Analysis

Will Trump put the brakes on fuel standards?

President Trump pledged to review the strict fuel efficiency standards set by the Obama administration

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President Trump is granting automakers "their top wish," said Bill Vlasic at The New York Times. While visiting Detroit last week, Trump pledged to reopen a government review of the strict fuel efficiency standards set by the Obama administration in 2012. The rules, "a pillar of President Obama's climate change legacy," require automakers to almost double the average fuel economy for new cars and trucks to 54.5 miles per gallon by 2025. The Environmental Protection Agency affirmed those standards in January, wrapping up a midterm review of the agreement in the final days of Obama's presidency. But automakers complain that the review didn't give them enough time to contest the government's fuel targets, which they say are too ambitious. Now they'll get a chance to argue their case before an administration that's vowed "to remove the shackles of regulation" from industry.

Automakers say they want fuel standards "that recognize today's market realities," said Brent Snavely at the Detroit Free Press. The Obama administration initially estimated the new standards would save drivers $1.7 trillion in fuel costs over the life of the vehicles, while costing the auto industry roughly $200 billion over 13 years — costs that car makers say would be passed on to consumers. The new rules were supposed to encourage automakers to build more electric and hybrid vehicles. But since then, gas prices have plummeted and consumers have once again started "craving fuel-thirsty SUVs." The U.S. auto industry might regret getting what it wants, said Joann Muller at Forbes. Right now, other countries are imposing tough emissions regulations, making them unlikely to buy gas-guzzling American autos. "If the U.S. relaxes the standards, automakers could quickly get lapped by more innovative global players."

Rather than rolling back fuel standards, Trump should scrap them entirely, said Virginia Postrel at Bloomberg. Fleetwide fuel economy standards "are a terrible way to achieve either fuel savings or lower carbon emissions." They make newer vehicles more expensive, which means drivers hold on to gas-guzzling older autos longer. Fuel standards also meddle in corporate strategy by compelling companies "that are good at making and selling larger vehicles to make and sell little cars as well." Forcing General Motors to churn out Chevy Cruzes "doesn't do much for the environment."

Detroit shouldn't expect any regulatory relief soon, said Aarian Marshall at Wired. A new EPA review will take months, and California — the nation's largest car market — has the authority to set its own tailpipe standards under the Clean Air Act. California helped develop the Obama-era rules, and its more stringent standards are followed by 13 other states and Washington, D.C. That means automakers will either have to build different cars for different markets, which is "untenable businesswise," or stick to the old standards. Trump could take the unprecedented step of trying to revoke California's special status, but that would trigger a massive legal battle. "In summation, buckle up."

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