TRUMP MAY KILL THE CALIFORNIA WAIVER
Domestic automakers would likely fall behind world rivals in emission-reduction technology research,
Anyone who thought the increasingly bitter inter-jurisdictional battle over automotive tailpipe emissions was over when Scott Pruitt was ousted from his position as director of the U.S. Environmental Protection Agency is in for a shock.
According to a recent Bloomberg report, the Trump administration will try to revoke California’s authority to regulate automobile greenhouse gas emissions. More troubling, the terms the Trump administration is seeking would appear to be even more onerous than even your pessimistic Motor Mouth first posited in December and May.
Indeed, if Bloomberg ’s report is accurate, it would appear this will be a co-ordinated twopronged attack. First, the federal government will seek to revoke the waiver California enjoys under the Clean Air Act. (Thanks to the most famous waiver in North American politics, California is allowed to set its own, more stringent emissions standards, superseding even the Environmental Protection Agency’s regulations).
Furthermore, the Trump administration will also put a halt to the Obama-era Corporate Average Fuel Economy regulations that called for an improvement to 54.5 miles per U.S. gallon by 2025 (the speculation is that the standards will be capped at 2020 levels, or about 35 mpg).
Since automobile fuel consumption is commensurate with carbon dioxide production, any future emissions reductions on the part of domestic automakers will be, ahem, voluntary.
Why is this important to anyone other than Californians, you might be asking.
Well, besides the fact California is the largest single auto market in North America — the two million cars sold there each year are about equal to what all of Canada buys — the Clean Air Act granting California that waiver to set its own emissions standards also has a provision (section 177) that allows any state to choose California’s regulation over the EPA’s.
It’s an either or situation: They can’t set their own standards but they can choose between the California Air Resources Board formula or the Environmental Protection Agency’s. So far, more than a dozen states and territories have emulated California’s standards rather than adhering to federal law. By most estimates, somewhere between 35 and 40 per cent of all vehicles sold in the U.S. are in states that adhere to California’s regulations rather than the federal standards.
Then there’s the question of who will benefit from such a rollback in emissions. A year ago, when such discussions started, automakers seemed to be largely in favour of weakening emissions standards, many having attacked the Obama plan as both too ambitious and too costly. In recent months, however, they’ve moderated their quest for rollbacks. The problem is two-fold.
For one thing, there is an argument the Trump administration won’t be able to eliminate California’s waiver. Oh, it could refuse any one specific waiver — the Bush administration, in fact, did so in 2007 — but eliminating California’s right to apply for the waiver would require changing the Clean Air Act, and even those who try to ignore American politics know that getting any legislation through both houses of the American government requires nothing short of divine intervention.
Even if, by some miracle, such a revision was possible, California — and numerous other states — are promising to challenge the changes in court.
The expected protracted legal battle would be a disaster for automakers’ product planning, causing years of uncertainty over exactly what regulations automakers should adhere to.
That, in turn, would produce uncertainty in how automakers should spend the billions of dollars they devote to powertrain development and other advances.
Would Ford, for instance, continue to spend money on developing a hybridized truck if electrification is not needed to pass the newer, more lax standards? Any plans GM has of developing lighter, carbon fibre-bodied trucks would probably be shelved if it was sure its Sierras and Silverados would not have to meet Obama’s tough 2025 standards.
The changes might also prove the end of electrified vehicle development in — and for
— the United States, Bloomberg positing that the changes would prevent states from forcing automakers to sell electric vehicles.
EVs are barely making headway with the favourable incentives they now enjoy. If the administration was able to remove all regulatory incentives from the books, it’s tough to see how battery-powered vehicles would proliferate. Ironically, that would leave Quebec — which basically adopted California’s rules — as the only jurisdiction left in North America forcing automakers to produce more electrified vehicles.
Worse yet, all of Canada might be affected by any changes.
The automotive portion of our Environmental Protection Act, for instance, essentially copies American mandates. Would we also enact a Trumpian reduction? Would we have any choice?
One of the problems with literally being the tick on an elephant’s butt is that few — probably none, if we’re being honest — automakers are going to produce cars specifically for the Canadian market should we not follow the American lead.
And now that the U.S. is no longer the biggest auto market in the world — China’s market is larger — its influence on the future of the automobile is much reduced. Even General Motors, for instance, sells far more cars in China than it does in the States.
No longer the power player it once was, America might soon find itself in the position of needing to bow to international standards rather than set them. The Trump administration’s decision to go it alone may actually accelerate that reckoning.