New Chamber Report Highlights Need for Achievable, Nationwide Fuel Economy Standards

Press Release
August 29, 2019

WASHINGTON, D.C. — A new report from the U.S. Chamber of Commerce Global Energy Institute calls for a redoubling of efforts to identify a workable path forward on vehicle fuel economy and greenhouse gas standards that provides regulatory certainty, continues progress on mileage and emissions reductions, and preserves the unified national program for vehicle sales.

The report, Divided Highway: the Importance of Uniform, Achievable Nationwide Automobile Standards, warns of market chaos and economic disruption if the current clash related to the vehicle rules results in dissolution of the longstanding national framework governing auto sales, known as One National Program.
 
“The dispute over auto fuel economy standards continues to escalate without proper attention to the market disruption and chaos that could occur if the existing national program were to dissolve,” said Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce. “Businesses already face a growing morass of economic and regulatory uncertainty that will only be exacerbated in the event of a bifurcated auto market and protracted litigation. A workable compromise that continues to improve fuel economy and reduce emissions while recognizing market realities is both achievable and essential."
 
The report calls on political leaders to recognize the importance of compromise national fuel economy standards to the auto sector, its extensive supply chain, associated industries or the more than 7 million related jobs it supports, and to the entire U.S. economy. 
 
The report and an accompanying letter urging all parties to put politics aside and deliver an acceptable middle-ground compromise was sent to U.S. Secretary of Transportation Elaine Chao, Environmental Protection Agency Administrator Andrew Wheeler, and California Air Resources Board chairwoman Mary Nichols.
 
The letter states:
 
“There is a growing consensus that the current standards, which require steep annual mileage improvements through model year 2025, are not reasonably achievable and must be significantly revised. It is also clear that the administration’s proposal to hold standards flat beginning in model year 2020 is insufficient—continued progress on fuel economy and emissions reductions can be achieved without undue harm to the economy, and predictable year-over-year efficiency improvements are key to enabling the U.S. to maintain environmental and manufacturing leadership. The Chamber supports robust efforts to continue such fuel economy gains, recognizing that they must proceed at a more modest pace that factors in the changing market dynamics that were not envisioned in 2012 when the current rules were put in place.”
 
The report describes the context by which the current dispute has risen and provides historical information about the energy security challenges that led to the creation of nationwide fuel economy standards in the 1970s. Since that time, average fuel economy has improved from 13.5 miles per gallon in 1975 to 22.4 miles per gallon today. The report also:
 

  • Details the dramatic reductions in vehicle emissions that have been achieved since passage of the Clean Air Act in 1970 (for example, vehicle emissions of volatile organic compounds, carbon monoxide, and sulfur dioxide have fallen by 90%, while emissions of nitrogen oxides have declined by 74% -- all while vehicle miles traveled have nearly tripled).
  • Explains how a bifurcated auto market or overly stringent standards may actually undermine environmental goals due to phenomena such as emissions leakage and reduced fleet turnover, while also diverting resources away from investments in safety enhancements and other desirable vehicle features; and
  • Warns that the negative economic impacts of a bifurcated market loom during a particularly challenging time for the auto sector, which is beset by declining sales and major trade and tariff concerns. The report notes that exacerbation of these headwinds could easily spread to the broader U.S. economy.

 
Download Full Paper: Divided Highway: the Importance of Uniform, Achievable Nationwide Automobile Standards