Automakers Strike a Deal with California to Reduce Tailpipe Pollution

Four of the world’s largest automakers, including the Ford Motor Company, have struck a deal with California to reduce tailpipe pollution, in a blow to the Trump administration as it prepares to roll back national vehicle pollution standards and revoke states’ rights to set their own such rules.

Source: NY Times | Published on July 26, 2019

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While Trump administration officials in the White House and Environmental Protection Agency have been working on a plan to drastically weaken Obama-era rules on planet-warming vehicle pollution, four automakers — Ford, Honda, Volkswagen Group of America and BMW of North America — have been holding talks in Sacramento on a plan to move forward with the standards in California, the nation’s largest auto market.

The E.P.A. and Transportation Department are expected to announce this summer a new rule that would effectively eliminate the Obama-era rule, which would have required passenger vehicles to achieve an average mileage of about 52.5 miles per gallon by 2025. The rule, which would have significantly lowered vehicle emissions of planet-warming greenhouse gas pollution, was a cornerstone of President Barack Obama’s policies to combat climate change. The new Trump rule is also expected to revoke the legal authority of California and other states to set their own, stricter, state-level standards.

Although Mr. Trump has promoted his plan as a gift to the auto industry, automakers have said it could actually harm them by creating regulatory uncertainty as California and other states claimed the legal right to set their own standards and fought back in the courts. Automakers feared that a mix of state and federal pollution standards could split the United States’ auto market, forcing them to make and sell entirely different types of vehicles in different states.

In striking a deal with California, the automakers are publicly rejecting the Trump plan and following the legal advice of some industry experts who say that it is California, rather than the Trump administration, that is more likely to win the legal battle over climate change pollution. Under the terms of the new deal with California, the automakers selling cars in that state would comply with a slightly looser standard than the original Obama rule. Instead of reaching an average fuel economy of 52.5 miles per gallon by 2025, they would be required to reach a standard of about 51 miles per gallon by 2026.

In a joint statement, the four automakers said the agreement with California would lead to “much-needed regulatory certainty.” The deal would allow the companies to “meet both federal and state requirements with a single national fleet, avoiding a patchwork of regulations while continuing to ensure meaningful greenhouse gas emissions reductions,” they said.

California said that the terms of the deal would give automakers an extra year to improve their fleetwide fuel economy to levels laid out in the Obama-era plan. The deal would also allow them more leeway in meeting those standards through other means, like earning credits for fuel-saving technology.

“This agreement represents a feasible and acceptable path to accomplishing the goals of California and the automobile industry,” Mary D. Nichols, chair of the California Air Resources Board, said. “If the White House does not agree, we will move forward with our current standards but work with individual carmakers to implement these principles,” she said.

“Few issues are more pressing than climate change, a global threat that endangers our lives and livelihoods. California, a coalition of states, and these automakers are leading the way on smart policies that make the air cleaner and safer for us all,” said California’s governor, Gavin Newsom, in a statement. “I now call on the rest of the auto industry to join us, and for the Trump administration to adopt this pragmatic compromise instead of pursuing its regressive rule change. It’s the right thing for our economy, our people and our planet.”

Some environmental groups criticized the slower pace and expanded loopholes the deal awarded the automakers. “That means more pollution, less savings at the pump and a bad precedent for future standards,” said Daniel Becker, director of the Safe Climate Campaign at the Center for Auto Safety, a Washington-based nonprofit group.