10 Questions on Fuel Economy Mandates for EPA’s Janet McCabe

This week, the Subcommittee on Oversight and Investigations in the House Committee on Energy and Commerce is slated to host a hearing regarding the Volkswagen’s use of emissions defeat devices and the Zero Emissions Vehicle (ZEV) program. The Subcommittee has summoned Acting EPA Air and Radiation Administrator Janet McCabe to testify in response to questions surrounding the ZEV program implementation.

This hearing is a welcome opportunity for the Subcommittee to question Ms. McCabe on the ZEV program, and, by extension, EPA’s fuel economy mandates for cars and light-trucks. In a surprise move that was months ahead of EPA’s own schedule (which was previously posted on EPA’s website), last week EPA made a Proposed Determination to keep the 2022-2025 fuel economy mandate unchanged. Given the EPA’s haste, the only plausible explanation for EPA’s quick decision was to finalize their determination before President-elect Trump takes office.

It is surprising that EPA did not revise their 2022-2025 mandate given the evidence. New research shows that car prices are rapidly increasing. From the 1990s through 2008, car prices were falling on a quality adjusted basis. Today, car prices are $6,000 more than they would have been if the trend had continued. An additional $6,000 for a vehicle a lot of money.

Given the timing of EPA’s decisions and the economic strain being placed on the American car buying public, the Subcommittee should use this hearing to get answers from Ms. McCabe on what exactly is going on with EPA’s fuel economy mandates and the ZEV program. Here are ten questions the Subcommittee should ask Ms. McCabe:

1.) Your agency recently released its Proposed Determination document regarding EPA’s 2022-2025 GHG mandate for light duty vehicles. The Proposed Determination did not change the mandate, despite the fact that the price of new vehicles, adjusted for quality, are $6,000 per vehicle higher than if the price trend from the 1990s through 2008 had continued. Are you not concerned about forcing American families to pay $6,000 more per vehicle?

Note: If McCabe is unfamiliar with the study, that is very concerning. The study was cited thousands of times in comments to EPA. If she is not familiar with the study, then why did EPA quickly and aggressively make the Proposed Determination?

2.) According to EPA, the Obama administration’s fuel economy mandates will cause the price of a new car to increase by $3,000 per vehicle. The National Association of Automobile Dealers estimates that a $3,000 per vehicle increase in the cost of a vehicle would force nearly 7 million people out of the market for a new car. Car prices have already increased more than that, compared to the long-term price trend. Why is EPA so upbeat about imposing this mandate that is forcing millions of American drivers out of the market for a new car?

3.) The Center for Automotive Research recently looked at the economic impacts of the fuel economy mandates in various scenarios. In 8 of the 9 scenarios, EPA’s mandate would cause net jobs losses. In fact, the only scenario that does not show job losses is if the cost of the mandate is only $2,000 a vehicle. Why is EPA not more concerned about how this regulation will lead to job losses in the United States?

4.) The evidence suggests that EPA’s fuel economy mandate has driven up the cost of a car by thousands of dollars–making the dream of car ownership more difficult for millions of American families. EPA is doing this because of climate change. According to EPA, the 2017-2025 mandate will only reduce global temperatures by 0.01–0.02 °C by 2100. Why is EPA reducing the mobility and freedom of millions of Americans, not to mention thousands of jobs, in exchange for a change in global temperature of 2 hundredths of a degree by 2100?

5.) Last week you issued a Proposed Determination on the 2022-2025 mandate. To do this, you had to review over 220,000 comments in only 44 working days since the end of the comment period. Given the incredible importance of automobility and the impact this mandate will have on the economy as a whole, why did you rush to make such a hasty judgement?

6.) You released your Proposed Determination on November 30, 2016.EPA’s website previously had a timeline which showed the Proposed Determination being issued in mid-2017, not in 2016. NHTSA’s website has a similar graphic.

Furthermore, your letter to Chairman Upton dated June 10, 2016 stated that “…EPA anticipates that [the Determination] will be issued in 2017.”

Why is EPA working so hastily to finalize this determination?

7.) It is difficult for EPA to meet all of its statutory deadlines. For example, with the Renewable Fuel Standard, EPA repeatedly missed deadlines in setting volume requirements. Similarly, in administering the National Ambient Air Quality Standards (NAAQS) the EPA is frequently late in issuing regulatory documents. Why is EPA so far ahead of schedule issuing the Proposed Determination?

8.) When are you planning on finalizing the Proposed Determination? Should we expect that before the new administration?

9.) The National ZEV Investment Plan under the VW settlement requires VW to spend $1.2 billion over ten years “to support increased use of zero emission vehicle technology.” How is this remedy at all related to VW’s illicit use of “defeat devices?” What happens to the ZEV program once VW fulfills its financial obligation? How will the fund be financed?

10.) The National ZEV Investment Plan was considered by Congress and rejected. As policy expert William Yeatman explains:

Having failed to persuade Congress, the administration now seeks to co-opt the judiciary’s injunctive and contempt powers in order to advance the President’s failed legislative agenda. The proposed partial consent decree would give EPA control of $1.2 billion in ZEV investments, which is four times what the administration unsuccessfully sought from Congress for effectively the same purpose in 2011.

Why is EPA trying to get VW to fund a program Congress rejected?