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The California auto mileage deal and the leftist crusade against personal transportation

Four of the major auto producers — BMW, Ford, Honda, and Volkswagen — in July entered into an agreement with the Air Resources Board of the state of California for nationwide corporate average fleet miles-per-gallon standards for model years 2022 through 2026. Mileage requirements will rise at 3.7% per year instead of the annual 4.7% mandated (through 2025) under existing California requirements.

This is in the face of the Trump administration’s proposed rollback of the Obama/California mileage rules: a freeze of the mileage standards at the 2020 level through the 2026 model year. In simplest terms, the current agreement between California and automakers calls for a fleet average of about 50 mpg for light-duty vehicles by the 2026 model year, while the Trump proposal is for about 37 mpg by 2026.

Those mpg figures are highly artificial because of the “credits” given to the auto producers for the production (not actual sales) of various kinds of electric vehicles. The real issue at the center of this tug-of-war between California and the Trump administration is allowable greenhouse gas (GHG) emissions from automobiles, because the only way to reduce GHG emissions from vehicles is to reduce fuel consumption.

A small fleet of electric Chevrolet Bolt vehicles are charged by a sun tracking solar panel car charing system in San Diego, California, U.S. October 22, 2018. REUTERS/Mike Blake

The California political and regulatory establishment is extremist on the issue of GHG emissions, preferring ever-greater reductions regardless of the massive costs and near-zero climate effects of its policies. For them it is a fundamentally ideological imperative. Accordingly, it is obvious that it is the Trump regulatory rollback that has driven the agreement with the four auto producers. The state is vociferous in its demand that it be granted a waiver under the Clean Air Act to continue to impose its own mileage requirements, which have been adopted by 13 other states. But any such waiver in the context of greenhouse gas emissions clearly is illegal under the Environmental Policy and Conservation Act, which explicitly preempts states from adopting or enforcing laws or regulations “related to” fuel economy. Moreover, the Clean Air Act (section 209) proscribes such waivers unless California needs them to address “compelling and extraordinary conditions” unique to that state (other states may opt in under section 177).

Rumor has it that this week California governor Gavin Newsom and executives of the four auto producers (a fifth may join them) will hold a press conference extolling the deal and savaging the ongoing effort of the Trump administration to reduce the mileage requirements. This thunderous round of self-applause will obscure what is really going on. The “climate change” rationale for reductions in US light-vehicle GHG emissions is fatuous. Put aside the trivial magnitude of the reduction in GHG emissions advertised by California under the deal: “… 30% more greenhouse gas emission reductions compared to splitting up the standards between those followed by California and 13 other states and the less stringent standards proposed by the Trump administration.” Suppose instead that all US light-vehicle GHG emissions were eliminated. The annual reduction would be about 1.1 billion metric tons of CO2e, or about 17% of the U.S. total, or 2% of the global total. The temperature effect of that reduction, using the EPA climate model would be about 0.013°C by 2100.

Moreover, the agreement eliminates the requirement that mileage calculations incorporate “life-cycle” calculations of the GHG emissions from production of the electricity needed to power the fleet of electric vehicles envisioned by California policymakers. Translation: Electric vehicles, and the credits that they yield for the auto producers, count as “zero-emission” even if they run on electricity produced entirely by coal-fired power plants. The California policymakers also have maintained a deafening silence on the large GHG emissions resulting from the production of lithium-ion batteries that weigh over a half-ton each.

For California officials the mileage imperative is heavily ideological: Fossil fuels are the central manifestation of private sector irresponsibility — put aside the enormous benefits for mankind engendered by the availability of inexpensive energy — and automobiles powered by internal combustion engines are one major source of the demand for such fuels. It is no surprise, therefore, that the campaign for ever-higher mileage standards has evolved into a government-enforced cartel in which electric vehicles are subsidized by increased prices for conventional autos and light trucks.

There is no rigorous argument that would support subsidies for electric vehicles, which are utterly impractical in most uses because of limited ranges and long recharging times given current and prospective technology. The underlying politics means that the deal will advance the goal of engendering an enormous wealth transfer from rural, exurban, and suburban areas to urban ones, as individuals and businesses are forced by artificial transport constraints to concentrate in urban centers. It is clear, therefore, that the effort to subsidize electric vehicles heavily will result over the long term in a sharp reduction in individual mobility, and thus in individual freedom.

Because consumers across the states have different preferences for various vehicles, auto producers would have to manage 50 different fleets if all the states were to adopt the California standards, an outcome that has been avoided thus far because the Obama administration worked out an extralegal arrangement under which compliance with the EPA fuel standards was accepted by California and its allies. But it is clear that the new deal is viewed also by the auto producers as insurance against the possibility that Mr. Trump will lose the 2020 election, that a new Democratic administration would reimpose the Obama mileage requirements or ones even more stringent, and that those signing on to the deal now will be grandfathered in, yielding a competitive advantage over other producers.

This dishonesty – of the deal narrowly and the fleet mpg requirements more generally – is revealed by California’s argument that the relaxed Trump proposal “threatens air quality.” No, it does not, as it does not change the vehicular emissions limits for such conventional (“criteria”) pollutants as carbon monoxide or nitrogen oxides. Those emission standards are defined in grams per mile, not grams per gallon, so that a relaxation of mileage requirements would not affect those emissions. Actually, such a relaxation would reduce them by lowering the prices of conventional autos and trucks, thus modernizing the fleet and improving aggregate emissions performance.

The usual rationales for fleet mileage standards are exceedingly weak. Market competition can optimize the tradeoffs among fuel costs, vehicle performance, and up-front vehicle prices; there is no market “failure,” and government has few incentives to optimize resource allocation in any event. The energy “independence” argument for such policies is a myth.

The deal between California and the auto producers is a manifestation of both the age-old quest for ever-more power on the part of politicians and bureaucrats and the ill-advised unwillingness of businessmen to resist the de facto expropriation of their shareholders’ property. It should be rejected.