California Regulators Propose 44 MPG Requirement by 2020
By Chris Haak
The California Air Resources Board (CARB) adopted rules several years ago requiring a reduction in greenhouse gas emissions (CO2) for vehicles sold in California for model years 2009 through 2016. CARB is now preparing to expand the rules beyond 2016 to 2020. The result of California’s stricter rules is that the average new vehicle sold in California in 2020 would need to average 43.9 mpg (versus the Federal CAFE standard of 35.0 mpg by the same date).
The auto industry is challenging the original 2009 to 2016 rules in Federal courts, arguing that they are an illegal attempt to usurp federal authority over fuel economy (because unlike the case with smog-forming pollutants, C02 emissions are correlated almost directly to fuel consumption/economy). They are also likely to challenge the additional years, as they are even more strict. Because California mandated pollution controls on vehicles before the federal government did, the state is allowed to set its own pollution standards, and 15 other states have adopted the California standards as well.
In December 2007, EPA Administrator Stephen Johnson declined to allow California to enforce their greenhouse gas rules. His argument was not one of federal versus state powers, though – his argument was that the new federal 35 mpg standard would do more to cut emissions and global warming than state rules, which he said would set a standard of 33.8 mpg.
Because California and the 15 states (primarily in the Northeast) that follow its rules make up about half of the US new vehicle market. Since it would be impossible to write off half of the US new vehicle market, the result could be one of two things: either the California standards will become a de-facto national standard (forcing everyone in the US into even smaller, more efficient vehicles than we would have with a 35 mpg CAFE requirement), or severely limiting allocation of models available for sale in California and the other states that do not meet the mileage standards. Of course, economics 101 tells us that limiting the supply of something will force up its price, so if you live in California or one of those other states, you can expect to pay significantly more for a new vehicle than you otherwise would have to.
CARB has run into issues with its “innovation by legislation” mantra several times in past years. More than a decade ago, California mandated that a percentage of the new vehicle fleet sold in Califonia be 10% ZEVs (zero-emission vehicles) by 1998. The only way to reach complete zero emission status is with a 100% electric vehicle or one with a fuel cell. Obviously, there were no mass-produced fuel cell or electric vehicles on the road in 1998, so the board modified the ruling that year to allow up to 60% of the ZEV requirement to be met with vehicles having extremely low emissions and other specific attributes. This was the birth of the PZEV (i.e. Ford Focus PZEV and BMW 325i PZEV) and AT-PZEV (AT stands for Advanced Technology) (i.e. Toyota Prius).
The question then remains: if the federal government allows California’s rules to stand (which it may do eventually; legislation to do so is pending in Congress, and McCain, Clinton, and Obama have all said that they support allowing states to establish their own greenhouse gas rules), are they even realistic expectations for just 8 to 12 years in the future? Cars and the smallest light trucks will need to achieve 50.8 mpg by 2020, and other light trucks will have to achieve 35.2 mpg, based on California’s current vehicle sales mix. Imagine for a moment what the highways will look like in 2020 when the average new car gets over 50 mpg. It will either be a very different looking highway, or CARB will have to allow some sort of flexibility or waivers to automakers.
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