California along with 16 other states and the District of Columbia have filed suit in federal court accusing the U.S. Environmental Protection Agency (EPA) of failing to follow its own regulations and violating the Clean Air Act.
There are two central issues. First, under the 2012 deal agreed to by the Obama administration and automakers who sell vehicles in the United States, the fleet average fuel efficiency rating will increase to a range of 40.3 to 41.0 mpg by model year 2021, on its way to 54.5 mpg by 2025. The Obama EPA issued a final determination upholding the standard just days before leaving office in 2017. The Trump EPA wants to freeze fuel-economy and emissions standards at levels already agreed to for 2020.
The second issue is California’s waiver allowing the state to set stricter standards for emissions than those set by the federal government. The EPA is threatening to revoke that waiver and the state of California has vowed to fight that revocation.
[nativounit]
California Air Resources Board Chair Mary Nichols said:
The standards we are fighting to protect were adopted in 2012 and don’t take effect until 2022. They were a lifeline thrown to an industry that was in trouble and desperate for stability. They were based on the best judgment of engineers about what technology could achieve. And in fact they are being achieved today, years ahead of the deadlines, because of the good work of the auto industry. But now Administrator Pruitt, based on no new information or facts, wants to roll back all that progress in the name of deregulation. The Final Determination is just the first step but it is intended to provide the legal basis for a decision that has already been made: to halt the progress that regulators and industry have made toward a new generation of vehicles. It does not withstand scrutiny and it will not stand.
The Alliance of Automobile Manufacturers, an auto industry trade group, has long argued that the industry builds cars that consumers want to buy. From the alliance’s website:
Once the government set targets, automakers are not evaluated based on whether the products they offer consumers meet the government targets; rather, automakers are evaluated based on the products consumers choose to buy. So, low consumer interest in high-mileage vehicles presents a serious challenge to the government’s ambitious fuel economy and greenhouse gas targets.
According to a press release from California Attorney General Xavier Becerra, the current federal standard is estimated to reduce carbon pollution equivalent to 134 coal-fired power plants burning for a year and to save drivers $1,650 per vehicle. The auto industry is on a path to meet or exceed those standards.
The states that have joined in the lawsuit represent about 43% of all U.S. new car sales and 44% of the U.S. population. Perhaps even more than wanting lower emissions and fuel-economy standards, automakers want uniformity. If they have to build half their cars to one standard and half to another, the result is complexity, confusion and lower profits. By signaling an intention to fight the EPA proposal, California and the other states that have filed suit are raising the stakes.
In addition to California and the District of Columbia, other states joining in the suit are Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota (filed by and through its Pollution Control Agency and Department of Transportation), New Jersey, New York, Oregon, Pennsylvania (also filed by and through its Department of Environmental Protection), Rhode Island, Vermont, Virginia and Washington.
[recirclink id=458200]
[wallst_email_signup]
Top Gaining Stocks
Top Losing Stocks