As always, the devil will be in the final rule details after lobbyists shape the regulations.
“The auto industry must not be allowed to compromise The Obama administration’s fuel economy, and greenhouse gas standards,” says Lena Pons, Policy Analyst of Public Citizen’s Congress Watch Division.
Under the proposal, which was announced with great political fanfare last September, automakers would have to raise the average gas mileage across their fleets to 35.5 miles per gallon and reduce carbon dioxide to 250 grams per mile by 2016.
The exact regulations that would put this in effect are now part of a complex rulemaking process at the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA), which is expected to go on until next spring.
Therein lays the controversy, as lobbyists for the industry seek special exemptions for vehicles that will undermine the intent of the program. Pons says that the proposal must be improved before it is finalized because it offers auto manufacturers too many opportunities to evade proposed fuel economy gains.
In the past, Pons notes, the auto industry has done “everything in its power to weaken critical safety and environmental regulations. The EPA and NHTSA should guard against history repeating itself.”
The criticism comes in several areas, none of them new, as the auto industry has traditionally been deft at evading CAFE regulations.
One potential problem for achieving the program’s goals is a variety of “credits” that manufacturers may earn to reduce the required improvement in a given model year. The proposed rules would allow manufacturers to accrue credits for exceeding the existing fuel economy standards before the first new standards take effect in the 2011 model year.
However, the existing standard has been in effect for passenger cars since 1985, and the light truck standard has been only nominally raised in the past 20 years. “Manufacturers should not be permitted to undermine gains required by this proposal by rewarding them for complying with a woefully out-of-date standard,” according to Pons.
Another concern of Public Citizen is that the public will not know whether manufacturers are actually complying with fuel economy and greenhouse gas emissions standards, even though levels of compliance may be an important factor in setting future standards. Under the proposal, manufacturers can bank credits for five years when they exceed the standards, borrow credits from three years into the future when they fail to meet the standards, and buy and sell banked credits.
“These features of the program will make it extremely difficult for the public to discern year-to-year compliance with the standards. Therefore, NHTSA and the EPA should ensure that information about compliance is publicly available,” says Pons.
Above all, the final rule must contain a “backstop” to ensure that the program’s goals are met even if manufacturers alter their mix of cars and trucks. Under the current proposal, if manufacturers produce a larger percentage of trucks than planned, then overall gains will be undermined because the standard for trucks is much weaker. A backstop, in Pons’ view, would require the industry to make up for these losses and ensure that the program’s goals are met.