Energy & Environment

Trump rollback of Obama-era mileage standards faces challenges in courts

President Trump's rollback of Obama-era mileage standards last week may prove to be one of the administration's most vulnerable environmental overhauls as opponents prepare to challenge it in court.

The Trump rule dramatically scales back the year-over-year improvements automakers must make in fuel economy, leaving consumers spending more on cars and gas while spewing more pollution into the air.

Environmental and watchdog groups say the rule falls short of laws requiring the government to set ambitious fuel efficiency standards.

They acknowledge the new rules will reduce the price of a new car for consumers and reduce costs for automakers. But they've also argued in their analysis that consumers would take a $13 billion hit in the next decade, in part due to spending more on gas because of lower fuel economy standards. They also estimate that increased pollution under the accompanying emissions regulations would cost taxpayers $22 billion over the next decade. 

"The [Obama-era] rule showed you can cut pollution significantly and save drivers billions of dollars, and in order to justify this rollback they've had to cut a lot of corners and skew their analysis," said Ben Longstreth, an attorney with the Natural Resources Defense Council, arguing the rule violates the mandate of the Clean Air Act.  

"The result is a sloppy and extremely vulnerable rule." 

Under the Obama rule, automakers would have had to produce fleets averaging nearly 55 mpg by 2025. The Trump rule gives them an extra year to produce a fleet that averages 40 mpg.

This is less ambitious than what the auto sector says it can deliver. 

While the Trump rule requires 1.5 percent year-over-year improvements in mileage - a figure they say is more attainable than the 5 percent required under the Obama rule - automakers said they could hit 2.4 percent without regulation. 

Several automakers have also signed a deal with California to produce fleets that average 50 mpg by 2026.

Environmental groups have already pledged to sue over the rule, and automakers' ability to meet more aggressive standards will likely be central to the case.

The Energy Policy and Conservation Act requires the National Highway Traffic Safety Administration (NHTSA), which writes the rule alongside the Environmental Protection Agency (EPA), to set the maximum standard that's feasible for automakers while being economically practicable to consumers.

"You've got four automakers who have already publicly stated they can do significantly more and data shows industry can improve the efficiency of vehicles at 2 percent per year, so the reality of the marketplace and what automakers have already said show this isn't the maximum feasible," said David Friedman with Consumer Reports, which has opposed the rule due to the costs for drivers.  

The NHTSA told The Hill the administration considered economic practicability, technological feasibility, the need for the nation to conserve energy as well as environmental laws before concluding its new policy "represented the best balance of the factors and therefore was [the] maximum feasible." 

The Trump administration argues their weaker regulations will be better for consumers. Cheaper vehicles will prompt them to upgrade to newer cars that guzzle less gas than their current ride and come with better safety features. 

"The administration is making good on a promise three years ago to revisit the 2012 fuel economy standards that made erroneous assumptions and led to an unattainable set of rules that would have made new vehicles unaffordable and sharply reduce the ability for Americans to choose vehicles that best suit their families' needs," the NHTSA said in a statement.

Even when relying on the government's own analysis, however, it may be difficult to make a case for the rule.

The Administrative Procedure Act requires sound reasoning to show that regulations have logical rather than just political backing - otherwise they risk being thrown out as arbitrary and capricious. 

"If they failed to do the math right, if they failed to do their analysis right, if they failed to produce a rule based on the literature and good sourcing, it's likely to get thrown out in court, and what we certainly saw in the proposal is bad math, bad science, and bad economics," Friedman said. 

"And as we dig into the rule itself, we're seeing much of the same." 

The government's own analysis backing the rule shows it will cost consumers more than they will save. The regulations reduce the average price of a vehicle by $1,000 while raising the amount spent on gas by $1,400 - leaving consumers $400 worse off by model year 2030.

Averaged out across the more than 272 million cars in America, that becomes an extra $175 billion spent on gas and another 867 million metric tons of carbon emitted into the atmosphere through 2029.

That's a sharp turnaround from the Obama-era standards, which have saved consumers $88 billion and avoided 459 million metric tons of greenhouse gas emissions, according to the EPA.

The administration also believes the rule will save lives, a feature due not only to the new cars they'll be driving but also because they will be driving them less often given the expense.

The analysis accompanying the rule predicts it will save about 700 lives, but elsewhere the rule shows anywhere from 440 to 1,000 premature deaths resulting from air pollution caused by the increase in smog and other pollution.

"They published 2,000 pages that actually don't justify the rollback, it just says society will be worse off by $22 billion," said Jeff Alson, who retired in 2018 from the EPA's Office of Transportation and Air Quality, which helps craft the standards. 

"People like me were just stunned."

Think tanks say the impact will be even greater than the Trump administration has predicted. An analysis by the Environmental Defense Fund found there could be as many as 18,500 premature deaths from air pollution while costing Americans $244 billion more at the gas pump. Consumer Reports thinks the rule could cost consumers as much as $300 billion, an analysis that looks as far as 2035, rather than to 2029 like the Trump administration.

The administration's cost-benefit analysis fails to show an overall benefit when using the standard 3 percent discount rate that accounts for economic growth and other factors. 

The NHTSA stressed the rule saves consumers money when using a 7 percent rate, but many economists advise against using the more favorable rate.

"Using a 7 percent discount rate is just a way to make things that will be really bad in the future look not as bad today," said Chris Harto with Consumer Reports, who evaluated the rule.

Experts say they have doubts about the ways the Trump administration calculated some of their costs and benefits, arguing the administration made a number of tweaks to make its policy appear more favorable. 

For instance, a $32 billion increase consumers will pay in gas taxes as they buy more gas to fill their tanks is counted as a benefit under the rule, rather than a cost. If shifted, that would bring the cost of the regulation to $45 billion.

"When you're cooking your own book and still can't make it look like a good idea, that's a tough position to be in," Harto said.

The administration paints a rosier picture of the effects, with a release boasting of how the rule will reduce emissions.

But that statement holds true only if the government took no action to improve vehicle emissions. 

"What allows them to sleep at night is if there were no standards, they're doing a 1.5 percent increase, so that's improvement," said Chet France, who like Alson worked at the EPA's Office of Transportation and Air Quality, last working on the Obama-era standards.

"But that's not the baseline. The baseline is the current standards, which they're relaxing. Otherwise it's a lie."

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