WASHINGTON, DC—This week, the Washington Post reported: “The Trump administration and California are continuing on their collision course over how fuel efficient the next generation of cars and light trucks needs to be.”
A new blog post published today by Resources for the Future (RFF) Senior Fellows Alan Krupnick and Joshua Linn attempts to sort out this confusing issue—but an issue that nonetheless will affect greenhouse gas emissions and fuel economy of autos and light-duty trucks.
Is this the real deal or a PR stunt? Krupnick and Linn explore the answer.
The agreement in question refers to corporate average fuel economy standards, in which the federal government, the state of California (along with the 13 other states that follow California’s lead), and automakers all have a say. The impasse began after the US Environmental Protection Agency (EPA) rushed to complete its review of aggressive standards for auto emissions that had been set by the Obama administration in 2012 to run through 2025.
However, after EPA endorsed the original standards, many auto companies feared that their fuel-efficient vehicles would remain unsold. The Trump administration more than accommodated them with the proposal to fix standards at 2021 levels and eliminate California’s ability to set tighter standards. With compromise apparently off the table, California reached a deal with four auto companies (Honda, Ford, VW, and BMW) to meet California’s plan for new standards, affecting not only sales of those cars in California, but nationwide.
Krupnick and Linn suggest, “With long lead times in bringing new vehicles to market, maybe it’s just good business to plan for tighter standards, irrespective of whether the other 70 percent of the industry joins the California agreement.”
Resources for the Future (RFF) is an independent, nonprofit research institution in Washington, DC. Its mission is to improve environmental, energy, and natural resource decisions through impartial economic research and policy engagement. RFF is committed to being the most widely trusted source of research insights and policy solutions leading to a healthy environment and a thriving economy.
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