Quantcast
Business
Fuel economy and air pollution regulations have lowered pollution and pushed industry innovation. Federated Conservationists of Westchester County / Flickr

Why EPA’s U-Turn on Auto Efficiency Rules Gives China the Upper Hand

By Greg Dotson

The Trump administration is poised to ease pollution and efficiency rules for new passenger cars and trucks, giving automakers a reprieve from more stringent Obama-era standards. But in the process, it could yield global leadership in the auto sector to the Chinese.


U.S. Environmental Protection Agency (EPA) Administrator Scott Pruitt is expected to announce a plan to relax existing tailpipe standards that apply through 2025, scrapping the previous target of an average of 36 miles per gallon. Pruitt is also expected to deny the state of California its historic ability to adopt tailpipe standards that are more ambitious than the federal government's.

One might think of this as another case of industry versus environmentalists. After all, the automakers are calling for eased regulatory burdens and "harmonized" standards across the states and the federal government. Environmentalists decry the move as undermining our nation's efforts to cut carbon pollution.

But the EPA's expected proposal defies the simple narrative that businesses and environmentalists are butting heads. Over the last half century, tailpipe emissions rules have helped the nation develop a vibrant, globally competitive automotive sector. As a former senior energy congressional staffer and now a law professor, I have learned that well-designed environmental standards can spur innovation and give our domestic companies a "first-mover advantage."

As a policy professional, I met countless times over two decades with car makers, their suppliers, technologists, environmental advocates and entrepreneurs. In my view, reversing course on the EPA's tailpipe standards threatens to yield this competitive advantage to other nations.

Parts Suppliers Versus Car Makers

Some segments of the auto industry understand the importance of emissions standards. A recent survey done on behalf of a clean transportation industry group found that 95 percent of auto parts suppliers agreed that more ambitious standards encourage innovation and investment in the U.S.

These companies overwhelmingly want the EPA standards maintained or even strengthened and are letting policymakers know that any relaxation will cost U.S. manufacturing jobs. Suppliers of pollution control technologies have told the EPA that weakening the standards could strand current investments and jeopardize new investments in domestic manufacturing of clean car technologies.

China's more aggressive push for plug-in vehicles has attracted investment from automakers in batteries and other emerging auto technologies.Philip McMaster / CC BY-NC

These parts suppliers employ hundreds of thousands of workers and their market is expected to grow to $23 billion by the end of the decade. In their own words, the industry group Manufacturers of Emission Controls Association said its members continue "to grow and add more jobs in response to environmental regulations." In 2017 alone, these manufacturers invested more than $3 billion in developing technologies that reduce emissions from mobile sources.

Developed and Made in America

The landmark Clean Air Act, passed in 1970 and strengthened in 1990, has two key policy features that have spurred innovation and economic activity in the auto manufacturing sector.

First, the act says that EPA standards for cars and trucks take effect after the period "necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period." This even-handed approach ensures that the auto manufacturers have the time they need to develop pollution control technology, and that the EPA can set standards stringent enough to require the development and deployment of new technology.

This "technology-forcing" approach has brought innovation to an industry that hasn't always embraced it—from the industry's well-known resistance to catalytic converters decades ago to today's reluctance to adopt available technology to improve the efficiency of conventional internal combustion engines.

Second, Congress has preserved the ability of California to set its own tailpipe standards—an authority the state has exercised since before the EPA was created in 1970. Other states may opt-in. In the case of California's greenhouse gas standards for cars and trucks, 13 states have decided to do so, creating a combined market pull of approximately 30 percent of the nation's annual new passenger car and truck sales.

The world can then follow. This "California effect" occurs as jurisdictions within and outside of the U.S. trade up to more stringent emissions standards to achieve their benefits and simplify compliance.

Under this virtuous cycle, the U.S. leads with tougher standards that drive research, technology development, commercialization and manufacturing. That technology is then sold to the world.

California vs. China

China, however, is leap-frogging the U.S. policy.

In 2010, the Chinese government designated "new energy vehicles"—essentially those that plug in to electrical outlets—as a "strategic emerging industry." Officials have done this not only to reduce urban smog but also as a tool for industrial development. It helps Chinese industry capture domestic market share while establishing Chinese automakers as global leaders in the technology; it also develops their domestic battery-making sector.

California also requires automakers to supply a growing number of plug-in vehicles. But that program, which has seemed ambitious domestically and has shared goals and approaches with China, simply is not at the same scale as China's.

This has created an opportunity that China seeks to capitalize on in the coming decades. China's recently adopted goals for plug-in vehicles overtake California's program by requiring an aggressive deployment of plug-in vehicles beginning in 2019 with a target of 7 million new plug-in cars sold per year by 2025. The Chinese government is even openly discussing the appropriate date to discontinue sales of internal combustion engine vehicles within China.

By comparison, automakers will be able to comply with California's zero emission vehicle requirement if just 8 percent of new cars sold in 2025 are electric. If 2 million new cars continue to be sold in California in 2025, that would amount to just 160,000 electric vehicle sales annually.

China's policies are being reflected in corporate decisions. Even as Daimler teams with a Chinese partner to invest $2 billion in a manufacturing plant in China, Chinese automaker Geely has accumulated nearly 10 percent of Daimler's stock reportedly in a bid to secure its electric and autonomous vehicle technology. Ford has committed to a $765 million investment to jointly build electric vehicles with a Chinese partner.

Given the essential need to reduce carbon pollution from the transportation sector, I see the policy rationale for fuel efficiency and pollution reduction mandates in the years to come as ironclad.

From an economic point of view, clean car technology represents a tremendous opportunity for the nation willing to step up and lead as the world transitions in the decades to come. While it may still be an open question as to which country will benefit the most from this transition, the forthcoming EPA decisions could tilt the playing board away from U.S. companies.

Reposted with permission from our media associate The Conversation.

Show Comments ()

EcoWatch Daily Newsletter

Sponsored
Renewable Energy
A prototype of GE's massive new wind turbine will be installed in the industrial area of Maasvlakte 2 in Rotterdam. GE Renewable Energy

World's Largest Wind Turbine to Test Its Wings in Rotterdam

Rotterdam's skyline will soon feature the world's largest and most powerful offshore wind turbine.

GE Renewable Energy announced on Wednesday it will install the first 12-megawatt Haliade-X prototype in the Dutch city this summer. Although it's an offshore wind turbine by design, the prototype will be installed onshore to facilitate access for testing.

Keep reading... Show less
Insights/Opinion
Colorful, fresh organic vegetables. fcafotodigital / Getty Images

A New Diet for the Planet

By Tim Radford

An international panel of health scientists and climate researchers has prescribed a new diet for the planet: more vegetables, less meat, fresh fruit, whole grains and pulses, give up sugar, waste less and keep counting the calories.

And if 200 nations accept the diagnosis and follow doctor's orders, tomorrow's farmers may be able to feed 10 billion people comfortably by 2050, help contain climate change, and prevent 11 million premature deaths per year.

Keep reading... Show less
Popular
Children's books about the environment. U.S. Air Force photo / Karen Abeyasekere

This State Might Require Public Schools to Teach Climate Change

Reading, writing, arithmetic ... and climate science. That doesn't have the same ring as the "three Rs" of education, but Connecticut could one day require the subject to be on the curriculum, The Associated Press reported.

A Connecticut state lawmaker is pushing a bill to mandate the teaching of climate change in public schools throughout the state, starting in elementary school.

Keep reading... Show less
Climate
NASA's ICESCAPE mission investigates the changing conditions in the Arctic. NASA / Kathryn Hansen

These Eye-Opening Memes Show the Real 10-Year Challenge

Before-and-after photos of your friends have probably taken over your Facebook and Instagram feeds, but environmentalists are using the #10YearChallenge to insert a dose of truth.

Memes of shrinking glaciers, emaciated polar bears and coral bleaching certainly subvert the feel-good viral sensation, but these jarring images really show our planet in a worrying state of flux.

Keep reading... Show less
Sponsored
Popular
Vial containing swab from a deceased duck, collected for testing during the 2014-2015 avian influenza outbreak. © 2015 Erica Cirino, used with permission.

Could Trump’s Government Shutdown Cause Outbreaks of Wildlife Disease?

By Erica Cirino

The current U.S. government shutdown could worsen ongoing wildlife disease outbreaks or even delay responses to new epidemics, according to federal insiders and outside experts who work with federal wildlife employees.

Keep reading... Show less
Health
Vegan raw cheese from cashew nuts. byheaven/ iStock / Getty Images

Vegan Cheese: What’s the Best Dairy-Free Option?

By Ansley Hill, RD, LD

Cheese is one of the most beloved dairy products across the globe. In the U.S. alone, each person consumes more than 38 pounds (17 kg) of cheese per year, on average (1).

Keep reading... Show less
Sponsored
Insights/Opinion
Sun setting behind the Fawley Oil Refinery in Fawley, England. Clive G' / CC BY-ND 2.0

Even Davos Elite Warns Humanity Is 'Sleepwalking Into Catastrophe'

By Jessica Corbett

Ahead of the World Economic Forum's (WEF) annual meeting in Davos, Switzerland next week—which convenes the world's wealthiest and most powerful for a summit that's been called both the "money Oscars" and a "threat to democracy"—the group published a report declaring, "Of all risks, it is in relation to the environment that the world is most clearly sleepwalking into catastrophe."

Keep reading... Show less
Energy
Robusta coffee beans growing on a tree. Dag Sundberg / Getty Images

60% of Wild Coffee Species at Risk for Extinction

If humans don't wake up now to the threats posed by climate change and habitat loss, we may be in for a permanently sleepy future. A study led by scientists from the Royal Botanic Gardens, Kew found that 60 percent of wild coffee species are at risk for extinction.

Keep reading... Show less
Sponsored

mail-copy

The best of EcoWatch, right in your inbox. Sign up for our email newsletter!