Robert E. Grady served as executive associate director of the Office of Management and Budget under President George H.W. Bush and was one of the principal White House negotiators of the Clean Air Act Amendments of 1990.
Older cars are much dirtier than new ones: According to a study by Penn’s Kleinman Center for Energy Policy, cars more than 10 years old account for between 70 and 80 percent of emissions of smog, carbon monoxide and other local pollutants that pose a threat to human health, despite representing a much smaller percentage of the automotive fleet. Whenever an older car subject to weaker tailpipe standards is retired and someone buys a new car, not only is it good for the economy, it also helps to clean the air.
But when those new cars are more expensive, Americans slow their purchases. According to Kelley Blue Book, the average price of a new electric vehicle is still more than $15,000 higher than the average combustion engine car, so at least in the near term, the Environmental Protection Agency’s new rule will materially raise the prices of new cars, slow “fleet turnover,” and make the air around us dirtier and less safe.
The Biden EPA claims that EV prices will come down rapidly in the coming years, but experience does not always support that: For example, Ford announced last summer it was raising prices on its F-150 Lightning series between $6,000 to $8,500, an increase of about 15 percent per vehicle. The Biden administration proposes to address the higher cost of EVs by offering subsidies to consumers, such as the tax credit of up to $7,500 per vehicle contained in the Inflation Reduction Act. (The credit is subject to price caps on the cars and income caps on the buyers.) The entire basket of climate subsidies in the law comes at the cost to taxpayers of $370 billion over 10 years, yet even this amount is not enough to cover the higher sticker prices of EVs. The new rule will effectively try to shove electric vehicles down the throats of the public at a faster rate than it has shown a willingness to swallow them.
The proposed rule also assumes that Detroit can make these vehicles at this scale — and that the United States would be stronger if it could. Yet, neither is certain: We do not have enough domestic production, or even reliable sources, of the minerals needed to produce the required amounts of electric vehicles, batteries or renewable power that will be required to charge all the new EVs.
As Daniel Yergin, vice chairman of S&P Global, recently pointed out in the Wall Street Journal, meeting Biden’s climate goals will require vast quantities of copper (of which 40 percent is mined in Peru and Chile, and 47 percent is smelted in China), lithium (of which 60 percent is processed in China) and cobalt (of which 70 percent is produced in the Democratic Republic of Congo). By giving unreliable sources and competitors significant leverage over the U.S. automobile industry, this rule will make America less secure.
Finally, the rule rests on dubious legal authority. The Clean Air Act does not specifically regulate carbon dioxide, nor does it give the EPA the authority to require that automakers sell a specific number of EVs. And the Biden administration did not have the votes to pass such a sweeping EV mandate in Congress — even when Democrats controlled both houses. But by setting such stringent fleetwide carbon dioxide emissions requirements in such a tight time frame, the EPA is effectively forcing automakers to radically ramp up EV production as the only way to comply.
This forced remaking of the U.S. automotive industry may not stand up in court, just as the Obama and Biden teams’ attempted remaking of the U.S. electric utility industry did not. To quote the Supreme Court’s majority opinion in that matter (West Virginia v. EPA), this may be a case of the EPA trying “to adopt a regulatory program that Congress had conspicuously declined to enact itself.”
The administration will claim that the rule merely sets an ambitious standard for the fuel efficiency of the entire fleet in a given year. But the EPA’s own projections estimated that 67 percent of new light duty vehicles sold in 2032 — nine years away — would be electric under the proposed rule. By comparison, EVs made up just 5.8 percent of new car sales in the United States last year.
One lesson of the 1990 Clean Air Act — whose benefits far exceeded its costs — is that it largely let the market, aided by technological innovation, come up with the most efficient ways to reduce emissions as required by law. This new rule would cast that measured approach aside, put the economy and national security at risk, and pile new costs on the American consumer.