How Trump's New Car Pollution Plan Could Split the Market Into Two

Politics is inherently a dirty game, but a recent announcement by the Trump administration was a step too far for some states. On Thursday, Trump’s team announced a plan that would weaken regulations on car pollution imposed by the Obama administration.

The announcement sparked a response from 20 state attorneys general, who threatened to sue if the administration proceeds with its plan, setting the parties on a collision course over environmental concerns, which have been sidelined by Trump. If the battle proceeds, it could split the car market into two.

The Proposed Rules

Trump’s proposed rules, published by the EPA Thursday morning, would halt plans put in place by President Obama meant to decrease pollution.

• They would freeze fuel efficiency standards set in 2012 that mandated average fuel economy in 2025 to be 54.5 miles per gallon. The frozen standard would be at the 2020 level of 37 miles per gallon.
• They would also revoke a federal waiver that allows California to set stricter tailpipe emissions standards, which are followed by 12 other states and were the model for Obama’s emission rules.

The Trump administration argues that the rules will decrease car costs, increase sales, and save lives by allowing car manufacturers to devote more funds towards safety. Of course, the Obama administration did the same analysis and found contrary results.

The Road Ahead

With the announcement of the proposed rules, 20 states have threatened to sue the Trump administration. In a statement, New York Attorney General Barbara D. Underwood highlighted what she saw as unprecedented strong-arming by Trump, saying “This decision upends decades of cooperative state and federal action to protect our residents. We are prepared to go to court to put the brakes on this reckless and illegal plan.”

The suit, if it proceeds, could send America’s car market careening towards division.

In 2009, the EPA, California, and the car industry agreed to implement a plan that would bring federal emission standards in line with California’s, unifying the car market under California’s stricter regulations. California still had the ability to continue to impose even stricter rules but agreed to follow the unified plan.

With Trump’s proposal, it appears that California is willing to fight for continued rights to impose its own standards. If the administration proceeds with its plan, the ensuing battle could result in two divergent sets of rules. Even without a decision, it’s possible that both parties would be allowed to continue to impose their own rules, and perhaps even more frightening for the car industry, a court decision could ensconce California or other states’ rights to impose their own regulations — which could result in two or more car markets with separate stipulations.

Now, with that prospect in mind, automakers are urging cooperation.

“It’s time for substantive negotiations to begin,” representatives from The Auto Alliance and Global Automakers said in a joint statement. “We urge California and the federal government to find a common sense solution that sets continued increases in vehicle efficiency standards while also meeting the needs of America’s drivers.”