Trump to roll back fuel economy standards, reversing major effort to combat climate change

WASHINGTON —  The Trump administration, scrambling as deadlines approach, plans soon to release rules on fuel efficiency for new cars and trucks that have pitted the federal government against California on a policy key to combating climate change.

The announcement, expected as early as Tuesday, follows months of struggle by the administration to justify the proposed changes. The administration’s own experts have warned that the proposal to weaken fuel-efficiency standards will lead to dirtier air and potentially cost the auto industry tens of thousands of jobs.

The new rules come despite the economic turmoil and growing death toll currently being caused by the coronavirus pandemic. The proposal to roll back fuel economy rules would be among the biggest steps the administration has taken to reverse an existing environmental policy. It’s been pushed within the administration by officials with strong beliefs about the benefits of reducing regulations, some of whom also have long-standing ties to the fossil-fuel industry.

The Environmental Protection Agency and Transportation Department originally proposed freezing mileage and greenhouse gas emission standards at this year’s levels, sparing automakers from having to comply with annual efficiency increases put in place under President Obama.

That met a furious response from officials in California and several other states as well as unexpected resistance from auto companies, who worried the administration was going overboard and dragging them into years of court battles with states.

In its final draft, the administration backed off significantly, convinced it would be impossible to defend its original plan in court and that the proposal would result in a slew of negative publicity for automakers that might endorse it.

According to a final draft sent to the White House earlier this year, the new standards will require automakers to increase fuel economy across their fleets by 1.5% a year, with a goal of achieving an average of 40 miles per gallon by 2026. That’s still a major departure from current rules, which mandate annual increases of 5%, reaching an average of 54 miles per gallon by 2025.

Dialing back its original proposal hasn’t made the administration’s problems go away.

The government’s cost-benefit analysis shows that even if the rollback lowers the cost of new cars — as the administration maintains it will — drivers will likely still lose money in the end by having to buy more gas.

And although President Trump has boasted that the new standards will spur economic growth, the administration’s forecasts aren’t remotely sunny. They project car companies could suffer a loss of thousands of jobs by making dirtier cars that would be locked out of many overseas markets.

Two of the largest car markets in the world, China and the European Union, have set more stringent gas mileage and emissions requirements than the United States. Automakers around the world have to comply if they want to remain competitive. But economists say that if American car makers focus on building less efficient cars for the U.S. market, they could fall behind globally, and they and their suppliers could suffer.

In a February report to EPA Administrator Andrew Wheeler, the agency’s science advisory board warned of “significant weaknesses” in the technical analysis of the new rule.

“From everything we know, the administration has been absolutely flailing in their justification of this new rule,” said David Cooke, senior vehicles analyst for the Union of Concerned Scientists, a nonprofit environmental advocacy group. “And they still can’t fudge the numbers enough to make it look like a good idea.”

Environmentalists have said that if the new regulations survive court challenges, they will cause higher greenhouse gas emissions and worsen air pollution. Public health groups have urged the government to reconsider, pointing to the likelihood that more air pollution could contribute to higher numbers of premature deaths.

The oil and gas industry has praised the administration’s plan, which is expected to lead to higher gas consumption, as have groups that downplay or deny climate change. The proposal has divided the auto industry.

After repeatedly postponing the release of the new rule, the administration is facing deadlines that may have forced its hand. Any regulatory changes the administration wishes to make have to be finalized by April 1 to apply to the 2022 model year.

Additionally, under the Congressional Review Act, new rules issued after May 19 could be invalidated by the next Congress. If Trump is reelected, he could veto attempts to weaken fuel economy standards, but if he’s not, rules published after this window closes are at greater risk. The Republican-controlled Congress used the review act in 2017 to undo a number of rules issued in the final months of the Obama administration.

The new standards will apply nationwide. Although California has historically set its own tougher car pollution rules, the Trump administration last year moved to strip the state of that authority. California and many of the other states that have adopted its clean-car standards have sued the administration over this change, and the issue likely won’t be resolved until next year at the earliest.

Expecting that Trump’s EPA would seek to revoke its unique powers, California’s clean-air regulator made a deal last year with four automakers that is not as tough as the Obama standards, but is more ambitious than the administration’s proposal. The agreement between the California Air Resources Board and the automakers — Ford, Honda, Volkswagen and BMW — covers about 30% of new cars and SUVs sold in the U.S.

At the time, Gov. Gavin Newsom said he was confident more automakers could join the pact, spurning the administration. That did not happen. Instead, General Motors, Fiat Chrysler, Toyota and other automakers sided with Trump in a lawsuit challenging California’s authority to set its own emissions standards.

Most automakers have said they want one standard in the U.S., rather than having to cater to states that follow California’s rules and others that adhere to the federal government’s regulations. But car makers differ greatly on what that standard should be.

Early in the administration, some automotive industry groups and car makers lobbied the president to roll back the Obama standards, arguing that the regulations were unrealistic and were driving up the cost of new cars.

In the end, their efforts split the industry into two camps — those companies that were on team Trump and others that became fearful at the prospect of legal battles with California and the costs of regulatory uncertainty.