The Energy 202: California Says Trump's Fuel Standards Plan Will 'Forfeit Our Best Chance to Fight Climate Change'

November 01, 2018

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by Dino Grandoni (Washington Post) California is coming out swinging in its official response to one of the Trump administration's most consequential attempts at rolling back regulations to date — to freeze fuel-efficiency standards for cars and trucks through 2026.

In a 400-page comment on the proposed rule that will be filed today (October 26, 2018) to the federal government, the California Air Resources Board warns that proposal will worsen air quality and "forfeit our best chance to fight climate change."

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California officials call the Trump administration's way of thinking "a nihilistic and fatalistic view that future generations will necessarily be subject to a climate in which human civilization as it currently exists is impossible."

"It is also illegal,” state officials say in the filing. They point to a 2007 Supreme Court decision that ultimately compelled the federal government to address climate change.

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California's Friday filing outlines the potential forthcoming legal battle between the federal government and left-leaning states. California's attorney general, Xavier Becerra (D), and nearly two other dozen attorneys general have promised to defend the Obama-era fuel standards in court. READ MORE

California blasts Trump proposal to freeze fuel-efficiency standards as ‘flawed’ and ‘illegal’ (Washington Post)

20 U.S. states, major cities urge Trump to drop fuel efficiency freeze (Reuters)

The Trump Administration Flunked Its Math Homework (The Atlantic)

Washington state follows California lead on vehicle emissions (Utility Dive)

Let’s Regulate CO2 Emissions, and Forget the 55.4 MPG 2025 Corporate Annual Fuel Economy Standard: The Inexpensive Way to Quickly Reduce Green House Gases (Advanced Biofuels USA)

The Interaction of the Clean Air Act, California’s CAA Waiver, Corporate Average Fuel Economy Standards, Renewable Fuel Standards and California’s Low Carbon Fuel Standard (Advanced Biofuels USA)

Excerpt from The Atlantic: The administration’s clean-cars rollback is riddled with errors. In one case, it forgot to divide by four. In another, it accidentally deleted 700 billion miles of driving.

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The mistakes range in scope from the comical to the bizarre, from the obviously accidental to the how-did-they-miss-that. In one case, federal employees have forgotten to divide a crucial figure by four. In another, officials have assumed that raising the cost of cars will lead more people to buy them, a violation of the principle of supply and demand. In a third case, the proposal asserts that freezing fuel-economy standards for new cars will lead the owners of old cars to drive their vehicles less.

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Taken together, the errors artificially lower the rollback’s costs and boost its safety benefits, experts say. Every single error so far identified appears to tilt the analysis in Trump’s favor.

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Honda and General Motors broke ranks with other automakers and signaled unease about the rollback, with Honda openly opposing it. The car industry had previously stood united in supporting the Trump administration.

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Most economists say the rollback will cost Americans at the pump: The Rhodium Group, an energy research firm, estimates it could cost Americans $236 billion in extra gasoline by 2035. Even the plan’s supporters admit that it will warm the planet: The Trump administration says freezing the rules would increase U.S. carbon-dioxide emissions 9 percent by 2035.

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The fine print of the proposal says that “newer, safer cars” will prevent 30 deaths every year at most—a far cry from the claimed 1,000. But an EPA memo included in the proposal warns that safe will increase traffic fatalities, leading to 17 more deaths every year.

In any case, “a large portion” of the lives that safe claims to save do not come from “newer and safer vehicles,” as the proposal says. They arise instead from an erroneous calculation spat out by a broken computer model; and an assumption—never advertised by the Trump administration—that Americans will drive less when forced to buy less fuel-efficient cars.

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Its most ruinous problem is the case of the “phantom miles.” At a crucial moment in the scrappage model’s analysis, it mysteriously deletes roughly 700 billion miles of nationwide driving from its simulation of the Trump rollback. It does so due to a nonsensical assumption that owners of old cars—cars built between 1977 and today—will drive much, much less under the rollback than they would under the Obama-era rules.

This makes little sense. The Trump rollback only affects new cars sold after 2020. Yet the scrappage model projects that the owner of an old car—say, a pickup truck built in 2016—will restrict her driving in 2022 because new cars, none of which she drives, get worse fuel economy.

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The Trump scrappage model says that the Obama rules increase the price of new and used cars—and then it bizarrely asserts that more people will decide to buy those cars anyway.

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If cars become 100 percent more fuel efficient, most people will drive them about 10 percent more, so actual gasoline use will only fall by 45 percent—rather than the 50-percent savings that would otherwise have been expected.

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But under the Trump administration, NHTSA has doubled this effect. It assumes that if fuel economy increases by 100 percent, Americans will drive 20 percent more, so actual gasoline use will only fall by about 40 percent.

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Just this summer, the nonpartisan economic research firm the Analysis Group reported that U.S. fuel-economy obeys a rebound rate of about 10 percent.

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When calculating year-by-year vehicle sales, the proposal’s authors appear to have confused an annualized rate of change with a quarterly rate. “It’s a forgetting-to-divide-by-four issue,” said Gillingham, who worked with James Stock, a professor of economics at Harvard, to identify the mistake.

Using these flawed rates, the Trump administration projected that increasing the price of a new car by $1,000 led to 600,000 fewer sales over the next 10 years. But once the problem was fixed, Gillingham and Stock found that raising the cost of a new car actually decreased sales by only 120,000 vehicles—many fewer than once projected.

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Most of the rule’s economic analysis turns on the scrappage model and the sales model. If both models need to be heavily revised, then the rule’s costs may very well exceed its benefits. READ MORE