US carmakers may regret what they wished for on pollution rule

THE TITANS of Detroit’s auto industry met with President Donald Trump four days after he took office and warned that jobs could be lost if the emission limits enacted by his predecessor weren’t made more flexible.

This week, the Trump administration responded by agreeing to revise the Obama administration standards -- but in a way that may backfire on the carmakers.

In announcing the decision, Environmental Protection Agency Administrator Scott Pruitt included a tacit threat that the federal government might no longer go along with California’s smog-fighting policies. That could lead to pollution rules that vary statebystate, greatly complicating life for the people making the cars.

“Automakers will get the flexibility they wished for, but at what cost?” said Jessica Caldwell, executive director of industry analysis at the car shopping website Edmunds. “The unfortunate reality is that this decision comes with a logistical nightmare in the short term.”

After the EPA said that fuel- efficiency regulations for cars and light trucks were too stringent and Pruitt singled out California, officials of that state promptly vowed to defend its standards in court, signalling that years of litigation and uncertainty could lie ahead, further complicating an industry already facing profound change from self- driving cars and mobility services.

John Bozzella, the chief executive officer of the Association of Global Automakers, said the group supports the EPA’s “course correction,” even as he highlighted the importance of a single, nationwide set of standards.

“We believe the best way to achieve our collective goals is under a single national program that provides an aggressive but achievable pathway, a variety of compliance tools and factors in the role of customers,” Bozzella said in a speech at EPA headquarters.

The EPA’s move to pare Obama- era vehicle standards dovetails with other Trump efforts to roll back Obama policies combating climate change, including the Clean Power Plan that slashed greenhouse gas emissions at power plants and regulations governing methane leaks at oil wells. Easing requirements meant to save fuel also align with Trump’s celebration of US oil production and American “energy dominance.”

Pruitt said the agency would work with California and other states. However, he said the agency was re- examining the Clean Air Act waiver that has given California unique authority to set its own cleanair rules since 1970, and that Sacramento wouldn’t set auto efficiency rules for the nation.

“Cooperative federalism doesn’t mean that one state can dictate standards for the rest of the country,” Pruitt said in the agency’s press release.

“EPA will set a national standard for greenhouse gas emissions that allows auto manufacturers to make cars that people both want and can afford -- while still expanding environmental and safety benefits of newer cars.”

Twelve other states follow California’s emission rules, together accounting for about a third of the American automobile market.

The EPA will now begin drafting fresh auto standards for 2022-2025 alongside the National Highway Traffic Safety Administration, which has been developing new fuel economy targets for the same period. The new rules will be adjusted from current levels “as appropriate,” Pruitt said.

California officials vowed to resist a Trump-led rollback of the federal targets, with state Attorney General Xavier Becerra threatening a lawsuit and Air Resources Board Chairman Mary Nichols blasting the EPA’s move as a bid to “demolish the nation’s clean car programme.”

“California will not weaken its nationally accepted clean car standards, and carmakers will continue to meet those higher standards, bringing better gas mileage and less pollution for everyone,” Nichols said in an emailed statement. “This decision takes the US auto industry backward, and we will vigorously defend the existing clean vehicle standards and fight to preserve one national clean vehicle programme.”

Carmakers and their trade associations applauded Pruitt’s decision but stressed the need to preserve a single set of aligned standards throughout the US.

“Our priorities for modernising the standards are the need for one national set of requirements and the need to comprehend new technology developments and increased shared and autonomous electric vehicles,” General Motors Co. said in a statement. “We look forward to working with all parties on modernised standards that achieve better fuel economy for our customers and a better environment for everyone.”

As the Trump administration begins rewriting the industry’s critical rules, carmakers may not be in the driver’s seat. Instead, that role may go to influential free-market conservatives who for years have chafed at the federal government’s deference to California.

“Decisions about what kinds of cars people buy and drive should be made by the consumers themselves, not bureaucrats in Sacramento,” said Thomas Pyle, president of the American Energy Alliance, a Washington advocacy group.— Bloomberg