The new road to lower emissions may have some potholes

The Center for Auto Safety is the nation’s premier independent, member driven, non-profit consumer advocacy organization dedicated to improving vehicle safety, quality, and fuel economy on behalf of all drivers, passengers, and pedestrians.

AUTOS: The new road to lower emissions may have some potholes (09/16/2009)

Jessica Leber, E&E reporter

While hailed as groundbreaking, the nation’s first mandatory greenhouse gas standards also contain details that have some environmentalists concerned.

Yesterday, the Obama administration unveiled its 684-page proposal to increase the average fuel economy of automakers’ fleets and to set the first greenhouse gas emissions reductions under the Clean Air Act.

The proposal fleshes out a deal struck in May among automakers, union members, environmentalists, and state and federal authorities. It allows California and other states to set their own greenhouse gas standards for vehicles until the standards are supplanted by federal rules for model years 2012 through 2016.

Filed jointly by U.S. EPA and the Department of Transportation, the rules introduce a metric that is new to automakers: grams of carbon per mile. Under the proposal, automakers would have to meet a combined average greenhouse gas emissions level of 250 grams of carbon per mile by the last year of the rule.

By 2030, this standard would cut climate-warming emissions from new cars, light-duty trucks and medium-duty passenger vehicles 21 percent below what would otherwise occur. Today, these vehicles account for nearly a fifth of U.S. greenhouse gas emissions.

If automakers meet the standard solely by improving their fleets’ fuel economy, this translates into an average fuel economy of 35.5 miles per gallon by 2016, a 40 percent improvement over what is required today. Those levels wouldn’t be hit until 2020 under current law.

President Obama, speaking to workers at a General Motors Co. plant in Lordstown, Ohio, said the standards would give auto companies "long-overdue clarity, stability and predictability." For years, automakers had fought legal battles to prevent California from implementing its own rules while federal standards remained in flux.

EPA Administrator Lisa Jackson said the proposal was "pathbreaking." "If you had told me a year ago that we would get to this point, I don’t think anyone would have laid money on it," she said.

Environmentalists and Democratic lawmakers also lauded the largest mandated increase in fuel economy in decades. But several groups had qualms about provisions that give beleaguered manufacturers wiggle room to meet the requirements and might prevent promised emissions reductions.

Concerns about counting hybrid impacts

"Policies that give manufacturers flexibility in meeting the standards are a good thing, so long as those flexibilities are not turned into loopholes," said Jim Kliesch, a senior engineer with the Union of Concerned Scientists’ Clean Vehicles Program.

Some concerns centered on emerging plug-in hybrid and electric vehicle markets. Transportation Secretary Ray LaHood said that the new efficiency standards are likely to be met by improvements to engines, transmission systems, air conditioners, tires and other car parts. But the fuel-economy rules would also accelerate the adoption of advanced "alternatives" to traditional gasoline-powered engines, he said.

Yet the proposed rules allow automakers to count zero-emissions electric vehicles as truly zero-emissions, said Kliesch. That leaves out all of the greenhouse gases emitted from the electricity needed to charge the cars’ batteries.

And Dan Becker, head of the Safe Climate Campaign, said that methods to calculate fuel-economy numbers for plug-in hybrid and electric vehicles are plagued with uncertainties about how people will drive the vehicles.

"You are allowing GM to offset their gas-guzzling vehicles with a few Chevy Volts. That vehicle doesn’t exist yet. We have no idea whether people are going 20 miles, 40 miles … or 120 miles on a charge."

In the past, automakers have exploited loopholes to avoid fuel-efficiency improvements, Kliesch said.

One that is being gradually phased out in the new rules allows automakers to claim improvements from special "flex fuel" vehicles that burn either mostly ethanol or mostly gasoline. But with few gas stations nationwide offering these high-ethanol-blend fuels, consumers who purchase these cars usually fill up with gasoline anyway. Becker said this provision, still present in the early years of the new program, would reduce projected fuel-economy improvements.

Lower standards for smaller automakers

Groups also took issue with provisions that allow foreign manufacturers selling fewer than 400,000 vehicles a year — that is, all but six automakers — to meet weaker standards in the early years of the program.

Administrator Jackson said that’s to give them time to comply. Currently, these smaller manufacturers are allowed to pay a fine instead of actually meeting fuel-economy standards.

Domestic automakers aren’t worried. "We know what we signed up for, and we’re not fixated on what other manufacturers may or may not have to do," said GM spokesman Greg Martin. Becker, for his part, is lobbying for a backstop to ensure President Obama’s promises actually come to pass.

Meanwhile, the Obama administration detailed how the proposal will save consumers money. The rules will cost automakers an average of about $1,050 per vehicle in 2016, lower than the $1,300 projected in May. But consumers will save $3,000 in fuel costs over that vehicle’s lifetime, Jackson said.

The cost isn’t evenly spread, however. The cost of manufacturing a 2016 model year Toyota car would increase by $599, the lowest amount of the 17 manufacturers the agencies modeled. Ford and Chrysler, meanwhile, would need to spend $1,434 and $1,331 more per car, respectively.

In sum, the proposal will cost the auto industry almost $60 billion but will save the country about $158 billion in lower gas bills, according to the proposal.

Meanwhile, EPA estimates that avoiding more than 900 million metric tons of emissions will results in $16.4 billion in savings.

An EPA price tag on a ton of carbon

Tucked into that estimate is a calculation that represents the first time the agency has put a dollar amount on the cost of greenhouse gas emissions, according to New York University’s Institute for Policy Integrity. Edna Ishayik, a spokeswoman for the institute, said EPA chose figures on the lower end of an already "conservative" range of $5 to $55 per ton of carbon.

"These are very conservative estimates, which is problematic because the range will be applied to every significant regulation with a climate impact," she said in an e-mail.

The agencies will accept public comments for 60 days before they finalize the rule by March 2010, which would be the deadline for giving automakers enough time to comply beginning with the 2012 model year.

That is key for automakers, which are busy poring over the new text.

"The proposal provides manufacturers with a roadmap for meeting significant increases for model years 2012-2016. Final rules are essential to providing manufacturers with the certainty and lead time necessary to plan for the future and cost effectively add new technology," said Alliance of Automobile Manufacturers CEO Dave McCurdy in a statement.