In addition to tearing up the fuel economy rules for 2025 put in place by the Obama administration, the Trump administration declared last year it would delay implementing fines on car makers that fail to meet the current standards. Those fines were set at $5 for every tenth of gallon below the mandated standard way back in 1975. They remained at that level until being bumped to $5. 50 per tenth of a gallon in 1997, meaning that on an inflation adjusted basis, their impact on automakers became less and less over time. The result was that manufacturers found it cheaper to pollute than to increase fuel economy.
NHTSA, which administers the fine program, finally raised the fines to $14 per tenth of a gallon in 2016, making them equivalent to the original $5 when the program began 40 years previously. “Foul!” screamed the manufacturers. “Jobs will be lost! The economy will be irreparably harmed! And we will have less money to pay fat bonuses to senior management!” Well, OK, they didn’t really say that last part, but they found a friend in the new Trump administration, which announced it would delay the increased fine regulation indefinitely.
“Oh, no you won’t,” said the Second Circuit Court of Appeals last week. The National Resources Defense Council, Center for Biological Diversity, and the Sierra Club sued the government last year, arguing that the delay in enforcing the new fines was illegal. Last week, the Second Circuit agreed.
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In an e-mail to CleanTechnica, the NRDC said, “This ruling is a victory for consumers, our economic security, public health and the planet because the Trump administration’s illegal maneuvers to undercut needed fuel economy safeguards was thwarted. The Trump administration should be standing up for the public that overwhelmingly supports strong fuel economy standards and enforcing strong penalties on automakers that fail to meet those standards.”
How much will drivers benefit if the fines are restored? When the NRDC filed its suit last September, it said, “Consumers can expect to save between $3,200-$4,800 over the lifetime of a new vehicle meeting the standards, even at low gas prices. If gas prices rise, the savings will be up to $8,200 per vehicle. A recent Consumers Union survey found 9 out of 10 consumers support continued fuel economy improvements.
“[T]he 2012-2025 standards are expected to cut imports by one-third in 2030 because the program avoids consumption of 3.1 million barrels of oil per day. Annual carbon pollution in 2030 will be reduced by about 570 million metric tons of CO2, which is equivalent to the pollution from 85 million of today’s cars or 140 coal-fired power plants.”
Those numbers are not small potatoes. They illustrate clearly how holding the manufacturers’ feet to the fire on fuel economy standards benefits everyone. A new report by Synapse Energy Economics confirms that fuel economy standards drive economic growth. Those standards are expected to add 100,000 jobs to the economy by 2025 and increase GDP by more than $13 billion by 2025.
This all may be much ado about nothing, as average fuel economy numbers are rising, thanks to the addition of more hybrid, plug-in hybrid, and battery electric cars to America’s roadways. But this victory is intertwined with what happens next as the Trump administration tries to weaken the next level of fuel economy standards that will apply through 2025. If the new fines are enforced and if the fuel economy standards increase, car makers could be hit with significant financial penalties if they are out of compliance.
The next question is, what happens if the government refuses to abide by the court order? An appeal to the full Second Circuit and/or the Supreme Court seems inevitable as the Trumpies try every trick in the book to slow walk all environmental policies. Environmental groups may be celebrating today, but there is still a long way to go before any car manufacturer pays one penny more in fines for missing existing fuel economy standards.
The interesting corollary to all this sturm und drang is the outrage directed at Volkswagen for allowing its diesel-powered cars to pollute more than permitted versus the furious assault by the auto industry and the current administration on any proposal that would clean up exhaust emissions from gasoline powered cars.
Add in the blasé attitude toward diesel-powered vehicles that carry our children to school, pick up our trash, and move goods across country and you have a curious situation in which everyone wants to look the other way at the majority of vehicular pollution while rabidly pursuing punishment of Volkswagen. What VW did is inexcusable, no doubt about it. But so are the actions of the automakers who are more than willing to continue endangering people and the environment if it means increasing profits.
America is fiercely resisting the clean energy and clean transportation revolution, looking for ways to undo the Clean Air Act and the Clean Water Act, and searching diligently under every rock for more oil and gas reserves. The foofraw over fuel economy fines is just a small slice of the environmental protection pie, but it is an accurate indicator of America’s less than enthusiastic attitude toward confronting the oncoming climate emergency.