Canada launches consultation on vehicle emissions regulations under cloud of Trump rollbacks

pick up truckOn August 20, Canada’s Minister of Environment and Climate Change published a Discussion Paper  to launch consultations on the mid-term evaluation of Canada’s light-duty vehicle greenhouse gas emission regulations for the 2022–2025 model years.  Public comments may be submitted to ec.infovehiculeetmoteur-vehicleandengineinfo.ec@canada.ca by September 28, 2018. Once comments have been reviewed, if the government determines that regulatory changes are needed, it promises a second consultation period.  One of the first off the mark with a response: Clean Energy Canada, with “Canada should explore stronger vehicle standards to cut pollution and enhance competitiveness” .

The mid-term review is required by the 2014 regulations under which Canada currently operates, but it comes at a time when Canada must decide whether to continue to align its fuel efficiency standards with the U.S., as it has done for 20 years, or follow its own path.  The current Canadian trajectory is shaped by our GHG reduction commitments under the Paris Agreement, the Pan-Canadian Framework for Clean Growth and Climate Change  , and a 2017 commitment  to develop a  national Zero-Emissions Vehicle Strategy by 2018.

But in the  U.S. ,  on August 2, the Trump administration announced the Safer Affordable Fuel Efficient Vehicle Rule (SAFER) , which proposes weakening the EPA’s greenhouse gas emissions standards and Department of Transportation’s Corporate Average Fuel Economy (CAFE) standards for light duty vehicles in model years 2021 through 2025. The proposed rule  would also revoke a legal waiver which allows California and 13 other states to set their own pollution standards. Based on arguments made in the document  Make Cars Great Again , published by the Wall Street Journal, the Trump plan claims it will save $500 billion in “societal costs,” avert thousands of highway fatalities and save consumers an estimated $2,340 on each new automobile.   Most of the Administration’s arguments are refuted in  “Five Important points about the Safe Vehicle Rule”  by the Sabin School of Law at Columbia University. Other critiques: from Vox: “Trump is freezing Obama’s fuel economy standards. Here’s what that could do”  (Aug. 2); and “The EPA refuted its own bizarre justification for rolling back fuel efficiency standards” (Aug. 16);  “Trump administration to freeze fuel-efficiency requirements in move likely to spur legal battle with states” in the Washington Post (Aug. 2)  ; “Trump’s Auto Efficiency Rollback: Losing the Climate Fight, 1 MPG at a Time” by Inside Climate News (Aug. 2) .

What should Canada do? Technical analysis comes in   Automobile production in Canada and implications for Canada’s 2025 passenger vehicle greenhouse gas standards, released by the International Council on Clean Transportation in April 2018, which analyzes the Canadian vehicle manufacturing market and sales patterns and describes the possible impacts if Canada  aligns weakens its greenhouse gas emission standards with the Trump administration,  or maintains its existing standards and aligns with California.  Other opinions: From Clean Energy Canada on Aug. 2 ,  “Canada should hold firm and reject Trump’s efforts to roll back vehicle standards” ;  or “On vehicle emissions standards It’s time Canada divorced the United States”   in Policy Options (April 2018); and  “Trump’s plan to scare Americans into supporting car pollution” in the National Observer (Aug. 7) .

EPA roll back of fuel economy standards and what it means for Canada

pick up truckOn April 3, the U.S. Environmental Protection Agency announced its decision  in a midterm evaluation of the fuel-economy standards for light vehicles manufactured in 2022-2025.  EPA Administrator Scott Pruitt issued his  Final Determination , supported by  a 38-page analysis – which overturned the evidence of a 1,200-page draft Technical Assessment Report completed under President Obama in 2016. This opens up the uncertainty of a new rule-making process, with vehement opposition from the State of California, which is entitled to set its own emissions standards, as well as other players in the U.S., including  over 50 mayors and state Attorney Generals from across the U.S., who issued their own  Local Leaders Clean Car Declaration  . The Declaration  states: “ Whatever decisions the Administration may make, we are committed to using our market power and our regulatory authority to ensure that the vehicle fleets deployed in our jurisdictions fully meet or exceed the promises made by the auto industry in 2012.”  Within the auto industry, parts-makers represented by the Automotive Technology Leadership Group (including the  Motor & Equipment Manufacturers Association, the Manufacturers of Emission Controls Association, and the Aluminum Association)  support the existing standards .  The Alliance for Automobile Manufacturers  trade group, which represents Toyota, Ford, General Motors, Fiat Chrysler, BMW, Mercedes, and Volkswagen, have pushed for lower standards since the Trump inauguration.

All of this matters for Canada for at least two reasons:  1).  95% of vehicles manufactured in Canada are exported to the U.S., and thus our fuel emissions regulations have been developed in collaboration with the U.S. EPA – most recently to govern production for  2017 – 2025 models, and 2).  transportation represents the 2nd highest source of emissions in Canada.  The WCR surveyed  Canadian reaction in March 2017, when Donald Trump first authorized the EPA review.  Now, with the decision published, recent reaction appears in  “Canada in tough position if  Trump Administration lessens vehicle standards”  in the Globe and Mail (April 1);  the National ObserverScott Pruitt delivers another Trump-era shock to Canada’s climate change plan” ( April 2) ;  “Trump’s fuel economy rollback leaves Trudeau in a bind: Follow the U.S., or take a stand” (April 3)  in the Toronto Star , which quotes the the Canadian Vehicle Manufacturers’ Association, as saying  that “both Canadian consumers and climate efforts could be harmed if Trudeau decides to maintain a higher standard for Canada than Trump does for the U.S.” .   Unifor, representing most Canadian auto workers, has not issued a reaction yet, although president Jerry Dias was quoted in March 2017 in “ Auto workers union takes aim at Trump’s examination of fuel standards” in the Globe and Mail, stating that he “would fight any attempt to roll back environmentally friendly regulations in the auto industry ”.

For well-informed U.S. reaction, see  “Stronger fuel standards make sense, even when gas prices are low ” in The Conversation; “Why EPA’s Effort to Weaken Fuel Efficiency Standards Could be Trump’s Most Climate-Damaging Move Yet” in Inside Climate News (April 2 ) ;  from the American Council for an Energy- Efficient Economy “EPA fails to do Its homework on light-duty standards” ;  and  “Auto Alliance Pushed Climate Denial to Get Trump Admin to Abandon Obama Fuel Efficiency Standards”  in  DeSmog  (April 2).

 

 

 

 

 

Ontario investing in transit, vehicle R & D

GO transit stationOn March 31, the Government of Ontario announced  that it will invest  $13.5 billion in the GO Regional Express Rail  project – expanding the existing GO commuter rail system in the Toronto-Hamilton area by building 12 new stations and  increasing  the frequency of service. This expansion will also include  creating a “transportation hub” at  the western terminus of the Toronto subway, according to a subsequent announcement on April 3 .  The goal is to increase the number of weekly trips across the GO train network from 1,500 today to roughly 6,000 by 2025.   The federal government will also contribute more than $1.8 billion to the GO Transit Regional Express rail project, using  funds from the Harper-era  New Building Canada Fund – Provincial-Territorial Infrastructure Component.   A further $200 million has been committed to 312 projects across Ontario through the Public Transit Infrastructure Fund  . Click here  for a list of Ontario projects. Click here for the corporate explanation of the Regional Express Rail project.

Newmarket – a bedroom community of the Toronto area – announced  on March 27 that it will be part of  the Pan-Ontario Electric Bus Demonstration and Integration Trial, joining another GTA suburb, Brampton, already enrolled.  Newmarket will purchase six electric powered heavy-duty transit buses – four  from New Flyer Industries of Winnipeg, Manitoba and two more from Nova Bus, of St. Eustache, Quebec. Overhead-charging stations will be designed and manufactured by Siemens and ABBGroup. The local utility,  Newmarket-TayPower Distribution Limited, will  purchase and operate an on-route charging station.  The initiative is the result of a partnership between the municipality, the utility, and the Canadian Urban Transit Research and Innovation Consortium (CUTRIC)  , incorporated in August 2014 to support industry-academic collaborations to develop next generation technologies for Canadian transit and transportation systems.

In another press release , the government of Ontario announced a joint partnership with the federal government and Ford Motor Company of Canada, providing Ford with a conditional grant of up to $102.4 million to establish an advanced manufacturing program at its Windsor plant. According to the press release, “the investment will create 300 new jobs at Ford operations in Ontario and protect hundreds more.”  Ford will also establish a Research and Engineering Centre in Ottawa, employing engineers and scientists  to focus on infotainment, in-vehicle modems, gateway modules, driver-assist features and autonomous vehicles.

Canada’s Budget 2017: A closer look at what matters for a green economy

infrastructure from Budget 2017Canada’s federal budget statement, titled Skills, Innovation and Middle Class Jobs, was released on March 22, with a stated  commitment to the Pan-Canadian Framework on Clean Growth and Climate Change, and support for already-announced climate initiatives .  Some specific allocations: $11.4 million over four years for a national coal phase-out, beginning in 2018; $17.2 million over five years for a national clean fuels standard, starting in 2017;  $5 billion to green infrastructure and an additional $5 billion for public transit infrastructure over 11 years.  Disappointingly, the Budget extends the Mineral Exploration Tax Credit for another year, thus failing to end fossil fuel subsidies.

Reflecting their own particular interests, most unions issued immediate reactions:  see the Canadian Labour Congress ; Canadian Union of Public Employees ; United SteelworkersUnifor . In the Toronto Star, Paul Wells called the Budget “a list of decisions to be made later”, and most commentators remarked on the many deferred deadlines.  A March 22 blog by Hadrian Mertins-Kirkwood of the CCPA provides a thorough summary of the provisions relating to climate change policy,  noting that the phrase “climate change” is used 50 times, but  “when it comes to putting Canada on a pathway to deep decarbonization, Budget 2017 comes up short. Significant investments in key areas, such as public transit and clean technology, should not be dismissed out of hand, but the funds are heavily backloaded and too small given the scale and urgency of the climate challenge.”  Mertins-Kirkwood also notes that there are no direct measures to support Just Transition programs, although provisions to improve skills training , workforce development, and small changes to the Employment Insurance program may indirectly contribute to that goal.

Two thoughtful  analyses of the Budget have since been released: on March 24, the Canadian Labour Congress released its Detailed Analysis of Budget 2017, providing an overall assessment, but including a substantial consideration of provisions relating to a green economy.  CLC Highlights: “The Canada Infrastructure Bank will be resourced with $2.8 billion over five years; legislation creating the Bank is anticipated in spring 2017. In the weeks and months following the budget, the Government of Canada will work on a framework to apply a green lens and an employment-based community benefit lens to infrastructure projects, which may become part of the bilateral infrastructure agreements.”  Regarding “Transition to a Green Economy”:  “In Budget 2017, investments in 2017-18 and 2018-19 under the $2 billion Low-Carbon Economy Fund …are scaled back and re-allocated for future years. Budget 2017 offers $2 billion for a Disaster Mitigation and Adaptation Fund, administered through Infrastructure Canada. The budget allocates $220 million to reduce the reliance of rural and remote communities on diesel fuel, and to support the use of more sustainable, renewable power solutions. An array of investments are made in order to support the development of the clean tech industry in Canada. In 2016, Canada joined other G-20 countries in re-committing to phase out fossil-fuel subsidies by 2025. The budget contains two modest proposals to scale back fossil fuel subsidies, but no specific concrete commitments are made to comply with the 2025 deadline.  Budget 2017 provides funds to accelerate the coal phase-out in Alberta, but it is unclear whether there will be funding to deal with the impacts on workers and communities. There is no explicit mention in Budget 2017 of just transition measures, or the government’s proposed just transition task force.”

On  March 27, the Pembina Institute released  Budget 2017: Ready, set implement  which offers its reaction and further suggestions on three issues.  Acknowledging the scale of investment and the importance of consultation, particularly with First Nations, Pembina declares, ” in our view, it’s not unreasonable that the $2 billion Low Carbon Economy Fund has been altered to extend over five years.”   Regarding “Next steps on the National Carbon Price”, Pembina applauds the details provided re the  national carbon price backstop — “set to begin at $10 per tonne of carbon pollution in 2018, and to escalate by $10 per year until 2022.”  Pembina also highlights the announcement of a federal government consultation paper with technical details of the national carbon price, promised in 2017. It urges that the national carbon benchmark price be linked to inflation, be subject to a review in 2020, and that the government design a fair and transparent framework for that review well in advance.

Finally, in “Accelerating decarbonization of goods movement”, Pembina notes the Budget’s commitments to new clean fuel standards and heavy-duty truck retrofit regulations, as well as the allocation of $2 billion over 11 years in a new National Trade Corridors Fund to address congestion and inefficiencies in rail and highway corridors, especially  around the Greater Toronto Area . They re-state their proposal for  North America’s first low-carbon highway between Windsor and Quebec City, based on  building out an “alternative fuelling infrastructure — like electric vehicle fast-charging, compressed natural gas or hydrogen stations — for personal and commercial transportation along the route.”

 

 

 

 

 

Reaction from Canada, California as Trump attacks Obama fuel emissions standards

solar-power-1020194_1920The rest of the world is driving towards new technologies, but U.S. state governments are rolling back EV incentives   and  on March 15,  Donald Trump took the U.S. a further  step away from reducing  transportation emissions.  Following pressure from U.S. auto companies, and in the name of creating American jobs and reviving American manufacturing,  the White House announced that the EPA and the National Highway Traffic Safety Administration (NHTSA) will re-open the evaluation of the  Corporate Average Fuel Economy (CAFE) and greenhouse gas emissions (GHG) standards for light-duty vehicles manufactured in 2022- 2025 .  Never mind that the EPA, in the waning days of the Obama presidency in January 2017, had already issued its official  Determination  to leave the standards in place, stating that they  “are projected to reduce oil consumption by 50 billion gallons and to save U.S. consumers nearly $92 billion in fuel cost over the lifetime of MY2022-2025 vehicles”, with minimal employment impacts.  The New York Times   compiles some of the U.S. reaction to the announcement, quoting Harvard’s Robert Stavins, who states that rolling back the Obama-level regulations would make it  impossible for the United States to meet its obligations under the Paris Agreement.   A sample of  U.S. concerns appear in:   “Trump Fuel economy rollback would kill jobs and cost each car-buyer $1650 per year “ by Joe Romm in  Think Progress ; DeSmog BlogTrump Takes Aim at Fuel Efficiency Requirements, Prompting Concern US Automakers Will Lag on Innovation”   ; and the Detroit Free Press,  reporting on a lead-up Trump speech in Ypsilanti, Michigan ,  “Trump visit puts UAW politics in crosshairs”  http://www.freep.com/story/money/business/2017/03/14/trump-visit-puts-uaw-politics-crosshairs/99165906/    (March 14). The Detroit Free Press  states that autoworkers were bused in to the Trump event by their employers, with Fiat Chrysler and General Motors offering their workers a day’s pay as well.  No immediate reaction to the announcement came from the United Autoworkers union, although  the DFP article states: “UAW President Dennis Williams has repeatedly said he disagrees with Trump on health care, immigration, the environment and most other major issues. But Williams supports Trump’s desire to renegotiate the North American Free Trade Agreement (NAFTA) …..”

In Canada, where Unifor represents autoworkers,  president Jerry Dias spoke out  in “ Auto workers union takes aim at Trump’s examination of fuel standards ” in the Globe and Mail (March 16), and in a CTV News report . He  states that “ he would fight any attempt to roll back environmentally friendly regulations in the auto industry following Trump’s announcement”. Canada’s Minister of Environment and Climate Change was in Washington on March 15th,  meeting with EPA head Scott Pruitt, but her reaction was guarded and diplomatic,  as reported in “As Trump eyes reprieve for gas guzzlers, Canada looks to China  ”  in the National Observer and in “Trump targets fuel-efficiency standards” in the Globe and Mail  (March 16).  Traditionally, Canadian  fuel emissions standards have been harmonized with the U.S. , as a result of the strongly integrated auto industry.  For example, at the end of February, Canada released  its proposed regulations for heavy-duty vehicles, and according to the International Council on Clean Transportation, Canada continued to follow the  U.S. model.  Similarly,  Ontario announced a Memorandum of Understanding on auto manufacturing with the state of  Michigan on March 13, pledging cooperation on regulatory standards as well as technology  and supply chain management.

Harmonization will be more difficult after Trump’s announcement on March 15, just as Canada and Ontario are reviewing their own revisions to fuel emissions regulation . Ontario reacted to the Trump  announcement with a  pledge to continue to cooperate with California and Quebec in the Western Climate Initiative – read “Ontario plans to team up with California against Trump on climate change” in the National Observer (March 16). California won the right to set its own fuel emission standards in the 1970’s, and today, fifteen other states voluntarily follow  California’s tougher standards, including Georgia, Pennsylvania, North Carolina, and the New York metropolitan area – translating into more than 40% of the U.S. population.  “The Coming Clean-Air war between Trump and California” in The Atlantic surveys this  latest conflict between California and the Trump administration .  A press release from Governor Gerry Brown called the fuel standards  announcement  “a cynical ploy” that puts politics ahead of science, and pledged that California will fight it in court.

Low Carbon Fuel Standards vs. Renewable Fuel Standards

A new report from Smart Prosperity (formerly Sustainable Prosperity) contrasts the advantages and features of a Renewable Fuel Standard –  in force federally and in five provinces – with a Low Carbon Fuel Standard, in force in Canada only in British Columbia . The discussion is timely, given that the federal government and the province of Ontario are both considering Low Carbon Fuel Standard policies. In “ How a Low Carbon Fuel Standard could reduce your GHG footprint without you even noticing”,  Smart Prosperity answers “what it is” and “what it does” questions;  its Policy Brief   discusses the complex questions of policy design, “ particularly around regional impacts, equity concerns, cost effectiveness, and innovation impacts”.  Read also the Ontario Discussion paper: Developing a modern renewal fuel standard for gasoline in Ontario   . The federal government posted a  clean fuel standard Backgrounder  about its goals (November 2016), which include using life cycle analysis of fuel production, and  extending coverage beyond transportation fuels.  Other jurisdictions which use a LCFS include California, Oregon,  and the state of Washington.

UPDATE:  On February 23, Friends of the Earth released a discussion paper, Working Towards A Clean Fuel Strategy for Canada:Key QuestionsThe subtitle says a lot:  How to make a Canadian Clean Fuel Strategy more than a cosmetic exercise to sanitize the image of the oil industry. Noting that  Environment and Climate Change Canada has provided only vague information so far in its consideration of the Low Carbon Fuel Standard,  Friends of the Earth states its concern that an inadequate policy could greenwash the use of fossil fuels and thus prolong their use ,  rather than supporting a just transition off fossil fuels and  stimulating the development of alternative fuels.   The discussion paper is a thorough  review of past experience with biofuel and ethanol policies .

Recommendations to change the U.S. Social Cost of Carbon, and possible impact for Canada

The U.S. National Academies of Science Press released an important report in January 2017, suggesting changes to the methodology of the Social Cost of Carbon (SCC), an economic metric used to measure the net costs and benefits associated with the effects of climate change- including changes in agricultural productivity, risks to human health, and damage from extreme weather events.  U.S. government  agencies such as the Environmental Protection Agency  are required by law  to estimate SCC when  proposing regulations such for vehicle emission standards or energy efficiency standards for appliances.  One of the most recent, thorough, and important applications of the U.S. Social Cost of Carbon appears in the 2015  Regulatory Impact Analysis Report for the Clean Power Plan Final Rule.    The U.S. updated the SCC to $37 U.S. per tonne of carbon dioxide in September 2015, a value often criticized as too  low, and economists continue to differ about the methodology.  A study by researchers at Stanford University, published in Nature Climate Change  (2015) estimated a more accurate  SCC of $220 per tonne – six times higher.

The January  report from the National Academy of Science, Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide  , suggests restructuring the Integrated Assessment Models framework used to ensure greater transparency, and  recognizes new research  which should be incorporated into the  models (e.g. the effect of heat waves on mortality) . It also recommends a regular 5-year updating schedule,  “to ensure that the SC- CO2 estimates reflect the best available science.”  For a summary of proposed changes and the political context, see “Scientists have a new way to calculate what global warming costs. Trump’s team isn’t going to like it” in the Washington Post  . Noting that the new report has no legal force, The Post article quotes expert reviewer Richard Revesz, Dean emeritus of the New York University School of Law: “If the metric is revised, then the incoming administration would have an obligation to explain why it’s departing from the current approach… Any changes made without adequate scientific justification would likely be struck down in court.”   But see also “How Climate Rules might Fade away”     in Bloomberg Business Week.

What are the implications for Canada?  Canada, like the U.K., Germany, France, and other countries, already uses its own Social Cost of Carbon, pegged at a $28 per tonne in 2012, according to  Canada’s  Regulatory Impact Analysis Statement issued with the vehicle emissions regulations for passenger cars and light trucks.  The Leaders Statement from the North American Leadership Summit in Summer 2016 ,  ties Canada more closely to U.S. and Mexico, when it pledges to “ … align analytical methods for assessing and communicating the impact of direct and indirect greenhouse gas emission of major projects. Building on existing efforts, align approaches, reflecting the best available science for accounting for the broad costs to society of greenhouse gas emissions, including using similar methodologies to estimate the social cost of carbon and other greenhouse gases for assessing the benefits of policy measures that reduce those emissions.”

Emissions Standards Could Drive Job Creation in European New Vehicle Technology

A new report by consulting firm Cambridge Econometrics and Ricardo-AEA forecasts that 350,000-450,000 new jobs will be created if stricter carbon dioxide emissions standards for new cars and vans are implemented across Europe. Details of new regulations and targets are being debated, with German manufacturers at odds with those in France and Italy; Germans believe they would be at a disadvantage because of the bigger cars they produce. See An Economic Assessment of Low-carbon Vehicles at: http://www.ricardo-aea.com/cms/assets/MediaRelease/Economic-Assessment-Vehicles-FINAL2.pdf.