As part of the Advance Notice of Proposed Rulemaking (ANPR) on regulating greenhouse gas (GHG) emissions released by the US Environmental Protection Agency (EPA) last Friday afternoon, the agency mooted two alternative attributes-based approaches for setting light-duty vehicle GHG standards.
Based on EPA modeling, such light-duty vehicle GHG regulations could result in average CO2 emissions of approximately 232 g/mile (144 g/km) by 2020, reflecting fuel economy of approximately 38.3 mpg gasoline (6.14 L/100km). The current fuel economy target in the new CAFE legislation is 35 mpg by 2020.
(The California Air Resources Board earlier this year projected that GHG controls in Pavley Phase 2 rules would result in a new California fleet mpg of 43.9 mpg by 2020; federal CAFE applied to the California fleet would take it to 35.7 mpg by 2020. Earlier post.)
The EPA is proposing neither of the methods as policy, but is seeking comments on approach, as well as on a long list of other aspects related to such potential regulation. The entire ANPR is a solicitation for comments on the benefits, proposed approaches, and ramifications of regulating greenhouse gases (GHGs) under the Clean Air Act (CAA).
The EPA produced the document in response to the US Supreme Court’s decision in Massachusetts v. EPA, in which the Court found that the Clean Air Act (CAA) authorizes EPA to regulate tailpipe greenhouse gas emissions if EPA determines they cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare.
There are thus two aspects the ANPR. First is the analysis of endangerment; second is the regulation that would result if endangerment is determined.
In his preface to the document, and again in the press conference held at its release, EPA Administrator Stephen Johnson asserted that the Clean Air Act is ill-suited for the tasks of regulating global greenhouse gases. The 588-page ANPR document included some 90 pages of comments from other federal agencies and offices, all noting the unsuitability of the CAA for GHG regulation. (The Department of Transportation—the agency currently in charge of fuel economy regulations (CAFE)—was especially critical of EPA’s assumptions and modeling efforts.)
...it has become clear that if EPA were to regulate greenhouse gas emissions from motor vehicles under the Clean Air Act, then regulation of smaller stationary sources that also emit GHGs—such as apartment buildings, large homes, schools, and hospitals—could also be triggered. One point is clear: the potential regulation of greenhouse gases under any portion of the Clean Air Act could result in an unprecedented expansion of EPA authority that would have a profound effect on virtually every sector of the economy and touch every household in the land.
This ANPR reflects the complexity and magnitude of the question of whether and how greenhouse gases could be effectively controlled under the Clean Air Act. This document summarizes much of EPA’s work and lays out concerns raised by other federal agencies during their review of this work. EPA is publishing this notice today because it is impossible to simultaneously address all the agencies’ issues and respond to our legal obligations in a timely manner.
I believe the ANPR demonstrates the Clean Air Act, an outdated law originally enacted to control regional pollutants that cause direct health effects, is ill-suited for the task of regulating global greenhouse gases. Based on the analysis to date, pursuing this course of action would inevitably result in a very complicated, time-consuming and, likely, convoluted set of regulations.—Stephen Johnson, Preface to the ANPR
Despite the amount of work EPA staff has already put into the task, the ANPR as released is more of a work-in-progress document.
In view of the interrelationship of CAA authorities and the many pending CAA actions concerning GHGs before the Agency, EPA decided to issue this ANPR to elicit information that will assist us in developing and evaluating potential action under the CAA. In this ANPR, we review the bases for a potential endangerment finding in the context of the pending petition concerning new motor vehicles, explore interconnections between CAA provisions that could lead to broader regulation of GHG emissions, and examine the full range of potential CAA regulation of GHGs, including a discussion of the issues raised by regulation of GHG emissions of mobile and stationary sources under the Act. The ANPR will help us shape an overall approach for potentially addressing GHG emissions under the CAA as part of a broader set of actions to address GHG.—ANPR, p. 90
Regulating LDV GHG Emissions
The transportation sector in the US (excluding international bunker fuels) accounted for approximately 28% of all GHG emissions in 2006, primarily through the combustion of fossil fuels. Virtually all of the energy consumed in this end-use comes from petroleum products, with more than 60% of the CO2 emissions resulting from gasoline consumption for personal vehicle use.
CO2 is the dominant GHG emitted from motor vehicles and motor vehicle engines (referred to as section 202 sources in the CAA and ANPR), and the dominant GHG emitted in the US and globally. CO2 emissions from section 202 sources in the US grew by 32% between 1990 and 2006, largely due to increased CO2 emissions from light-duty trucks (61% since 1990) and medium/heavy-duty trucks (76%).
Both of the approaches EPA developed for LDV GHG emissions regulations are attribute-based approaches, using vehicle footprint (correlating roughly to vehicle size) as the attribute. Under either approach, a CO2-footprint continuous function curve is defined that establishes different CO2 emission targets for each unique vehicle footprint.
In general, the larger the vehicle footprint, the higher (less stringent) the corresponding vehicle CO2 emission target will be. Each manufacturer would have a different overall fleet average CO2 emissions standard depending on the distribution of footprint values for the vehicles it sells.
One approach was based on a fixed 4% per year reduction in CO2 emissions. The other approach identified CO2 standards which an engineering optimization model projects as resulting in maximum net benefits for society. That approach uses the DOT’s Volpe Model, which the DOT is using in rulemaking establishing CAFE standards.
In the most recent analysis presented in the ANPR, EPA updated earlier work by including plug-in hybrids as a viable technology beginning in 2012; considering the multi-year planning cycles available to manufacturers; considering CO2 trading between car and truck fleets within the same manufacturer; assuming that all major manufacturers would comply with the standards; and correcting the CO2 reduction effectiveness for diesel technology.
The agency has yet to considered the widespread use of light-weight materials; further improvements in the CO2 reduction effectiveness of existing technologies; potential for cost reductions beyond an earlier analysis in 2007; and the potential for new technologies. It also did not addressed the potential changes in vehicle market shifts that may occur in the future in response to new standards, new consumer preferences, or the potential for higher fuel prices.
Recent trends in the US auto industry indicate there may be a major shift occurring in consumer demand away from light-duty trucks and SUVs and towards smaller passenger cars. Such potential trends are not captured in our analysis and they could have a first-order impact on the results.—ANPR, p. 258
Based on its updated analysis using both approaches, the EPA concluded that:
Technology is readily available to achieve significant reductions in light-duty vehicle GHG emissions between now and 2020 (and beyond);
The benefits of these new standards far outweigh their costs;
Owners of vehicles complying with the new standard will recoup their increased vehicle costs within 6-9 years, and;
New standards would result in substantial reductions in GHGs.
The EPA also proposed a possible supplemental “backstop” carbon dioxide emissions standard for each year (also referred to as an “anti-backsliding” provision) as a complement under the CAA to an attribute-based standard. This would be an additional obligation for manufacturers that would limit the maximum fleet average carbon dioxide emissions, independent of attributes.
The fixed percent per year approach is broadly consistent with EPA’s traditional means of setting standards for mobile sources, which identifies levels of emissions reductions that are technologically feasible at reasonable cost with marginal emissions reduction benefits which may far outweigh marginal program costs, without adverse impacts on safety and with positive impacts on energy utilization, and which address a societal need for reductions. Comparing and contrasting these approaches with the model-optimized approach is one way to evaluate options for appropriate standards under section 202(a).—ANPR, p. 251
The EPA published a more detailed description of the two models in a supporting document, Evaluating Potential Greenhouse Gas (GHG) Reduction Programs for Light Vehicles.