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Who Sets Carbon Emission Standards for a Nation?

Since the OPEC crisis in the 1970s, improving fuel efficiency has been an ongoing regulatory requirement for car companies around the world.  As supply conservation became less problematic, environmental impact issues moved to the forefront: less fuel consumed per kilometer traveled also means fewer particulates and other emissions created per kilometer traveled.

For decades now, this need has prompted ongoing technological development in engine design, body design, fuel composition, and refining.  Fuel efficiency may be one of the most important factors governing many aspects of today’s automobile.  Perception of the importance of fuel efficiency to car buyers varies with the price of gas at the pump: prices up, fuel efficiency concerns up.  When prices settle down, however, for lots of reasons North American ‘car’ buyers default to their abiding preference for bigger vehicles—these days light trucks and SUVs.

Car companies make much higher if not all their profit on their bigger vehicles so this default is more than welcome.  However, the challenge of making their bigger vehicles more fuel-efficient is also greater.  The rules mandated about eight years ago in the United States recognized this vehicle size issue and differentiated improvement rates accordingly: passenger cars having to improve by 5% annually until 2025, trucks and SUVs by 3.5%.  Canada has more or less followed US national standards for fuel efficiency improvements.

A complication in the regulation of fuel economy standards in the US is that the state of California through its California Air Resources Board (CARB) has set its own stricter standards, which have been adopted by 12 other states.  This has resulted in approximately 30 to 40% of all the cars and trucks sold in the US following the CARB rules and not the ‘nationwide’ standards set by the US Environmental Protection Agency (EPA).  And now, thanks to one of the key planks of the Current US administration—namely the promise to reduce regulation and bring more jobs back to the US — this complication is becoming more complicated.

While the ‘Big Three’ US automakers have welcomed the willingness to ease national standards they also reportedly do not want to widen the difference between the two sets of standards.  Basically, they want it all: an easing of the EPA rules set by the previous administration, and a single national standard.  When the recent EPA report conducted by the current administration recommended freezing the standards in 2020, the US car companies were looking at changes that were, as one commentator described them as “something far more aggressive … than what [they] expected, or wanted.”

In return, the US government is asking companies to hire more US workers to make more cars in the US.  It has also prepared a legal case “for denying California the ability to set tougher standards than the national ones”

How Canada’s standards will be affected by the outcome of this is unclear.  If California continues to self-regulate with tougher standards, some commentators are saying our current anti-fossil fuel government may be tempted to follow the California rules.  Or not.

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