UCS Blog - Clean Vehicles (text only)

Oregon Legislature Can Boost Electric Car Sales

The Oregon legislature has the opportunity to boost electric vehicle sales in the state and deliver benefits to all Oregonians by passing pending legislation for electric vehicle incentives in House Bill 2704.

Electric vehicles (EVs) are a critical solution to cutting oil use, improving air quality, and reducing global warming pollution. EVs are also a better choice for many Oregon drivers, offering fuel savings and often a better driving experience compared to a gasoline car.

Driving on electricity is cheaper than driving on gasoline for most people, even with today’s lower gasoline prices. Based on Northwest gasoline prices in 2016, we found that driving the average new gasoline car (29 mpg) for a year (11,350 miles) cost $949 in Oregon. Driving that same distance on electricity cost an average of $363 in the state.*

Given the volatility of gasoline prices, using electricity as a fuel also means more stable and predictable refueling costs for the years ahead. And since Oregon lacks oil production and refining, switching away from petroleum can keep more money in the local economy.

EVs in Oregon also have environmental benefits. The average EV on Oregon’s electric power mix produces fewer global warming emissions than any gasoline-powered vehicles on the road—equivalent to a 75 mpg gasoline car, according to UCS analysis in 2015. As Oregon continues to transition to cleaner sources of electricity (thanks to last year’s coal to clean bill) the climate advantages of EVs will only increase.

Despite these advantages, EVs still face barriers to their adoption, so policies are needed to make EVs available and affordable for more average Oregonians. A consumer incentive for zero-emission and plug-in hybrid electric vehicles, as proposed by HB 2704, will help motivate prospective car buyers to investigate electric drive options and is also an important signal from the state in support of needed technologies.

States with EV incentives lead the nation in EV sales. For example, in California, more than 90 percent of surveyed EV rebate recipients said that the state’s rebate was important to their decision to buy an EV.

Now is an important time for Oregon to make a commitment to building a mainstream market for EVs. As the Oregon Global Warming Commission report to the legislature showed, Oregon is falling behind on its commitments to cut GHG emissions in large part because of increasing transportation sector emissions.

Thanks to Oregon’s Zero Emission Vehicle program, manufacturers are required to sell EVs in Oregon.  This policy that helps ensure EVs are available should be matched with policies that help induce demand. A consumer incentive is the single biggest act Oregon can take to enable more drivers to choose an electric car, so passing HB 2704 is an important step forward for EVs in the state.

*We calculated prices using the following electricity and gasoline price data from the US Energy Information Agency: 2016 average residential electricity price $0.107/kWh, 2016 average gasoline price $2.40/gallon. Costs assume 11,350 annual miles driven, 28.6 MPG gasoline efficiency, 0.30 kWh/mile EV efficiency.

Click here to find more information on How Oregon Can Benefit From Electric Vehicles (2015).  

 

What Will It Take for Automakers to Meet California’s EV Requirements? Not as Much as You Might Think.

California’s Zero Emission Vehicle (ZEV) regulation has been instrumental in catalyzing the EV market, and has also long been a source of complaint for automakers.

When the ZEV rule covering the 2018 through 2025 time period was initially adopted in 2012, California’s Air Resources Board (CARB) estimated it would require over 15 percent of new cars in 2025 to be electric drive vehicles – a figure still cited in media stories about the rules. However, that number is no longer accurate.

The ZEV program will require less than 8 percent EV sales by 2025 and recent sales figures show that several automakers are already well on their way to meeting this target in California.

Last month, the ZEV regulation, along with the rest of California’s Advanced Clean Cars program was reevaluated to check whether this standard was still achievable through 2025. As part of the Advanced Clean Cars review, the CARB updated its estimate of the ZEV sales required to meet the regulation. The state now estimates that the ZEV standards would require new EV sales in 2025 to be less than 8 percent, roughly half of the previous estimate of 15 percent.

The reduction in the estimated effect of the standard is primarily due to two factors: the range of EVs has increased far faster than anticipated (increasing the ZEV credits earned per vehicle), and the current stockpile of ZEV credits from early compliance with the regulation which can be used in place of future ZEV sales.

The unanimous decision of the board was to continue the current regulations through 2025, due to the progress that automakers have already made in selling EVs and also the dramatic improvements in EV technologies that have occurred over the last five years. For example, General Motors last year’s EV sales in California reached 7 percent, well in excess of the current ZEV rules requirements and has increased the range of its battery electric car from 82 miles to well over 200 miles.

The updated estimates of the ZEV regulation’s requirements in California are much lower than initially thought. Several automakers are selling significantly more EVs in California than the rule requires. Note: not all BMW EV models are certified as ZEV-compliant vehicles.

EV leaders hit new highs in 2016

EV sales in California increased 18 percent from 2015 and 3.5 percent of all new cars in the state were plug-in electric, up from 3.1 percent last year.

But the story is more impressive when you consider several major automakers were absent from the market in 2016.  If we exclude the 2 major automakers without a plug-in EV in 2016 (Honda and Toyota), EV sales would have exceeded 5 percent of new car sales in California.

 

Several automakers were well above 5% EV sales in California in 2016. Tesla not shown, as 100% of its sales are electric. Data source: California New Car Dealers Association, IHS Markit

BMW remained the leader in California (excluding Tesla), nearing 9 percent of all cars having the ability to be plugged in. General Motors (GM) was clearly ahead out of the Big Three domestic automakers at 7 percent EV sales. However, that includes brands such as GMC, Buick, and Cadillac that have no EV models available (excluding the discontinued Cadillac ELR).

If you look only at GM’s main Chevrolet brand, almost 1 in 10 new Chevys sold in California were EVs. With the addition of the long-range Bolt EV for 2017 as well as a new Cadillac plug-in hybrid, GM is poised to continue to be an EV leader in California.

 

Leading EV brands in California. Data source: California New Car Dealers Association, IHS Markit

Some of the laggards starting to turn around (though not all)

Some of the companies that we identified as laggards in our last evaluation of the EV market are starting to show signs of making more effort in the building and selling EVs.

Hyundai/Kia moved to over 1 percent EV sales in 2016 and is adding new plug-in models to its line up in 2017. Toyota sold low volumes of the Mirai fuel cell electric in 2016 in part due to delays in hydrogen refueling station deployment. However, Toyota now has one of the top selling plug-in hybrids with the Prius Prime.

Fiat Chrysler has long been a critic of electric vehicles, but soon will sell the first plug-in minivan, the Chrysler Pacifica Hybrid.  Honda remains in last place, selling 6 fuel cell electrics in 2016 while delivering 287,526 gasoline cars in the state. They are planning on bringing battery electric and plug-in hybrid versions of their Clarity sedan to market in 2017, though Honda’s new battery electric is expected to have only 80-mile range, which could limit its competitiveness given the number of similar vehicles with higher range already on the market.

 

These major automakers sold over 850,000 cars in California last year, but just over 3,000 ZEVs. Data source: California New Car Dealers Association, IHS Markit

Automakers are demonstrating they can meet 2025 ZEV targets

The California Air Resources Board affirmed its ZEV regulations, citing ample evidence that automakers can achieve the 2025 target. The data supports that decision, as automakers that have developed and marketed EVs in California are already selling these cars in volumes in excess of the ZEV current requirements and are well poised to get to 8 percent sales by 2025.  These same automakers have paved the way for their industry counterparts who have been slower to step up their efforts.

In the other states that have the ZEV program, fewer vehicle models have been available to consumers and automaker efforts have lagged, but there is ample time (8 years) to bring more effort to these states. Additionally, they are not starting from scratch.  More than 25 ZEV models are being produced by automakers today, and that number is expected to reach 70 in the next 5 years.  These vehicles need to be brought to states outside of California and marketed to consumers. In addition, incentive programs in East Coast states have been expanding, like the recently announced program in New York state.

If major automakers don’t step-up in the ZEV market, they may end up paying Tesla (or other EV manufacturers) to do it for them.  Tesla isn’t subject to the ZEV program requirements because the rules only apply to large automakers who sell conventionally-powered vehicles. But Tesla can generate credits and sell those to other manufacturers who choose not to sell ZEVs. Tesla’s success puts more ZEV credits on the market – making the 8 sales percent target even easier to meet.

So let’s be clear. There is no 15 percent sales requirement for EVs in California or any other state.  California’s recently reaffirmed Zero Emission Vehicle will require less than 8 percent new EV sales by 2025 – a target that automakers are already demonstrating is within striking distance.

 

Top Clean Cars from the 2017 New York Auto Show

I just got back from checking out the 2017 New York Auto Show and eating a couple dirty water hotdogs in the process. Here are my top picks for the clean cars that were on display and headed to a showroom near you.

Kia Niro Plug-In Hybrid

The 2017 Kia Niro. Photo: Kia Motors

The 2017 Kia Niro Plug-In Hybrid is a well-proportioned crossover utility vehicle that – like all electric vehicles – can be plugged into any regular grounded electrical outlet to charge its 8.9 kWh battery pack. The Niro’s electric drivetrain is paired with a traditional gasoline-fueled engine that will kick in after the 25 mile electric range is exhausted. Though 25 miles might seem paltry, keep in mind that over a quarter of Americans commute under 5 miles to work and another quarter commute under 15 miles each day. The Niro can help those with longer commutes greatly reduce their gasoline use and emissions too.  Having a relatively small battery pack also means that the Niro will have fast charging times. Level 2 charging (from a 240V outlet like one used for a home washer / dryer) will only take a little over an hour to totally refill the Niro’s batteries. The Niro is expected to hit the U.S. market later this year, and will be upgraded to an all-electric version for European markets in 2018.

Chevy Bolt

The 2017 Chevy Bolt might be a game changer for the EV industry. Photo: Chevy

I’ve covered the Bolt before, but the NY Auto Show gave a lot of attention to this all-electric offering from Chevy, and the Bolt remains an indicator for whether electric vehicles will ultimately succeed in the U.S. Don’t worry, the signs are encouraging given what the Bolt and other electrics have to offer.

The 2017 Bolt is MotorTrend’s Car of the Year, will go 0-60 in just 6.5 seconds, and has an estimated all-electric range of 238 miles. These performance stats should help the Bolt appeal to gearheads and eco-drivers alike. With a price tag of around $30,000 after the federal tax credit, joining the electric transportation revolution won’t be a strain on many new car buyers’ wallets, especially considering that the average new car price in 2016 was up to $33,560.

The Bolt’s battery pack can get 90 miles of charge in just 30 minutes from optional DC fast charging, far less time than it takes me to pit stop with my toddler on my way up north for holidays.  A full charge will take about 9 hours via slower level 2 charging, not a big deal considering that electric vehicle drivers have found that over 80 percent of their charging has been done at home – and mostly overnight. And, perhaps most importantly, the Bolt will save you money on fuel. Driving on electricity costs about half as much as driving on gasoline and can cut your vehicle emissions in half compared to similar gasoline vehicles.

Chrysler Pacifica Hybrid (Plug-In Version)

The Chrysler Pacifica Hybrid is the first electric minivan in the U.S. Photo: By author

The 2017 Pacifica Hybrid is a plug-in version of Chrysler’s popular minivan lineup with a horribly confusing name. At first glance you might mistake this for a traditional gasoline-hybrid without a plug, but no, it actually has a plug and rechargeable battery pack.

The Pacifica Hybrid will have a 16 kWh battery pack that will give it 33 miles of all-electric range, and a gasoline-powered V6 engine that is good for a combined 32 mpg after the battery is depleted, which is really quite good for a large minivan. Other minivans typically get around 20-22 mpg. Level 2 charging can give the Pacifica a full charge in just 2 hours, while level 1 charging from any normal household outlet will take about 12 hours.  Confused about the difference between fast and regular charging? Check out this primer.

WardsAuto gave the Pacifica Hybrid engine high marks as an outstanding “propulsion system,” and the NY Daily News thinks the Pacifica is the best minivan you can buy. These accolades are both important and warranted, as this Chrysler is the first plug-in minivan sold in the U.S., and a critical step toward giving U.S. consumers electric options to choose from among different types of vehicles.

Cadillac CT6 Plug-In

2017 Cadillac CT6 Plug-In. Photo: Cadillac

I’ve got a soft spot for Cadillac. My grandfather exclusively drove jet black Cadillac’s with cream white interiors until he had to stop driving, and I still remember what it felt like to climb into a passenger seat that felt more like a top-of-the-line barcalounger than car seat.

Cadillac is also a quintessential American luxury brand, and has been idolized in countless movies and hit songs. So, I was glad to see Cadillac present a plug-in version of their flagship sedan at the NY Auto Show. The 2017 CT6 Plug-In is an electric / gasoline hybrid that puts out 335 horsepower and a respectable 31 miles of all-electric range from a 18.4 kWh battery pack that also lets it run up to 78 miles in an extra fuel efficient mode. Overall, this model boasts a 62 mpg combined EPA rating, which is extremely impressive for a heavy luxury sedan. The 2017 Audi A8, by comparison, only gets 22 combined mpg.

Recharging the CT6 will take about 4.5 hours and can also be charged via any regular home outlet. Oh, and don’t forget that this beast will sprint from 0-60 in an estimated 5.2 second, which makes it nearly as quick as the Twin-Turbo version. So, if you’ve got around $75,000 to drop on a dope ride, you might want to consider the CT6 Plug-In as a fashionable and fuel efficient way to cruise.

Volkswagen e-Golf

The 2017 VW e-Golf. Photo: VW

Volkswagen is trying to make amends for its transgressions (see Dieselgate). As part of these efforts, which include investing in electric charging infrastructure, the German automaker is set to update an all-electric version of its popular hatchback.

The 2017 VW e-Golf uses a 35.9 kWh battery pack that gives it an estimated 125 miles of all-electric range on a single charge, plenty for many commutes and enough for weekend warrior road trips with a charge pit stop along the way. Volkswagen also made the previously optional 7.2-kW onboard charger standard, meaning that the recharge time from a 240 volt power source (like what is used for a home washer / dryer) has dropped to less than six hours. A DC fast charger that can replenish the battery to 80 percent of its capacity in about an hour, and VW also upgraded the electric motor, dropping its 0-60 time to 9.6 seconds.

Last year, the e-Golf SE started at $29,815 (before the $7,500 federal tax credit and any state or local incentives). If the 2017 model holds the line on that pricing when it goes on sale early in 2018, it should stay competitive with the Tesla Model 3 and Chevy Bolt among the most affordable all-electric vehicles ready for prime time.

How Clean Are the Newest EVs?

How clean are the newest EV models? As we’ve shown before, an EV is cleaner than the average gasoline car. But, the global warming emissions savings from using an electric vehicle depend in part on where in the U.S. you live.

We have an online tool that lets you compare most of the EVs that have been sold over the last six years, and we’re continually updating our database with the latest models.

Here are just some of the latest additions that you can choose to analyze using the tool:

Chrysler Pacifica Hybrid

Chrysler is marketing the Pacifica as a ‘hybrid’, even though it’s actually better: it’s a plug-in hybrid. Photo: Dave Reichmuth

Chrysler is marketing the Pacifica as a ‘hybrid’, even though it’s actually better: it’s a plug-in hybrid.The new Chrysler Pacifica minivan is being advertised as available with merely a hybrid drivetrain, but it’s actually a plug-in hybrid.

This seven-passenger van is rated at over 30 miles of electric range and then gets over 30 MPG when the gasoline engine is being used. This combination makes the Pacifica the cleanest minivan option by a long shot, as the best gasoline models only get 22 MPG. Its maker, Fiat Chrysler America, was one of our worst rated companies for commitment to EVs, so hopefully this means that they are starting to get on the right path.

Hyundai Ioniq BEV

The Ioniq is the first vehicle to sold as a conventional hybrid, plug-in electric hybrid, or a battery electric model. Photo: Ki Hoon. CC-BY-SA-4.0 (Wikimedia).

 Hyundai is actually releasing three versions of the Ioniq: an all-electric version, a plug-in hybrid, and a gasoline-only ‘conventional’ hybrid.

The first one to reach the U.S. is the all-electric Ioniq BEV. With a range of 124 miles, this car could meet many driver’s daily needs.  The Ioniq also boasts the highest efficiency of any electric car on the market (0.25 kWh per mile).  That means in places with cleaner electricity, this car produces emissions equal to a gasoline car rated at 100MPG or better.

Prius Prime

The 2017 Prius Prime can be plugged into any regular outlet to charge its 8.8 kwh battery pack. Photo: Toyota News Room.

This is the second version of Prius plug-in hybrid, but it’s vastly different from the previous version. While the first version could only operate in electric-only mode at low speeds, the Prime can go all-electric under most conditions.

The range has also more than doubled to 25 miles. Because it’s based on an efficient hybrid, the Prime also get exceptional gas mileage when running on gasoline at 54 MPG.

Chevy Bolt

The Chevrolet Bolt EV is the most efficient and affordable long-range EV currently available. Photo: Dave Reichmuth

The Chevy Bolt EV (easily confused with Chevy Volt) is a new all-electric hatchback that is the first EV to get over 200 miles range that is not made by Tesla. While not as efficient as the Ioniq, it is the most efficient long-range battery electric vehicle available at 0.28 kWh/mile. Because of its range, it could potentially replace more gasoline-powered trips than other EVs, leading to greater emissions reductions.

Check out these EVs, as well as all the other EV models available using our tool. We’ll continue to add EVs to our emissions tool, including the anticipated new long-range EV models from Tesla and Nissan later this year. We’ll also add the latest electricity emissions estimates, so watch this space for updates.

 

 

 

 

Two for One: A Very Bad Deal for Our Nation

Imagine you are in the market for a new car. You are excited to buy one with a new technology that will warn you of an imminent crash so you have enough time to hit the brakes to save your son’s or daughter’s life and your own. The car salesman tells you he’s got just the car for you, and it comes with his new two-for-one deal. To get that one new feature, you have to give up two others, brakes and seat belts.

You’d never take that deal, but it is exactly the kind of situation the President has created for the National Highway Traffic Safety Administration (NHTSA) and every other agency responsible for protecting American’s health and safety.

This “two-for-one” executive order, signed January 30th, 2017, requires every agency to get rid of at least two regulations for every new one they seek to put in place to help make American’s lives better off. Making matters worse, the health, safety, and other regulations that must be eliminated must at least offset the industry investment required to meet the new regulation–regardless of the benefits of the new or older regulations!

So, take my not-so-hypothetical example above. When I was NHTSA’s Acting Administrator, we put out an advanced notice of proposed rulemaking that would require new cars to come equipped with radios that would allow them to “talk” to one another, sharing basic safety information that would allow a car car to warn the driver of another equipped vehicle on a collision course. This vehicle to vehicle, V2V, communication system is estimated to prevent 425,000–524,500 crashes per year when fully implemented. Saving lives and avoiding injuries would deliver savings of $53 to $71 billion, dwarfing the investments automakers would have to make to equip vehicles with the new technology, therefore delivering positive net benefits within 3-5 years.

But under the “two-for-one” executive order, those benefits just don’t matter, the lives saved and injuries avoided just don’t matter. Instead, other regulations, like those requiring seat belts and brakes, would need to be repealed to offset the investment costs… again, ignoring the lives lost and harmed along the way. And if those two don’t cut the costs to industry enough, even more would need to be eliminated, putting even more lives at risk.

When you consider that in 2015 alone, 35,092 people lost their lives and 2.44 million people were injured in traffic crashes in the United States, it is clear that the “two-for-one” executive order is a very bad deal for our nation.

Making matters worse, this same raw deal applies to fuel economy standards that NHTSA is set to finalize for 2022-2025 to help nearly double fuel economy compared to where we were at the beginning of the decade. So, will NHTSA have to repeal safety standards to make more room to cut the high cost of our oil use? I expect they would never make that trade. I expect it would be the same for the Department of Energy (DOE), where I had the opportunity to help establish efficiency standards for household and commercial appliances. I don’t think the DOE would repeal appliance efficiency standards that are estimated to save consumers more than $2 trillion by 2030 if they had to both offset the industry investment costs of new ones and ignore the benefits of them all.

The “two-for-one” executive order is good for only one thing: grinding to a halt federal efforts to save lives, protect our health, and help us spend less money fueling our cars and heating and cooling our homes.

Appendix: Background on Regulation at NHTSA

What is EPA’s Vehicle Lab, and Why Should I Care How It’s Funded?

More details have been released about the Trump administration’s plans to cut funding to the Environmental Protection Agency (EPA).  In particular, it is nearly zeroing out the budget for the vehicles program, calling for the National Vehicle and Fuels Emission Laboratory (“Vehicle Lab”) in particular to be funded almost entirely by fees on industry “as quickly as possible” (i.e. as soon as never).  This could significantly undermine the enforcement of safeguards which protect American pocket books and public health from industry malfeasance, and it could put in jeopardy technical research that moves technology forward.

The Vehicle Lab plays a critical role in watchdogging industry

Portable emissions measurement system (PEMS) like the one used to uncover the Volkswagen scandal were developed by EPA researchers at the Vehicle Lab.

EPA’s Vehicle Lab, located in Ann Arbor, MI (Go Blue!), is responsible for certifying manufacturer compliance with its emissions standards—before any vehicle can be sold in the United States, it must be approved by the EPA.  EPA does not test every passenger vehicle model—the lab is under-resourced for such an endeavor.  Instead, it randomly selects vehicle models (about 15-20 percent annually) to assess the accuracy of manufacturers’ test results.  It also conducts its own investigations if any anomalous data is brought to its attention, e.g., by consumer groups or other advocacy organizations.

Just in the last couple of years alone, several manufacturers from across the industry have faced fines, or worse, thanks to this oversight:

Fiat-Chrysler—Its Jeep and Ram diesel vehicles are currently being investigated for violating the Clean Air Act.  While the case is ongoing, it represents an effort by EPA to step up its real-world emissions tests to ensure that vehicles are not polluting above what is legally allowed and public health is not being harmed.

Ford—For the 2013 and 2014 model years, 6 different vehicles were required to adjust the fuel economy label information provided by consumers—for one of those (the C-MAX), this was actually the second such adjustment.  This resulted in payouts to consumers of up to $1050.

Hyundai and Kia—The Korean manufacturers were found to have systematically overstated fuel economy results for over 1 million vehicles, largely the result of violating EPA’s prescribed test guidelines for determining vehicle road load.  This led to a $100 million fine and hundreds of millions of dollars in compensation for its customers.

Volkswagen—The reintroduction of diesels to its American fleet were found to come only as the result of a defeat device used to cheat the emissions tests.  Encompassing nearly 600,000 vehicles, it turns out that in the real world these vehicles emitted up to 40 times the legal limit of nitrogen oxides, a smog-forming pollutant.  Volkswagen is estimated to spend around $20 billion over the next few years in an effort to remove these polluting vehicles from the road, mitigate the excess pollution caused by these vehicles, and compensate the American people for this egregious violation.

The above issues represent a real cost to consumers, the environment, and public health and they required rigorous laboratory and on-road testing to investigate the issue.  If anything, these recent enforcement actions by EPA show the need and value of investing in even more complementary real-world testing, not less. It seems absurd to cut in half the number of staff at the lab responsible for these tests.

The Lab has also been a vital tool for transparent assessment of vehicle regulation

In addition to its important role as industry watchdog, the Lab has played a key role in assessing the technological capability of the automotive industry and providing transparency to the development of fuel economy and emissions standards.

Throughout the regulatory process, the EPA has used the capabilities of the Vehicle Lab to assess the technology landscape, publishing its results and making freely available pages upon pages of detailed technical information.  This data was used not just to test the technologies of today but to actually create, develop, and benchmark a publicly accessible full vehicle simulation model to simulate the technologies of tomorrow.  This is the type of tool previously only available to manufacturers and some well-funded institutions and, until now, well out of the budget of an organization like UCS.

This wealth of information can help inform researchers like myself and others looking to promote improvements and investments in technologies to reduce fuel use, and it provides an unparalleled level of detail and transparency for assessing the validity of regulations based on this information.

In a comprehensive report, the National Research Council of the National Academies of Science, Engineering, and Medicine noted that “the use of full vehicle simulation modeling in combination with lumped parameter modeling has improved the Agencies’ estimation of fuel economy impacts.  Increased vehicle testing has also provided input and calibration data for these models.  Similarly the use of teardown studies has improved [NHTSA and EPA’s] estimates of costs.”

Every single item lauded by the National Academies was conducted in collaboration with the researchers at the Vehicle Lab the Trump administration is now proposing to gut.

Cutting funding cuts corners, jobs and puts us at risk of a rubber stamp EPA

The current administration plan would immediately cut the number of people working at the Lab in half—that means that rather than increasing the ability for the agency to protect against the types of industry malfeasance documented above, the Lab would be stripped of its capabilities in the near-term.  This reduction in workforce would make it impossible to even maintain the bare minimum of checks and balances on the certification program, even if (big IF!) it were eventually fully funded by fees from manufacturers.

This vehicle test cell is used to measure a vehicle’s emissions in order to assess its operation under cold weather conditions. This is a necessary component to ensure that pollution levels under all driving conditions are below legal limits, and fuel usage under these conditions is part of the test procedure which determines a vehicle’s fuel economy label for consumers.

Furthermore, the fee proposal in the budget is completely inadequate to the task.  While the EPA already collects fees to reimburse the Agency, in part, for its certification activities, it is Congress which determines how the fees are appropriated—to date, Congress has not been appropriating this money to EPA, instead using these funds to offset the federal budget deficit.  There is no reason to suppose that this would change in the future, which means this proposal would effectively gut the certification process by cutting the staff responsible for the program in half.

With such a drastic staff reduction, effective immediately in 2018, the certification process will be gummed up to such a degree it will either delay sales of vehicles tremendously or become a meaningless rubber stamp which will undoubtedly lead to even more automaker malfeasance, further eroding the trust of the American people in its auto industry.

Ensuring a technically sound watchdog is of course in the interest of the auto industry as well.  It ensures everyone is playing by the same rules and that they suffer the consequences if they don’t. While engineers at other auto companies were working hard to develop emission controls for diesel cars, VW was making millions, selling so-called “clean diesels” by the hundreds of thousands.

So I hope the Alliance of Automobile Manufacturers and the Association of Global Automakers call out this farcical budget memo for what it is—a slap in the face of good governance that can only result in adverse health and environmental impacts for the American people and end up a costly mistake for the auto industry as well.

US EPA US EPA

President Trump’s Executive Orders Promise Energy Independence, But Deliver Trouble

As President Trump and the Republicans on Capitol Hill are quickly learning, developing real public policy is a lot more complicated than repeating popular slogans to excited fans on the campaign trail.  And this holds true not just for health care, but for taxes, energy, environmental and transportation policy.  Earlier this week President Trump signed an executive order, instructing agency heads to take several steps toward “promoting energy independence and economic growth.”

Energy independence and economic growth sound like good goals—just like everyone wants health care insurance with better coverage, more competition, and lower premiums.  But since the campaign is over and the work of actual policy-making is getting underway, let’s consider how the measures proposed in this executive order and other recent actions stack up against the promises.

Looking for energy independence in the wrong places

My colleague Rachel Cleetus reviewed the broad implications for the planet of President Trump’s All-Out Attack on Climate Policy. I’ll focus on the transportation specific implications.  President Trump’s executive order talks about “energy independence,” but, in reality, the Clean Power Plan that the President’s order seeks to repeal focuses on electricity generation.

Virtually none of the resources used to make electricity — coal, natural gas, nuclear and renewables — are imported.  The United States is a net exporter of coal, and imports a trivial share of its natural gas, mostly from Canada.  Wind and solar energy, meanwhile, are clean, non-depleting domestic resources.  That means that electricity is about 99 percent domestically produced.  The vast majority of our energy imports are oil and the Clean Power Plan has nothing to do with oil.  Eliminating the Clean Power Plan will have no impact on energy independence.

Historical data and projections from the Energy Information Administration’s Annual Energy Outlook 2017 show that the US does not import coal, and imports very little natural gas. Oil has been and is expected to remain the main energy import.

Oil Imports = Oil Use – Oil Production

It’s simple arithmetic, but the Trump administration seems to have forgotten that the amount of energy (mostly oil) that the United States does import depends on how much oil Americans use, less the amount the nation produces.  So, we can reduce imports by either using less oil or by producing more.  Of the two options, using less oil solves a lot of other problems; producing more causes more problems than it solves.

Cutting oil use through efficiency is the smart path to energy security

Cutting demand for oil is a long-term process, because we all have places to go and, on any given day, we don’t have an unlimited set of choices for transportation.  Over the last decade, the United States has made major progress improving the efficiency of the cars we drive.  A decade ago an average new car got about 20 miles per gallon (mpg), and that figure is 25 mpg today.  We are on the road to new cars averaging 35 mpg or more a decade from now.  This means that while a new car used 600 gallons of gas a year in 2005, a new car is using 480 gallons to drive the same distance today and this will fall to less than 350 gallons in 2025.

With similar improvements in the efficiency of big rigs, planes and other vehicles, this adds up to substantial oil savings as the current inefficient fleet is replaced by more efficient cars, trucks and planes.  Efficiency improvements don’t just help reduce oil use, they save drivers billions of dollars and reduce global warming pollution.

But that’s only if our efficiency programs are fully implemented. Instead, the Trump administration has signaled its intention to weaken our federal fuel efficiency and vehicle emission program. Weakening these standards would cost drivers more money, increase our consumption of oil and hurt energy independence, as well as increasing global warming pollution.

Every additional electric vehicle cuts oil use, energy imports, and slows climate change

Replacing a typical 2015 25 mpg car with a 35 mpg car in 2025 saves 130 gallons a year.  But replacing it with a plug-in electric vehicle cuts US oil use to zero.  And since electricity is 99 percent domestic, the impact on energy imports is dramatic.  In addition, electric vehicles are less polluting than gasoline powered cars, even when electricity generation is included, and are getting steadily cleaner over time. The smartest path to energy security, as well as a low carbon future, is to electrify transportation as quickly as possible.

US oil production increased rapidly in the last decade, so what problem are we trying to solve?

The administration claims that Obama-era policies have choked off the oil industry, but this does not square with the facts.  Domestic oil production grew 80 percent between 2005 and 2015, almost entirely because of expanded production of so-called tight oil from fracking, which now accounts for more than half of US oil production.  US oil production fell in 2016 because of low oil prices, and future domestic oil production depends mainly on the global price of oil, rather than on regulations.  Indeed oil companies’ financial statements make it clear that recent and proposed environmental regulations have “no material impact” on their business. What does matter is global energy prices.

The Energy Information Administration projects that if oil prices rise enough to bring gasoline retail prices to $5 per gallon, the U.S. may indeed become a net oil exporter as consumption falls and production rises.  But if oil prices are low, imports will rise.  If you are worried about Americans struggling to pay their fuel bills, investments in efficiency will do much more to protect them from volatile oil prices than will weakening regulations that protect the public from oil industry pollution.  And while many factors influence global oil prices, cutting demand for oil by accelerating the progress of efficiency and electrification will certainly help push oil prices down and protect consumers.

The administration’s proposals have nothing to do with responsible energy production

The term “energy independence” is never defined in the executive order, but the emptiness and cynicism with which it is used is clear.  This order, together with other recent energy related measures the administration is advancing, allow oil and gas producers to waste natural gas instead of collecting it, to weaken fuel efficiency standards, and permit construction of a pipeline that will encourage expansion of some of the dirtiest crude in the world.  These measures will harm many people and set back efforts to reduce global warming pollution.  They primarily remove energy producers’ and automakers’ obligations to consider the consequences of their actions on climate change, and they will not reduce US energy imports.

Real energy security means energy that does not harm our security (or health or economy)

Energy in many different forms is essential to our lives, but just because energy is important does not imply that energy companies should not be responsible to minimize the harms caused by the production and use of their products.  Climate change poses a profound threat to our health, prosperity and security, so meaningful energy security must include a path to climate stabilization.  Transportation recently surpassed electricity generation as the largest source of CO2 emissions in the United States, and these emissions come overwhelmingly from oil.  Cutting transportation emissions means using less oil, through improved efficiency and rapid electrification of transportation.  Transportation fuel producers also have an important role to play, and oil companies no less than biofuels or electricity producers must reduce the pollution from their operations.

Companies and countries that lead the way towards a low carbon future will have a competitive advantage as the world inevitably moves to grapple with climate change.  The winners will be vehicle manufacturers that produce the most efficient vehicles and lead the way towards electrification, and energy companies that avoid the most polluting fossil fuels and reduce avoidable emissions from their operations.  Smart policies will help American companies lead the way, but the short sighted regulatory rollback the Trump administration is pursuing will leave American industry uncompetitive.  Responsible industries understand that protecting their customers and the communities in which they operate is key to maintaining their social license. While the Trump administration is actively facilitating irresponsible behavior, the world is watching.  The future will ultimately and inevitably favor companies that live up to their responsibilities.

Savings From Fuel Economy Regulations (Already in the Billions) Keep on Ticking Up

By the time you’ve finished reading this sentence, American drivers will have saved another $4,000 in fuel costs thanks to the current fuel economy and global warming emissions regulations.  And that number will keep on ticking upwards with each new vehicle purchase, since the cars and trucks available today continue to improve in efficiency each and every year.  But it hasn’t always been this way—and the current administration seems to want to take us back.

Fuel economy has not historically improved in absence of regulation

Fuel economy regulations have been critical in moving the needle towards energy efficiency—the auto industry is historically resistant to change, pushing back on safety improvements like air bags and seat belts, resisting and circumventing requirements to reduce tailpipe pollutants, and even fighting fuel economy standards despite the tremendous benefits to their customers, the environment, and national security.  The data speaks for itself—in the years when fuel economy standards remained constant, manufacturers didn’t improve the fuel economy of their offerings, choosing instead to put technology improvements towards more power and bigger engines.

Standards have been a boon to consumers

Historically, fuel economy has only improved when standards have been tightened. (Values shown are lab test values—the “sticker” value is about 20 percent lower today.)

Research just published by the Baker Center for Public Policy shows the tremendous impact that these standards have had for consumers.  Over the lifetime of the CAFE program, it is estimated to have saved about 1.5 trillion gallons of gasoline to-date, leading to over $4 TRILLION in net savings for American drivers, even including any additional technology costs to achieve those standards.  And those savings are especially important for the most economically vulnerable populations who buy on the used car market and spend a greater share of their income on fuel—fuel economy standards are a progressive policy measure, resulting in proportionally greater benefits for poorer households.

A helpful visual to consider

To put the fuel savings from the current standards in perspective, we’ve put together a savings ticker showing how American drivers have been saving money with this program.  The program has saved tens of billions of dollars and growing with each passing second because manufacturers have had to provide consumers with more cars and trucks that are much more efficient than they were back in 2010, before the current EPA and NHTSA program took effect.

Every vehicle fueled by these standards is using less gasoline, keeping money in the hands of consumers and not oil companies, money which can be used to further drive the economy forward.  These fuel savings represent not just economic benefits but also the environmental and national security benefits of using less gasoline.

The standards are under attack

Despite the obvious benefits of these cost-effective fuel economy and global warming emissions standards, the auto industry has engaged the current administration to weaken the rules.  Thus far, the regulators have capitulated to industry’s demands—if that trend continues, we could see a rollback that could cost the American people about $100 billion, not to mention the additional use of more than 1 billion barrels of oil that will reduce our national security and result in more than 500 million metric tons of additional global warming emissions.

If you need a reminder of what’s at stake, just check out our tickerShare with your network so we can continue to tell the story of what the auto industry and this administration are threatening to take away from the American people.

California’s Opportunity to Show Leadership with Clean Cars

Today the California Air Resources Board will evaluate a midterm review of its Advanced Clean Car Program (ACC) and decide how it will move forward with standards designed to reduce global warming pollution and air quality pollutants from new vehicles.

The clean-car standards, adopted in 2012, were developed to reduce smog-causing pollutants, particulate matter, and global warming emissions in passenger cars and other vehicles through 2025. One key part of the standards, the zero-emission vehicle (ZEV) regulation, requires auto manufacturers to make an increasing number of plug-in hybrid, battery electric and fuel-cell electric vehicles available to car buyers.

California’s Advanced Clean Car (ACC) standards are working

These clean-car policies are the single biggest measure taken to reduce the state’s global warming emissions and petroleum consumption while meeting our climate goals. Among their achievements so far:

    • Since 2011, the Union of Concerned Scientists estimates the standards have avoided an estimated 13 million metric tons of carbon emissions, 1.2 billion gallons of gasoline, and $4 billion in gasoline costs.
    • More than 260,000 electric vehicles have been sold in California since 2010 and the number of models available to consumers continues to grow.
    • Electric vehicles on California’s roads today are avoiding the burning of 82 million gallons of gasoline each year and have annual fuel savings of $111 million (at 2016 gasoline and electricity prices).
    • Electric vehicles are reducing the state’s global warming emissions by 660,000 metric tons a year. An EV charged on California’s increasingly clean electricity grid has global warming emissions equivalent to a gasoline vehicle with an 87-mile-per-gallon efficiency.

Cumulative ZEV sales in California now exceed a quarter million vehicles.

In-depth review shows vehicle standards are working

The Air Resources Board (ARB) has produced a comprehensive review of the ACC program and the findings are clear: The ACC standards are effective, science-based regulations that are producing economic and public health benefits for Californians. And with technology advancing faster than expected, the current standards can be achieved with even lower costs than anticipated.

Some automakers have argued that the ZEV standards should be weakened, both in California and the other nine states that have adopted California’s ZEV standard. However, the data in ARB’s Midterm Review report fails to support any need to weaken the standard.

  • Rapid progress on EVs over the past 7 years means that automakers can now meet the standards with fewer vehicles: 1.2 million electric vehicles and about 8% of new car sales by 2025, compared to original estimates for 1.5 million and 15% of new car sales.
  • Automakers that are leaders in ZEV technology are already well ahead of targets. For example, General Motors exceeded 5% plug-in vehicle sales in California in 2015.
  • The statewide average for EV sales last year rose to 3.5%, despite some automakers like Honda that were almost completely absent from the ZEV market.
  • ZEV sales in California accelerated in 2016, rising more than 18% compared to the previous year.

Automakers have also requested looser standards in the nine states that have adopted California’s ZEV rules (sometimes termed ‘section 177 states’ after the enabling section of the Clean Air Act). However, this request is not supported by the evidence.  Instead we find:

    • The rate of EV sales in these states is lower than California. However, the current rule allows manufacturers to satisfy their requirements with little to no EV sales in these other ZEV states.
    • Some automakers have responded by not offering cars in these states, especially on the East Coast. For example, the Fiat 500e EV is only offered in California and Oregon, despite annual sales of over 5,000 in California the last three years.
    • A comprehensive study of the plug-in EV market conducted by UCS shows stark differences in the availability of EVs between California and the other ZEV states. For example, between January and June of 2016, Boston had 90 percent fewer EV listings at car dealerships than Oakland, when adjusted for relative car ownership.
    • In order for EV sales to increase outside of California, ARB should allow the 2018-2025 ZEV standards to go into effect because those rules will require ZEV sales in the other nine states. Together with California, those states comprise more than a quarter of all car sales nationally.

Many more plug-in electric vehicles are listed for sale at dealers in California than other clean car states.

Technical experts say stronger standards should be developed for beyond 2025

 To meet California’s goals for air quality improvements and global warming emissions reductions, the state’s transportation systems will need to continue to become cleaner. ARB can help ensure we stay on track by beginning to develop ACC standards for after 2025. The ACC program has been successful in ensuring that the first generation of ZEVs were deployed, and harmful emissions reduced from the entire light-duty fleet. The ARB should continue these standards as recommended through 2025 and start the hard work needed to design a strong ACC program for the post-2025 period.

 

Fact-checking the Trump Administration’s Claims about EPA’s Vehicle Standards

It’s been one week since the administration caved to auto industry lobbyists and reopened the mid-term review of the EPA’s successful vehicle efficiency standards.  In that time, there’s been a lot of hot air around what this means for the industry, so I thought I’d look into the factual basis for some of the more common assertions made around the announcement.

Scott Pruitt, Administrator of the EPA, called this action “good news for consumers”

FALSE.  To date, the vehicle efficiency standards have saved Americans more than $37 billion at the gas pump.  If the administration follows through with rolling back the standards under the mid-term review, the average new car buyer stands to lose about $1600.  Limiting consumer choice to less efficient vehicles is never good news, not for consumers or the country as a whole.

Donald Trump, President of the United States, vowed to “eliminate the industry-killing regulations”

FALSE.  There’s nothing “industry-killing” about these standards.  The auto industry has had back-to-back record-setting sales years, while at the same time exceeding the level of improvement required under EPA’s standards.  More than 300,000 automotive manufacturing jobs have been created since 2009, jobs like those General Motors highlighted last Wednesday building their new 10-speed transmission, a technology developed to meet the very same standards the administration is working now to undo.  Perhaps the President listened a bit too long to the erroneous jobs claims pitched by Mark Fields (Ford), but even a conservative analysis paid for by the auto industry shows that these regulations are good for jobs, netting about 300,000 new jobs for the economy if we move forward with the regulations as-is.

Scott Pruitt, Administrator of the EPA claimed that “CAFE standards should not be costly for automakers or American people.”

TRUE.  And they aren’t, as a rather lengthy and rigorous review already determined.  These standards are poised to save consumers money, increase jobs, and reduce oil usage without posing undue burden on industry.  Automakers may be trying to supplant facts with politics, but it is the American people who stand to lose the most with last week’s action.

Donald Trump, President of the United States, said he didn’t want “an extra thimbleful of fuel” to stop manufacturers making great cars.

Maybe this is the thimble President Trump was talking about? Of course, you could still fill at least a dozen of these with the fuel savings for even just one vehicle thanks to these regulations.  “Uniform Measure/Stack”(1997) by Stephen Cruise, in Toronto’s garment district Photo: Michael Dolan/CC BY 2.0

TWO REALLY BIG THUMBS DOWN.  Firstly, the regulations the administration is threatening to rollback are set to increase the fuel economy of new vehicles from an average of about 25 miles per gallon today to about 36 or 37 miles per gallon—that means well over 2000 fewer gallons of gas over a typical vehicle lifetime, hardly a thimbleful.  Secondly, these rules have been pushing manufacturers to innovate, leading to a greater use of lightweight materials like aluminum, transmissions with a greater spread in gear ratios, smaller turbocharged engines, stop-start systems, and many other fuel-saving technologies which can be found throughout Motor Trend’s various Car/Truck/SUV-of-the-Year winners and other such “great” vehicles.  [Also great but being driven by state policy goals—electric vehicles, which have captured three of the last seven Car-of-the-Year titles.]

Rebecca Lindland, analyst from Kelley Blue Book:  “Consumers want the most fuel efficient version of a vehicle they already want to buy.”

TRUE.  Thankfully, that’s exactly what these rules are designed to protect, that consumers can have more efficient vehicle choices in all types of vehicles year over year.

Philly Murtha, J.D. Power:  “With current lower gasoline prices and increased consumer demand for SUVs and pickup trucks, automakers are in a difficult position.”

FALSE.  Selling more SUVs and trucks actually LOWERS the fuel economy target a manufacturer needs to hit—if anything, that means selling more trucks and SUVs makes it easier for a manufacturer to meet these rules.  Ford’s most efficient F-150, which represents about 1 in 5 sold, well exceeds today’s standards—in fact, it could meet standards out to 2021-2024, depending on the specific configuration.  That means that Ford could sell nothing but that F-150 and still meet the standards for the next 5 years with no additional improvements.

Brent Snavely (Detroit Free Press) and Chris Woodyard (USA Today):  “If the review eventually results in the standards being lowered, automakers potentially wouldn’t have to make as many cars with advanced carbon emission-cutting technology like hybrids, electrics and hydrogen fuel cells in order to hit the minimums.”

PARTIALLY TRUE.  On the one hand, lower targets will certainly mean less deployment of all fuel-efficiency technologies, so that is accurate and terrible news for all. On the other hand, as we’ve noted repeatedly, these standards do not require the deployment of electric vehicles or much in the way of hybridization, so that non sequitur is a completely incorrect mischaracterization of the standards.  For example, automakers’ own data shows that they can meet the standards with improvements to conventional vehicles.

Donald Trump, President of the United States:  “I brought American auto companies to the White House.  Mary Barra is here.  Mark Fields is here.  Sergio is here, and others.  And none of them ever got to see the Oval Office before, because nobody took them into the Oval Office—our Presidents.”

¯\_(ツ)_/¯.  While it may be technically correct that neither Mary Barra nor Mark Fields have, in their short tenures as CEO, met with a sitting president at the White House, auto companies have not had any difficulty getting an audience with the past few presidents.  In fact, Sergio Marchionne probably knows this best of all, having been in extensive meetings with the Obama White House ever since his tenure as CEO began, first with the Chrysler-Fiat merger and bailout and then pursuant to the fuel economy standards to which he signed on.  Also:

(L) President Bush meets with CEOs of the Detroit Three.(R) President Obama meets with 10 automaker CEOs supportive of the fuel economy and global warming emissions standards for passenger vehicles (including Sergio Marchionne, just to his right). Photos: White House Archives/ CC BY 3.0

Bette Grande, Research Fellow at the Heartland Institute:  “The review and subsequent pullback from EPA’s CAFE standards…is a win for oil producers and mineral owners, because when consumers are free to choose the vehicles of their choice, domestic oil demand will increase.”

TRUE.  Bette is right—oil demand will increase, increasing emissions, decreasing national security, and raising prices for everyone.  Yay?

Are Electric Buses Feasible?

One of the largest transit agencies says yes

King County Metro (Seattle area) recently released a report analyzing the feasibility of transitioning its 1,400 buses to zero-emission vehicles. Metro found it can achieve a 100% battery electric bus fleet as soon as 2034 with minimal increases in expenses.

This is a MAJOR announcement from the 2nd largest bus fleet on the west coast and the 9th largest in the United States. It indicates the confidence Metro’s fleet managers have to deploy zero-emission vehicles on a large scale.

Metro’s fleet today consists mostly of diesel (34%) and diesel hybrid (53%) buses. Electric trolley buses powered by overhead wires make up the rest of the fleet (12%).

Transitioning to battery electric buses will reduce Metro’s climate impacts by 80% over the next 30 years compared to its current fleet. The report concluded this level of ambition is needed to meet the county’s goals for reducing global warming emissions and improving public health.

Electric bus technology is here and ready

Metro found that the range and charging times of today’s battery electric buses can meet the needs of 70% of its routes. Anticipated advances in technology will allow the remainder of Metro’s routes to be serviced by electric buses.

Between now and 2020, Metro will incorporate 120 electric buses into its fleet, making it a national leader in zero-emission transit. Based on technology readiness, the report recommends that all new bus purchases be zero-emission thereafter.

Metro recognizes the challenges in adopting a new technology, but it isn’t backing down. It engaged with power utilities, for example, to discover it’s possible to get the amount of power a large battery electric bus fleet would require.

Metro’s human resources department is also exploring how it can have a workforce with the right skill-set to meet the needs of an all-electric bus fleet. Improving the accessibility of jobs in the electric truck and bus industry was a major recommendation of a report we wrote with The Greenlining Institute.

But won’t this break the bank???

Nope. Metro reports the purchase price of a standard 40-foot battery electric bus is cost-competitive today if not cheaper than its current diesel hybrids. Including purchase, maintenance, and operation costs, Metro estimates a 6% increase in expenses to transition their entire fleet to zero-emission vehicles, with a range of -27% to +10%.

Including the monetary benefits of improved air and quieter neighborhoods, the overall costs of a fully zero-emission fleet are reduced to just 2%. These costs are real but often ignored on balanced sheets.

You might think the costs only work out because Washington enjoys cheap electricity, but the analysis was based on an electricity price of $0.15/kWh. This is much higher than the rate Metro pays today and was chosen in anticipation of future electricity rate structures.

Benefiting those most impacted by air pollution

Metro is prioritizing the roll out of zero-emission buses in communities that bear the greatest pollution burden – low-income and communities of color. A major part of the report centered on identifying bus routes that operate in the most polluted communities.

Metro concluded that taking cars off the road through public transit shouldn’t count in meeting its climate goals. Nor should it be able to buy its way to carbon neutrality with carbon offsets. Its principles for equity and reducing local air pollution rightfully played a large role in these recommendations.

A clean fleet powered by clean energy

Not only does Metro recommend a 100% zero-emission fleet, it also recommends these buses be powered by 100% renewable energy (including hydropower). Washington’s large hydroelectric resource gives Metro a big head start on this. In 2005, Seattle City Light, which would power 75% of Metro’s all-electric fleet, became the first carbon-neutral electric utility in the country.

But Washington isn’t unique in the carbon benefits of electric buses. We found that battery electric buses on today’s grid in California have 70% lower global warming emissions than natural gas or diesel buses.

Fuel cell buses with 33% hydrogen from renewable energy (per California law, SB 1505), have 50% lower global warming emissions than natural gas and diesel buses. And across the country, the grid is getting cleaner.

More than just clean buses

Metro has a lot of other great things going on. King County was one of the few transit agencies in the United States to see an increase in ridership last year. And it plans on increasing ridership even more, requiring its fleet to increase from 1,400 to 2,000 buses by 2040. Metro is proof that expanded service and clean buses can go hand in hand.

Metro also helps get people onto buses with discounted transit rates for low-income individuals. And it gets people out of their cars and into clean, shared rides with an electric vehicle carpool program.

I went to college in the Puget Sound region and have many friends and family in the area. It is very inspiring to see a place I love be a leader on clean vehicles and clean air.

If King County Metro’s work inspires you, contact board members on your local transit agency. Let them know zero-emission buses are ready to make your community a better place to live.

P.S. If you live in Los Angeles, tell LA Metro, the largest transit agency on the west coast, to also be a leader on zero-emission buses.

President Trump Has a Wrecking Ball (and it’s Aimed at the Climate)

The wrecking ball that is the Trump presidency is taking aim at the foundation of our country’s response to climate change. Today, the Trump Administration is announcing a re-opening of the fuel efficiency/emissions standards for cars, which can only mean one thing—weakening or repealing them. And it is expected that he will soon issue a directive to EPA to repeal the Clean Power Plan, and may also order EPA to rescind a waiver that it granted to California to set its own vehicle standards.

If the Trump administration succeeds in rolling back all three, the effect will be to increase by billions of tons the emission of global warming gases and other pollutants that endanger our health; burden our children with much higher costs of fighting climate change; cede the United States’ clean energy prominence to other countries, and make it much harder to meet the goals we set for ourselves as part of the 2015 international Paris Agreement on Climate.

We must fight this reprehensible rollback with everything we’ve got.

Global warming pollution and fuel economy standards

In 2012, the Obama Administration issued standards to cut global warming emissions and improve fuel economy for passenger cars. These standards are expected to increase the number of miles per gallon (mpg) for passenger vehicles from about 26 mpg on average today to approximately 36 mpg by 2025. (The figures are based on “real world” driving conditions, and differ from the EPA estimate of achieving approximately 54 mpg).

The first phase of these standards are in effect now, and are working. The second phase of these standards (from 2022-2025) are projected to save consumers approximately $1,500 per car (net savings), reduce oil use by over a billion barrels, and cut carbon pollution by over 500 million metric tons.

The automobile manufacturers were key architects of these standards. But now some are trying to back out of their commitment, even though they are experiencing record sales and new technologies are coming on line that will help them meet these standards more quickly and inexpensively.

Doing the bidding of these car makers, Trump has directed EPA to “reopen” the standards that govern cars built in 2021-2025. While we can’t know for sure what the outcome of this re-opening will be, we have to prepare for the worst—that the intent is to severely weaken or even repeal the standards.

Note that this cannot be achieved with the stroke of a pen. In order for EPA to do this, it must provide notice, issue a draft regulation repealing the plan, take public comment on it, and issue a final regulation. That final regulation would likely be challenged in court, and the Trump administration will have to demonstrate that there is compelling new information that justified changing course. During the rulemaking process that will follow, we must make clear to the Trump administration that these standards are working, and that Americans want lower-polluting and more fuel efficient cars. And we must loudly register our displeasure with those automakers which received massive taxpayer assistance during the last recession, agreed to build more efficient cars in return, and are now reneging on their promise.

California waiver

When the Clean Air Act was passed in the 1970s, it gave the federal government exclusive authority to regulate tailpipe emissions from cars, but it included one exception: California retained the authority to issue its own, stricter standards, provided it received a “waiver” from the EPA. Since that time, California has received approximately 50 waivers from the EPA, which have helped the state dramatically improve air quality for its residents.

As part of the 2012 agreement on joint global warming pollution and fuel economy standards, the Obama Administration worked with California to set national standards sufficient to meet the state’s greenhouse gas emission reduction needs. This avoided separate state and federal standards for reducing global warming pollution from vehicles– a goal of the auto industry.

However, California also set its own standards for deploying electric vehicles and tailpipe emission standards for gasoline and diesel to combat CA’s poor air quality – something it has done several times to protect the health of its citizens. California was granted a waiver to implement all of these standards in January 2013

Reports indicate that Trump may soon direct the EPA to rescind this waiver. The reason for this is simple: it won’t satisfy car makers to relax the EPA’s fuel economy standards while still leaving California’s standards in place.

Over the past 50 years, no EPA Administrator has ever rescinded a waiver granted to California, and there is no provision in the Clean Air Act that allows it. This radical move is not only destructive, it is hypocritical. EPA Administrator Pruitt has called himself a protector of state’s rights and pledged to give states greater latitude to address their own needs. Yet now, in one of his first moves as administrator, he is working to take away California’s right to set its own standards.

Here again, a public process is required. Rescinding this waiver directly affects not only California, but also twelve other states (NY, PA, MA, ME, NJ, CT, DE, OR, WA, VT and DC) that have adopted California’s standards (which they are allowed to do once a waiver is granted). Many of these states are counting on these standards as a means to meet climate change goals and air quality targets required by their own state laws. California and these other states can be expected to challenge the waiver rescission in court, and will have a strong argument that it is arbitrary to rescind a waiver that was granted five years ago, merely because the federal government has decided to weaken its own standards.

Clean Power Plan

In 2015, EPA issued the first-ever limits on carbon dioxide emissions from power plants—which are among the largest sources of this heat trapping gas. The plan would cut CO2 emissions by approximately 32 percent off 2005 levels by 2030 by relying on proven and effective tools, such as renewable energy, energy efficiency, switching from coal to gas, and market-based emission trading. The Clean Power Plan will ensure that all states and utilities advance together towards a cleaner energy sector. It is particularly important to have this rule in place in 2021, when tax incentives for wind and solar energy expire.

Trump’s anticipated presidential directive is likely to call on EPA to repeal this regulation. As is the case with the vehicle standards, the repeal will have to go through a formal rulemaking process. The repeal may seem like a foregone conclusion, because candidate Trump pledged to do away with the plan and Scott Pruitt, the new EPA Administrator, previously sued EPA to block it.

But participating in the public process is extremely important nonetheless. Among other things, we should demand that, if Trump abolishes the Clean Power Plan, he replace it with an alternative that achieves the same level of emission reduction. If he does not, the next step will be the courtroom. It cannot be emphasized strongly enough that EPA has a mandatory duty to address carbon pollution under the Clean Air Act, so killing Obama’s plan without a viable replacement is not only irresponsible, it is illegal.

The stakes are high

Over the past eight years, the United States has become a clean energy leader. We’ve accomplished a massive expansion of wind energy in the great plains, solar in the southwest and southeast, breakthrough battery technologies making electric cars better (and soon less expensive) than their gasoline-fired counterparts, switched to LED lightbulbs, and implemented a wide array of building materials and techniques to cut energy use. With these powerful changes, our country has risen to the challenges posed by climate change while creating millions of jobs in the process.

Some of this progress will continue no matter what the Trump administration does. But Trump’s anticipated three-way rollback will slow this progress down, probably significantly.

To get a glimpse of how high the stakes are, the graph below depicts estimated energy sector CO2 emissions. We focus on the year 2030, when both the Clean Power Plan and the fuel economy standards would be in full effect.

The graph shows that repealing the Clean Power Plan and the fuel economy standards (nationwide and for California) will increase energy-related emissions in 2030 by 439 million metric tons, or approximately 9%.

Cumulative through 2030, the repeal will increase emissions by 2.5 billion metric tons. The graph also shows that without these two policies, energy related emissions will actually increase overall from current levels. Yet under the Paris Agreement that we signed in 2015, we pledged to decrease emissions on an ongoing basis, based on the overwhelming scientific consensus that we are running out of time to cut emissions of greenhouse gases. By taking off the table these emission reductions, the Trump administration makes meeting these goals much more difficult, and transfers to the next generation the burden of billions of tons of carbon-cutting from one generation to the next.

It is a travesty that the Trump administration seeks to undo the progress we’ve made, but it is not surprising. Candidate Trump called global warming a “hoax.” He picked Scott Pruitt to head EPA due to Pruitt’s legal expertise in obstructing EPA with litigation, and Mr. Pruitt has now gone on record saying that he does not believe carbon dioxide emissions are a primary cause of climate change. And he seems to think that virtually all government regulations are detrimental, blind to the positive economic and environmental changes they can achieve.

Any false hope that President Trump might moderate some of his more radical rhetoric once in office must now be laid aside. We can see the wrecking ball and the direction it is swinging. And we must stop it before it is too late.

Photo: Rhys A/CC BY (Flickr)

EPA Pulls Back Sound Policy Judgment at Behest of Auto Industry

Today, EPA Administrator Scott Pruitt rescinded the determination that the EPA standards for 2022-2025 are appropriate.  This decision was made at the request of automakers seeking to supplant more than four years of robust, technical analysis with a political request from industry–a spokesperson for the administration even noted on a press call regarding the announcement that automaker complaints had been taken at face value with no additional analysis or verification, despite the tremendous body of evidence EPA has already put forth supporting the determination.  This decision could have major implications not just for our climate, but for consumers, thanks to an administration willing to bend over backwards for industry.

What does this mean?

This step backwards is the first necessary for the administration to weaken the fuel economy and global warming emissions standards set for 2022-2025 way back in 2012.  These standards were reaffirmed by the previous EPA Administrator Gina McCarthy in January based on the breadth of data, which showed that manufacturers could continue to meet the standards on the books and that moving forward with the standards on the books would provide tremendous benefits to the American public.  While a stroke of a pen may be able to undo this determination, it cannot undo the significant body of evidence underpinning this well-justified determination.

It’s industry’s word versus a mountain of independent, peer-reviewed data

As I wrote in January, the determination that EPA’s 2022-2025 standards were appropriate was based upon a mountain of evidence.  The agency spent tens of millions of dollars on research and analysis, including vehicle testing and simulation that resulted in at least 20 peer-reviewed publications; studies on consumer acceptance of technology and willingness to pay for it which contradicts automaker assertions that the public doesn’t want fuel-efficient vehicles; and updated assessments of technology costs by an outside consultant that looked at how a given technology would impact the parts and engineering costs of other parts of the car, including some of the innovative technologies that weren’t originally anticipated back in 2012.

In addition to this massive amount of work accounted for by EPA, the Department of Transportation (DOT) added its own heap of analysis, including independent assessments of the costs to achieve the standards and the ability for future combustion engine and vehicle technologies to meet the 2025 standards as well as a DOT-funded comprehensive assessment by the National Academies of Science, Engineering, and Medicine.  DOT’s findings were published jointly with EPA in the Draft Technical Assessment Report last summer and said quite clearly that manufacturers could meet the finalized 2025 standards through the deployment of conventional technologies and at a lower cost than originally anticipated.

A further part of the process, of course, came from publicly submitted analyses.  Groups like the International Council on Clean Transportation, the Environmental Defense Fund, and of course the Union of Concerned Scientists augmented the agencies’ research with independent analysis which generally showed that the agencies’ own estimates of technology improvements were consistently conservative.  In fact, automakers could exceed standards set out to 2025 through the deployment of improved conventional gasoline-powered vehicles.  Additional independent research showed how fuel economy standards disproportionately benefit lower income individuals, who tend to purchase cars on the secondary market and for whom fuel costs are a much larger share of income, underscoring the critical importance of these standards in protecting these families from fuel price volatility while saving them up to 2 percent of their annual income since fuel economy standards first went into effect.  Consumer groups as well have pointed to the positive impacts these standards have on all Americans, with thousands of dollars in net savings over the lifetimes of these vehicles that begin the moment the typical new car buyer drives off the lot putting much needed income back in the hands of consumers.

Industry continues to cry ‘wolf’

Standing in opposition to this large body of evidence is the voice of industry, claiming absurd assertions about jobs and cherry-picking data because even studies they paid for don’t support their ridiculous claims.  A recent automaker-funded study even noted that in spite of their own conservative assumptions, these rules are, in fact, job creators.  Of course, this industry fighting progress is nothing new—automakers have tried stunts like this previously. Automakers have claimed amongst other things that reducing tailpipe pollution under the Clean Air Act “could prevent continued production of automobiles” and “do irreparable damage to the American economy;” they have also fought safety features like seat belts and air bags for decades while waging what the Supreme Court called “the regulatory equivalent of war” claiming among other things that such features would lead to decreases in sales.

[Spoiler alert: None of that happened, and now you can breathe a lot easier and have a much safer automobile because regulators didn’t kowtow to industry demands.]

On top of this, they are also claiming that the EPA “rushed to judgment” in its determination, forgetting apparently the four-plus years of analysis and the numerous detailed, daylong technical meetings held by the EPA both with individual automakers and their trade associations, in addition to pages upon pages of industry-submitted analysis which the EPA carefully considered and to which the agency responded to before finalizing its determination.  Contrary to their claims, the automakers aren’t upset about the process—they’re upset about the outcome.  And now they’re looking to bend the ear of an Administration generally opposed to regulation to, once again, fight regulations that result in tremendous public good.

By itself this signature does little, but it portends bad intentions

Rescinding the final determination at the request of the auto industry flies in the face of good, technically sound policymaking; however, it is not in and of itself a binding change in policy.  At least for now, the 2022-2025 standards limiting global warming emissions from passenger vehicles remain on the books.  Unfortunately, this action signals a strong likelihood that this administration will not follow the evidence but will simply cave to industry demands—after all, it took less than a month for Scott Pruitt to overrule a decision built on four-plus years of data just because the auto industry asked.

Any change in these regulations will require a formal rulemaking process—and we at UCS will fight like hell to make sure any such rule continues to build upon the strong, technical foundation that led to the regulations on the books today.

The Consequences of Connecticut’s Tesla Ban

At Tesla’s facility in Greenwich, Connecticut, you can take a look at Tesla cars. You can talk to representatives about electric vehicle technology, and learn how to install charging equipment. You can buy swag featuring the Tesla logo.

But you cannot buy a car. You cannot test drive a car. You cannot talk to a Tesla representative about pricing or financing. You cannot have your car serviced.

This is not a Tesla store.

Tesla’s Greenwich facility, you see, is an “educational gallery,” and not a store. It has to be an educational gallery, because Tesla is legally prohibited from operating a Tesla store in Connecticut. This is due to Connecticut’s dealer franchise laws that require all cars to be sold by independently licensed dealers rather than manufacturers.

If you are a Connecticut resident and you want to buy a Tesla, the first step is to go online. Through Tesla’s web site you can order a car and put down a deposit. The car is then delivered to the nearest store; for most Connecticut consumers, that means a store in White Plains or Westchester County, New York. Customers must then travel to New York where a sales representative can complete the sale.

As this is officially a New York transaction, sales of Teslas to Connecticut residents thus create New York jobs, require payment of New York sales tax, and contribute to the New York economy.

Connecticut’s dealer franchise laws are a major impediment, not only to Tesla, but to other companies that are looking to sell electric vehicles independent of the traditional dealership model, including Elio and BYD. In this post, I want to look at the arguments raised for and against these dealer franchise laws. In particular:

  • What is the justification for laws banning Tesla stores?
  • Do dealer franchise laws benefit consumers?

Spoiler alert: the arguments raised in support of banning direct manufacturer sales are poor.

What is the justification for laws banning Tesla stores?

As I discussed in my last blog post, the ban on Tesla sales is an unintended consequence of laws originally designed to protect auto dealers from unfair competition with automobile manufacturers.

Perhaps recognizing that the protection of car dealerships is not the strongest foundation to build broad public support for your policy, in recent years auto dealers have reinterpreted dealer franchise laws—laws that were explicitly passed to protect dealers—as intended to protect consumers.

The National Automobile Dealers Association for example, defends dealer franchise laws by citing a long list of ways in which consumers benefit from the dealer franchise system. Independent auto dealers create more cutthroat price competition than you’d have in a system dominated by manufacturers. Independent auto dealers are more likely to stick around and be able to service vehicle models even if the manufacturer closes down.

This reading of the law makes little sense.

By its very nature, the prohibition on direct manufacturer sales is a restriction on consumer choice—dealer franchise laws take away the option of a consumer purchasing directly from a manufacturer. If consumers prefer to buy cars from independent dealers, then there is no need for a law to force consumers to do so. The question is whether consumers should be allowed to do anything else. Indeed, all around the world independent dealerships continue to thrive in jurisdictions without laws banning direct sales by manufacturers.

Another problem with NADA’s argument: most independent economists believe that dealer franchise laws impose costs on consumers to the benefit of dealers.

Do dealer franchise laws benefit consumers?

Dealer franchise laws belong to a category of occupational licensing regulations that have been the subject of withering criticism over the past few decades by social scientists, including economists and public choice theorists, such as the recently departed Kenneth Arrow. At their best, occupational licenses act as a way of ensuring that businesses meet reasonable quality and safety standards. At their worst, occupational licensing can by captured by special interest groups and turned into an artificial barrier to entry for new businesses, stifling innovation and rewarding entrenched interests.

A recent open letter from 70 major economists to New Jersey Governor Chris Christie on this issue stated the mainstream economic position bluntly:

There is no justification on any rational economic or public policy grounds for such a restraint of commerce. Rather, the upshot of the regulation is to reduce competition in New Jersey’s automobile market for the benefit of auto dealers and to the detriment of its consumers. It is protectionism for auto dealers, pure and simple. . . . In sum, we have not heard a single argument for a direct distribution ban that makes any sense. To the contrary, these arguments simply bolster our belief that the regulations in question are motivated by economic protectionism that favors dealers at the expense of consumers and innovative technologies.

Independent studies that have looked at the economic impacts of dealer franchise laws generally show that by restricting new distribution methods, these laws impose costs on consumers; one study shows that they increase average vehicle costs by 8.6 percent, or $2,225 per vehicle. For all these reasons, the Federal Trade Commission, along with most independent consumer organizations, including Consumer Federation of America and Consumers for Auto Reliability and Safety support allowing direct sales from manufacturers.

Connecticut should lift the ban on direct manufacturer sales for EVs

Unless you are an independent auto dealer yourself, there is simply no good reason for Connecticut to continue to prohibit Tesla from operating in the state.

The dealer franchise laws that ban direct manufacturer sales are antiquated laws designed to deal with economic circumstances that are not relevant to Tesla. The primary economic impact of these laws is to enrich dealers at the expense of consumers. The Tesla ban acts as an unnecessary impediment to achieving the state’s goals for vehicle electrification and pollution. And the most immediate practical impact of dealer franchise laws is to frustrate and irritate Connecticut residents, while depriving the state of economic activity and tax revenue.

This law should be changed.

Why You Can’t Buy a Tesla in Connecticut (and 5 Other States)

The state of Connecticut is a progressive state, with a strong track record of support for laws and policies that will reduce global warming emissions and a goal of putting over 150,000 electric vehicles on the road by 2025.

Given the policy commitments of the state of Connecticut, one might assume that Connecticut would be a place that would welcome an innovative, important business like Tesla, the largest manufacturer of electric vehicles in the United States. And given the significant fiscal challenges that Connecticut faces, one might think that Connecticut would be excited to see Tesla operate new stores within the state, bringing jobs and tax revenue.

But in fact, Tesla is legally prohibited from operating its Tesla stores in Connecticut.

Under Connecticut’s dealer franchise law, and under the law of many states throughout the country, automobiles may only be purchased through independent car dealerships. Tesla’s cars are sold directly from the manufacturer, which mean that Tesla stores are not welcome in Connecticut.

The problems that Tesla has faced with automotive dealers and state dealer franchise laws represent a combination of unintended consequences, special interest influence, and the challenges of developing new technologies in marketplaces dominated by entrenched interests and outdated laws. The Tesla wars are also a part of a broader story of how changes in technology are impacting laws and regulations governing transportation in the United States.

In this blog post, I want to explore some of the key questions raised by the battle over Tesla. In particular:

  • Why do we have dealer franchise laws?
  • Why doesn’t Tesla sell their cars through franchised dealers?
  • Why do some states allow Tesla stores and others do not? (Hint: it depends on the meaning of ‘its’).

In part 2 of this post, I will look at some of the policy arguments that have been made by auto dealers, by Tesla and by economists on dealer franchise laws.

  • What is the justification for laws banning Tesla stores?
  • What does the evidence suggest about dealer franchise laws?
  • What are the consequences of Connecticut’s ban on Tesla stores?
Why do we have dealer franchise laws?

The car dealership model as we know it today arose in the 1920s and 1930s, as first General Motors, and then eventually all of the “Big Three” American automakers chose to license the rights to sell their cars to independent dealers, rather than selling the cars directly to consumers.

The independent dealership model worked because it allowed both parties to focus on core competencies: the manufacturers could focus on making the best cars possible, while independent dealers made the inroads into local communities that allowed them to most efficiently sell the cars directly to consumers.

From the beginning, one challenge in the independent dealership model is the obvious power imbalance between the “Big Three” automakers who dominated automobile manufacturing, and the thousands of independent dealerships that were licensed to sell their vehicles. Stories abounded of auto manufacturers exploiting their superior market position to gain unfair advantages on independent dealers. For example, manufacturers could force independent dealers to purchase cars that they didn’t want as a condition of maintaining their relationship, or terminate the franchise relationship at will without cause, or coerce profitable dealerships into selling their business at below-market rates.

Beginning in the 1930s and accelerating greatly in the 1950s, legislatures in all 50 states passed a series of laws, known collectively as dealer franchise laws, which were intended to protect independent dealers from abusive practices at the hands of vehicle manufacturers. Among other things, these laws prohibited the Big Three from owning licensed dealerships themselves, or selling cars directly to consumers.

The prohibition on direct manufacturer sales was intended to protect independent auto dealers from unfair competition from their own manufacturers. The classic concern addressed by the ban on direct sales from manufacturers is the independent car dealer who spends money, time and effort building a market for, say, Ford vehicles in a certain town, only to have Ford Motor company jump in and open up a rival direct from manufacturer store that undercuts the independent dealer on price and takes his market share.

By the 1950s when most of these laws were passed, the independent dealer model was so entrenched in the American car market that it was simply presumed that all auto manufacturers would have independent dealerships selling their cars, and that any direct manufacturer sales would necessarily be in competition with an independent dealership. Dealer franchise laws therefore did not contemplate the challenge posed by a company like Tesla, a company that refuses to sell its cars to independent dealerships at all and instead insists that all sales must be direct from the manufacturer itself.

Why doesn’t Tesla distribute through franchised dealers?

Tesla has adopted this policy because they believe that the traditional independent dealership model does not work for electric vehicles. According to Tesla CEO Elon Musk:

Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars. It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business. This would leave the electric car without a fair opportunity to make its case to an unfamiliar public.

Tesla points to the failure of Fisker and Coda as examples of electric vehicle start-up companies that failed because of their reliance on independent dealerships to sell a new technology. In addition, Tesla argues that because electric vehicles have lower maintenance costs than traditional cars, independent dealerships that make money off of service will always have an incentive to steer consumers away from electric vehicles. Tesla offers service for all of their vehicles for free.

Recent studies confirm that, with a few exceptions, most auto dealers in the Northeast are not making enough of an effort to sell electric vehicles. Between January and June of 2016, dealers in the Bridgeport to New York City metro area had 90 percent fewer EVs listed for sale than Oakland, when adjusted for relative car ownership. A recent report by the Sierra Club found that Tesla stores provide EV customers with far superior service, as Tesla was more likely to have EVs available to test drive, more likely to be knowledgeable about state and local incentives, and more likely to be able to correctly answer technical questions about charging EVs, than traditional car dealerships.

A Tesla store looks and feels more like an Apple store than a car dealership. They are placed in high volume, high traffic areas such as shopping malls. They have almost no inventory, as Tesla cars must be ordered individually from the manufacturer rather than sold on site. There is no haggling over price. And Tesla stores sell only Tesla products, including cars and batteries; with the recent merger with SolarCity, Tesla stores will soon sell solar panels as well.

Why do some states allow Tesla stores and others do not?

Over the past few years, courts and legislatures across the country have struggled with the question of whether and how to apply dealer franchise laws to Tesla stores. Some state courts, including Massachusetts and New York, have found that dealer franchise laws are only intended to apply to manufacturers that have licensed independent dealers, and do not provide a cause of action against Tesla stores. Other states, including New Hampshire and Maryland, have recently changed its law to permit Tesla stores through legislation.

States that currently ban Tesla stores include Texas, West Virginia, Utah and Arizona, in addition to Connecticut. Some states, including Virginia and Indiana, allow a limited number of Tesla stores. New Jersey proposed a regulation that would have banned Tesla stores in 2015, but then relented last year, amending the regulation to allow 4 stores in New Jersey.

Often the difference between a jurisdiction that permits Tesla stores and a jurisdiction that bans Tesla stores comes down to minute differences in statutory language. For example, until 2014 Michigan’s dealer franchise law prohibited auto manufacturers from “[selling] any new motor vehicle directly to a retail customer other than through its franchised dealer.”

The word “its” in the statute arguably suggests that the law only applies to manufacturers that have franchised dealers, and thus does not prohibit Tesla stores. But then a legislator allied to the auto industry slipped a provision into an unrelated piece of legislation removing the word “its” from the statute, and just like that, Tesla stores were banned in Michigan.

Beyond narrow questions of statutory interpretation, judges and legislators wrestling with these questions need to consider the purpose of dealer franchise laws. Are these laws meant to regulate a relationship that arose within the context of the independent dealer system? Or are these laws intended to mandate that the independent dealer system must be the only way automobiles are sold in the United States forever? If it is the latter, then the dealer franchise laws represent not only a ban on Tesla, but a ban on all innovation in distribution methods.

Can such a ban be justified? In part 2 of this post, I’ll explore some of the policy consequences of dealer franchise laws and the Tesla ban, for consumers, and for Connecticut.

How to Ensure Self-Driving Vehicles Don’t Ruin Everything

Zipcar’s former CEO has cast the self-driving future as a “heaven or hell” scenario, and she has a point. Self-driving cars could save lives, smooth traffic congestion, expand access to jobs or schools—especially for people who can’t drive themselves today—and reduce the number of vehicles on our roads. On the other hand, they could worsen smog and local air quality pollution, disrupt the US economy by putting millions of people out of work, justify cuts in public transit funding and services, and force urban planners to focus more on providing space for vehicles instead of for parks, bicyclists, or pedestrians.

To maximize the potential benefits of self-driving vehicles and minimize their potential consequences, UCS developed this set of principles that we will be pushing policymakers, businesses, and other stakeholders to follow. Doing so will ensure that self-driving vehicles reduce oil consumption and global warming emissions, protect public health, and enhance mobility for everyone.

Science-based policy will be key for shaping the introduction of self-driving technology

Many are rallying against any regulation of self-driving technology beyond ensuring it’s safe to use. I’ve even heard the claim that over regulating this technology will literally kill people by slowing the speed at which self-driving cars are introduced, thus delaying their potential safety benefits.

To be fair, this argument has merit. Self-driving vehicles are forecast to reduce the tens of thousands roadway fatalities that occur each year in the US by as much as 90 percent, and can offset the rise of distracted driving that may have caused the biggest spike in traffic deaths in 50 years (though reaching these improved safety levels will take further advances in the technology and widespread deployment).

But, self-driving technology won’t just impact transportation safety. Researchers are forecasting how it will affect traffic congestion, vehicle-related emissions, land-use decisions, public transit systems, data security, and the economy. Unfortunately, the emphasis that many, including the US Department of Transportation, have placed on the safety benefits can be distracting from the need to consider how policy should address the other equally great potential impacts of self-driving technology.

I’m not saying self-driving technology should be regulated to the scrapheap. The technology is highly likely to improve traffic safety and increase access to transportation—both important outcomes. Yet self-driving vehicles will need to be regulated on issues other than safety, as their full breadth of potential impacts won’t be addressed by safety-focused policy or market forces alone.

For example, studies have found that self-driving vehicles could double transportation emissions (already the largest source of climate change emissions in the US), place millions Americans out of work as automated driving replaces truckers and taxi drivers, and/or exacerbate urban sprawl.

The jackpot for winning the race to produce the best self-driving vehicle can still be won even if these negative affects are suffered, and today’s policy frameworks may be insufficient to effectively curtail these future impacts. Let’s not forget that automakers have historically been against regulation (see: seat belts, fuel economy, air bags) and are encouraging policymakers to clear the way for self-driving vehicles not only because they seek to improve transportation safety, but because they see a potential to make a profit.

So science-based policy covering the broader implications of self-driving cars, including how they affect emissions and our economy, will be needed to ensure the best possible self-driving future and these discussions need to happen today. To kickstart these conversations, UCS released these principles that will create a safe, healthy, and equitable autonomous future. Join the conversation on whether and how self-driving technology should be regulated by checking out our new self-driving vehicle web content and signing up for future action alerts here.

What is Oil Used For? What the Super Bowl Commercial Didn’t Tell You…

A commercial during yesterday’s Super Bowl about oil may have given you pause.

Besides the sports car (about to go off-roading), the commercial was about things you probably don’t associate with oil. Like graffiti; makeup; prosthetics; a heart; and outer space.

Is oil really diversifying? Or is this ad just a marketing ploy?

Looking at data from the U.S. Energy Information Administration, it is pretty clear that oil and natural gas are still being used overwhelmingly for what they have always been used for—combustion, whether in vehicles or power plants.

The American Petroleum Institute (API) ran the commercial in question. API is the largest oil trade association in the United States. Member companies include BP, ConocoPhillips, Chevron, ExxonMobil, and Shell. You may have heard of API for their role in a concerted campaign to spread denial about climate change. They merged with America’s Natural Gas Alliance last fall, so it now lobbies for both oil and natural gas interests. This merger came about because major oil companies now have large natural gas assets.

As a chemist, I know that many consumable products like asphalt, paint, and plastics have oil or natural gas as a precursor ingredient. And while these products have many positive impacts in society, they are absolutely tiny fractions of the oil and gas industry and should not be used to justify the bulk of their business. Over 90% of oil and gas is used for combustion, either in power plants or vehicles.

Let’s not discount the many benefits energy provides society

But while coal, oil, and natural gas have been our primary sources of energy for many decades, we will not rely on them in the future. We are moving to a world that gets most of our energy from clean, renewable resources like wind and solar. This is in large part because the cleanest sources of energy are becoming the cheapest. Our cars and trucks can plug into that clean grid for their future fueling needs.

There are many chemists exploring ways to make plastics etc. from non-petroleum resources such as plants. This is great work (and tough chemistry) that will lead to a more sustainable world. But if we are going to stop the worst effects of global warming and clean our air, we must remember the most obvious effects oil and natural gas are having on our communities and our world.

We have solutions

While oil may currently play a role in making paint, plastics, or rocket fuel, it doesn’t “gush art,” “pump life,” or “explore space”–that would be artists, doctors, and scientists. And it is artists painting a picture of environmental justice; doctors treating patients suffering from asthma; and scientists discovering clean energy solutions.

Massachusetts Moves to Limit Pollution from Transportation: 5 Things you Should Know

The state of Massachusetts has been an important leader in the fight to protect our climate from global warming. But there’s one area where Massachusetts continues to struggle: controlling pollution from transportation. New limits on transportation emissions now under consideration by the Massachusetts Department of Environmental Protection (DEP) could determine whether the Commonwealth can stay track to achieve our climate mandates, or whether transportation emissions will undermine the progress the state has been able to make building a clean energy future.

Clean Vehicles, CV

Transportation and the Global Warming Solution Act

The Bay State has passed one of the strongest climate laws in the country, the Global Warming Solutions Act (GWSA), which requires the state to reduce emissions throughout our economy by at least 80 percent of 1990 levels by 2050. Massachusetts also leads the nation in energy efficiency, and last year, passed an energy bill that will see the largest ever procurement of offshore wind in the United States.

Massachusetts has been able to make significant progress on these issues because the people of the Commonwealth care a lot about climate, because our state is uniquely threatened by the impacts of sea level rise and other climate change impacts, and because our state boasts a proud bipartisan tradition of leadership on climate and energy.

But transportation has been a challenge for Massachusetts. Pollution from our cars and trucks is the largest source of emissions in the state, and it’s the one area of our economy where emissions have actually grown since 1990, as increased total driving in the state has outpaced gains in fuel efficiency:

Achieving significant reductions in transportation emissions basically boils down to using a lot less oil. The good news is that we know how to do this! More efficient cars, cleaner fuels, electric vehicles, and a transportation system that gets us where we need to go without spending so much time behind the wheel, can all help cut pollution from transportation.

Kain v. Department of Environmental Protection

This week, Massachusetts will take an important step towards tackling the pollution from transportation, as the state’s Department of Environmental Protection (DEP) considers new limits on emissions in the sector.

These proposed regulations are in response to last year’s landmark decision in Kain v. Department of Environmental Protection, in which the Massachusetts Supreme Judicial Court ordered the state needs to set mandatory and enforceable limits on the total mass of pollution emitted within the state from different sources, including transportation. These proposed regulations represent DEP’s response to the Kain decision. So how did the DEP do? Here’s what you need to know:

#1: DEP is proposing to limit most, but not all, emissions in the transportation sector.

The proposed DEP regulation covers the “surface transportation system” within Massachusetts, which means emissions that come from passenger vehicles, light and heavy duty trucks, and transit systems. The new regulations do not cover aviation or marine transportation. All told, that means that approximately 85 percent of Massachusetts transportation emissions are covered by this regulation.

Leaving aviation and marine travel out of the current regulation may make sense, given that these areas present different administrative challenges. In the long run, however, Massachusetts will need to make progress in these areas as well, and the state should consider additional regulations that will establish limits on boats and airplanes.

#2: The proposed limits are ambitious.

Overall the state is proposing to cut emissions in the transportation sector by approximately 1.87 percent per year for each of the three years covered by this regulation (2018, 2019 and 2020). That’s pretty challenging! Massachusetts has not been able to achieve a 1.87 percent reduction in transportation emissions for three consecutive years since 1990-1993, 25 years ago.

But, while ambitious, a 1.87 percent linear decline isn’t quite enough to achieve our long-term climate goals. Overall, the DEP proposal would put the state on track to achieve a 35% reduction by 2030 and a 57% reduction by 2050. So while these regulations represent an ambitious effort to begin to get transportation emissions under control, we’ll need to accelerate progress over the coming years to achieve our climate mandates.

#3: Achieving these limits will require additional policies.

The two biggest challenges with this regulation are: it isn’t clear how we are going to achieve these limits, and it’s not clear what happens if we fail to achieve them.

Right now, Massachusetts is relying heavily on federal and regional policies to reduce emissions in transportation. In fact, 93 percent of the projected emission reductions in the state’s most recent Clean Energy and Climate Protection plan come from National Greenhouse Gas and Fuel Economy Standards that, if fully implemented, will approximately double the fuel efficiency of new vehicles by 2025. These standards are now very much under threat from a combination of automaker intransigence and the current administration in Washington.

The new federal administration means that Massachusetts and other states are probably on our own when it comes to achieving our climate limits.  Massachusetts needs to think big about new policies that will help our residents and businesses drive less or purchase cleaner vehicles. Aside from reducing emissions in state fleets, the DEP is not yet proposing new policies to achieve the limits that they lay out in this regulation. But they are going to have to if they want to be successful.

#4: It’s not clear how these regulations will be enforced.

What happens if we go over our limit? The regulations are not clear on this very important point.

The most straightforward way to make the limits on transportation emissions enforceable is through a requirement that polluters purchase allowances from a limited pool (or cap). This market-based approach would build on the successful model of the Regional Greenhouse Gas Initiative, which has been really effective in reducing emissions while promoting economic growth in the electricity sector. RGGI is also an important source of funding for Massachusetts’ clean energy and efficiency programs. A market-based approach to ensuring emission reductions is explicitly authorized by Section 7 of the GWSA.

Without some kind of mechanism to ensure that the state actually achieves the reductions, this regulation will not be the kind of mandatory and enforceable limits required by the Supreme Judicial Court.

#5: Achieving long-term reductions in the transportation sector will require regulations that extend past 2020.

One major challenge facing DEP throughout this whole process is that the GWSA regulations that they are in charge of implementing sunset by statute in 2021. Achieving short-term reductions is challenging in the transportation sector, as vehicles, community development patterns, and transportation infrastructure investments all change slowly.

A more sensible approach would be for the state to establish limits through 2030. Several proposals in the Massachusetts legislature would eliminate the 2020 sunset and allow DEP to consider limits on a longer time horizon.

Working together, both parties and all three branches of government in Massachusetts have made significant progress reducing emissions from electricity generation and increasing the efficiency of our homes. Massachusetts’ policies to promote solar energy, for example, have allowed the technology to explode into the mainstream, providing thousands of Massachusetts residents with affordable zero-emission energy. With the growth of new technologies such as electric vehicles, new transportation systems such as car sharing, and ever-increasing use of public transportation and cycling in the Bay State, we have more options then ever before to promote clean transportation. It is time for policy leaders in Massachusetts to bring the same urgency and focus that has lead to so much success in the electric sector to the task of reducing pollution from transportation.

 

What’s Congress Doing to our Methane Waste Regulations?

Yesterday I spoke at a forum in the Capitol on the Bureau of Land Management’s Methane Waste Rule, an event organized by Democratic members of the House Natural Resources Committee. I offered testimony on a panel of experts including a former BLM official involved in developing the rule, a nurse speaking about the public health benefits of the rule, a scientist from Clean Air Task Force who discussed the Colorado rules on which parts of the BLM rule were modeled, and a pastor who talked about the moral imperative to use natural resources responsibly, and limit the harms caused by climate change.

I joined a panel of experts testifying on the BLM methane waste rule (I am wearing a red tie).

Four democratic Representatives asked questions and made statements. These included Congressman Grijalva from Arizona, who is the ranking member on the Committee for Natural Resources, along with Congressman Huffman (CA), Congressman Lowenthal (CA), and Congressman McEachin (VA).

Representatives (from left to right) Lowenthal, Huffman, Grijalva, and McEachin

Republicans are threatening to eliminate the BLM Methane regulation using an obscure, radical, and rarely used congressional trick called the Congressional Review Act (CRA).

The CRA allows Congress, with a simple majority, to completely revoke any rules made in the last 6 months of the Obama administration. It is a blunt tool that would revoke regulations that went through extensive stakeholder review, used evidence-based science, had public notice and comment, and took a few years on average to be finalized.

In addition, it stipulates that any rule that is similar to the rule can NEVER be done again, unless Congress gives explicit permission–thus salting the earth.

The BLM methane regulation updates rules issued in the Carter administration governing how oil and gas are produced on Federal and tribal land. The new rules will reduce leaks, venting, and flaring of natural gas, which not only wastes a resource that belongs to the American people, but also turns it into a health and climate hazard.

Apparently, the oil industry likes the 1979 vintage rules better, and the new Congress is rushing to do their bidding, quickly moving to revoke a rule that was three years in the making. But rolling back the regulatory clock to 1979 would be as dumb as removing requirements for airbags and anti-lock brakes from modern cars.

A lot has changed in the last 38 years, including the rise of fracking and the associated methane pollution from tight oil production. Rapidly reducing methane pollution–the leading non-CO2 pollutant responsible for climate change–is more urgent than ever before.

The last decades have also seen new technologies to measure, manage and utilize natural resources responsibly. An up-to-date regulatory framework for the oil and gas industry is essential to holding a massively polluting industry accountable.

The CRA is touted as a tool to exert control over unauthorized, unnecessary, or unreasonable agency regulation, but the methane and waste prevention rule is clearly authorized, necessary and reasonable.

Former Counselor to the Director of the Bureau of Land Management Alexandra Teitz explains in her testimony that BLM is required by law to prevent waste and ensure that resource extraction on public lands is conducted in a safe and responsible manner. The Government Accountability Office (GAO) estimated that State and Federal taxpayers are losing as much as $23 million per year in royalty revenue due to this waste, and GAO found that the BLM needed to update its rules to address this waste.

The BLM worked on these rules for three years, holding numerous hearings around the country. They received more than 300,000 public comments and made changes to the final regulation based on this feedback. As Dr. David McCabe, Senior Scientist at the Clean Air Task Force explained in his testimony, the waste rule was modeled on policies already implemented in Colorado, Wyoming and North Dakota.

As these states’ experience shows, sensible up-to-date standards work to cut pollution and waste, and their requirements are easily implemented. These rules are not going to stop the oil industry from drilling for oil and gas; they just set reasonable standards of performance that reflect the current best practices modeled in states.

Responsible industries recognize that an up-to-date regulatory framework is necessary to protect the public and ensure that irresponsible actions by a few bad actors do not tarnish the whole industry. Cars, trucks and even appliances are subject to numerous standards that ensure that as technology changes, so do requirements for safety, pollution and efficiency.

The history of oil and gas extraction is filled with egregious examples illustrating the need for strong regulations to protect the public, and it is especially obvious that oil companies operating on public lands, who are extracting resources that belong to the American people, should be held to reasonable standards to avoid waste and unnecessary pollution.

The same day I was speaking to House Democrats, Former ExxonMobil CEO Rex Tillerson was being narrowly confirmed as Secretary of State and Jack Gerard of the American Petroleum Institute was speaking at a hearing on regulations in the Senate.

Under cover of the maelstrom that is DC this last couple weeks, Mr. Gerard invented some alternative facts and head-spinning doublespeak about the CRA. API’s press release on Mr. Gerard’s testimony was titled “smart, science-based regulation needed to advance America’s energy renaissance and jobs.” Apparently even API knows that is what people expect and demand.  But what Mr. Gerard actually said was:

This week, we support the efforts of Congress as it takes the first step to pull back a number of these ill- considered and hasty regulations under the CRA. These include Section 1504 of Dodd-Frank, which places U.S.-based energy companies at a competitive disadvantage in the world marketplace, and BLM’s methane regulations, which are technically flawed and redundant to state regulation. Furthermore, we look forward to the anticipated CRA resolution on EPA’s redundant and unnecessary Risk Management Program rulemaking.

Despite Mr. Gerard’s doublespeak, the CRA has the opposite effect – killing smart, science-based regulations and blocking agencies from issuing any similar updates in the future, unless Congress passes new legislation specifically authorizing it.

The CRA is the opposite of a smart science-based regulation; it is a dirty trick that Congress can use to do the oil industry’s bidding.

Ford Backpedals on Promises, Could Harm American Consumers

Last Tuesday, the CEOs of General Motors (Mary Barra), Ford (Mark Fields), and Fiat-Chrysler (Sergio Marchionne) met with President Trump to discuss the auto industry. On Thursday, we finally got some more details about what they discussed, and it’s pretty bad for everyone.

Ford signed on to rules and is now trying to back out of its commitment

Ford CEO Mark Fields recently met with President Trump to weaken federal oversight of the industry, including the vehicle efficiency regulations that have sparked investments in jobs and are already saving consumers millions of dollars in fuel. Photo: Wikimedia

As part of an overall deal on regulation of the industry, Mark Fields is seeking to weaken the federal vehicle efficiency standards finalized in 2012. These standards were supported at the time by all three Detroit manufacturers, as well as nearly all other automakers.

Included in those rules was a mid-term review of the EPA’s regulations. That comprehensive review was completed by the Obama administration two weeks ago, and its results surprised no one—those rules finalized back in 2012 are easier to achieve than anticipated and at reduced costs to automakers…so sayeth not just the EPA but the Department of Transportation and California Air Resources Board; the National Academies of Science, Engineering, and Medicine; UCS; and countless others.

Now, Mark Fields is jumping at the opportunity to stick it to the American public and back out of that agreement, despite Ford seeing record profits in 2016. And he wouldn’t just be harming the environment with this decision—he’d be harming American workers and American consumers.

Vehicle standards are good for American workers

Ford invested $1.1 billion in the Kansas City assembly plant for its F-150. With the all-aluminum truck continuing to maintain its position as top-selling vehicle in the United States, it’s clear that investments in fuel economy are good for American workers and American consumers.

Since bottoming out in the recession, the US auto industry has added nearly more than 300,000 jobs in manufacturing and assembly. It’s difficult to estimate exactly how many of those jobs are related to efficiency standards, but a recent report from the Department of Energy noted that nearly half of all auto manufacturing and assembly jobs are in technology that improves the fuel economy of the vehicle.

Ford themselves know quite well how these investments pay off—their best-selling vehicle is the F-150, and they just invested $1.1 billion dollars to its Kansas City Assembly plant to manufacture the new aluminum-bodied F-150, adding 900 workers in the process. Alcoa, just one of many suppliers to the F-150, added 200 jobs to provide the aluminum for the new truck. And this is just one of many examples—suppliers around the country are creating jobs as automakers invest in new technologies at unprecedented rates.

Instead of pointing out just how good these standards have been for jobs, providing certainty for the industry and sparking a series of strong investments in the United States, Mark Fields took a cue from the President by providing his own “alternative fact,” repeating a previously debunked claim that these standards could cost 1 million jobs.

(Please see here, here, and here for why this number is fundamentally flawed.) In fact, previous analyses have shown that these standards will lead to more than 50,000 jobs in automotive manufacturing alone.

Beyond the jobs impacts, there is also analysis that these standards help make the industry, and particularly the Detroit automakers, more resilient to shifting market trends. That benefits the workers directly, particularly under the profit-sharing agreements that many UAW workers enjoy. And it also insures the industry against a repeat of the disastrous plummet in sales that led to the bailout of GM and Chrysler and nearly bankrupted Ford when consumers turned away from pricey, inefficient trucks and SUVs and towards more efficient cars.

Should this situation repeat itself (and with gas prices such a volatile commodity, it no doubt could), fuel economy standards would help, leading to profits for the domestic automakers no matter what; if Mark Fields helps scuttle those standards by focusing on the short term, it could cost the Detroit Three about $1 billion annually in the long run.

Vehicle standards are good for American consumers

In addition to protecting workers, these standards protect consumers. More fuel efficient vehicles protect consumers from volatility at the pump. This is especially important for lower income individuals who purchase vehicles on the used car market—their choices are dictated by more affluent individuals who can afford to care less about fuel economy and generally spend more of their money on the vehicle versus the fuel. For low-income households, this is flipped: for this reason, fuel economy standards benefit lower-income individuals disproportionately.

This is one of the many reasons why fuel economy standards are so critical during times of low gas prices.

Moreover, saving money on fuel means more money that can be spent elsewhere in the economy—and that means more jobs for everyone. Taken together, we estimate that the 2012-2025 standards will add $25-30 billion to the economy by 2030, which means about 650,000 total new jobs across the economy.

Regulations aren’t “out of control”—they’re protecting Americans and holding companies accountable

On the same day as the Trump-Detroit Three meeting, Volkswagen approved a settlement with dealers over its Clean Air Act-violating diesel cars. One week before that, Fiat-Chrysler was served notice that some of their vehicles are in violation of the Clean Air Act, too. A month before that, General Motors appealed to the Supreme Court to try to wriggle out of some of the responsibility for an ignition switch defect that led to 124 fatalities.

Over the past few years, Ford, Hyundai, Kia, BMW, and Mercedes have all been forced to adjust their fuel economy labels because they were misleading to consumers. And obviously there is the disastrous Takata airbag scandal enveloping Honda, Toyota, Ford, and basically the entire industry, which has resulted in at least 11 dead.

All of this is to say that it’s pretty darn clear why the auto industry is regulated. And, frankly, it’s appalling that the CEO of Ford is trying to use a new administration to undermine government watchdogging of an industry with quite the history of skirting and combatting regulation.

Maybe Mark Fields would be better served using this as an opportunity to engage more constructively, as it appears his counterpart Mary Barra at GM may be:

“We had a very constructive and wide-ranging discussion about how we can work together on policies that support a strong and competitive economy and auto industry, one that supports the environment and safety. The U.S. is our home market and we are eager to come together to reinvigorate U.S. manufacturing. We all want a vibrant U.S. manufacturing base that is competitive globally and that grows jobs. It’s good for our employees, our dealers, our suppliers and our customers.”

Let’s hope GM is true to their word and Ford changes their tune. Our health, safety, and economy may very well depend on it.

Photo: Wikimedia

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