benefits from implementing the new standards.