Analysis in Support of Comments of the California Air Resources Board on the Safer Affordable

415 Pages·2017·3.84 MB·English

Analysis in Support of Comments of the California Air
Resources Board on the Safer Affordable Fuel-Efficient
(SAFE) Vehicles Rule for Model Years 2021-2026 Passenger
Cars and Light Trucks
Docket ID: EPA-HQ-OAR-2018-0283; NHTSA-2018-0067;
NHTSA-2017-0069

October 26, 2018
Table of Contents
I. Introduction ............................................................................................................... 18
II. Summary of the analysis. ......................................................................................... 18
III. CARB has consistently led the nation in regulating emissions from motor vehicles. . 23
A. The nation’s control of motor vehicle pollution began in California. ....................... 26
B. Early federal and California control of motor vehicle emissions recognized the role
of both authorities. ..................................................................................................... 27
1. The Federal Motor Vehicle Air Pollution Control Act was enacted in 1965. ....... 27
2. To balance national consistency with state sovereignty to protect public welfare,
congress expressly preserved only California’s authority to control motor vehicle
emissions. .............................................................................................................. 28
3. California obtained its first waiver in 1968. ......................................................... 30
4. California continued its progress with the Pure Air Act of 1968 and emissions
standards for the 1970 model year. ........................................................................ 30
5. Federal motor vehicle emissions standards for 1970 adopted California’s
standards. .............................................................................................................. 31
C. Federal and California air pollution law developed in the 1970s. .......................... 32
The Clean Air Act was amended in 1970. ..................................................... 32
CARB and EPA adopted exhaust emission standards for 1973 and
subsequent model year light-duty vehicles. ........................................................... 33
Vehicle manufacturers requested and were granted suspensions of statutory
federal 1975 hydrocarbon and carbon monoxide emission standards. .................. 34
EPA suspended the 1976 statutory standard for NOx. ................................. 36
The national energy crisis led Congress to delay the statutory 1975 and 1976
exhaust emission standards until 1977 and 1978. ................................................. 37
Congress enacted the Energy Policy and Conservation Act (EPCA) in 1975,
building upon the foundation laid by ESECA. ......................................................... 37
EPA suspended hydrocarbon and carbon monoxide emission standards for
1977 model year vehicles for one year. ................................................................. 38
EPA granted the waiver for California’s 1977 model year emission standards,
recognizing the statutory directive to defer to California. ........................................ 39
Congress, in 1977, amended the Clean Air Act. ........................................... 40
D. California continued to lead the nation in developing more stringent motor vehicle
emission requirements throughout the 1980s. ........................................................... 44
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1. California’s motor vehicle emission standards for 1982 model year light-duty
vehicles required compliance with a 0.4 g/mi NOx emission standard. .................. 44
2. CARB adopted diesel particulate matter standards for 1985 model year
diesel-fueled light-duty vehicles. ............................................................................ 45
3. California required On-Board Diagnostic (OBD) systems. ............................ 47
E. Congress strengthened the Clean Air Act in 1990................................................. 49
F. California’s Advanced Clean Cars Program brought together comprehensive
emission control and advanced technology to maximum benefit. .............................. 50
1. The ACC program included criteria emissions standards. ............................ 51
Greenhouse gas emissions standards. ......................................................... 52
The Zero Emission Vehicle regulation. ......................................................... 58
G. California’s separate Motor Vehicle Emissions Control Program has delivered
great benefit to the nation. ......................................................................................... 60
1. Increasingly stringent emission controls on new motor vehicles benefit the
nation. .................................................................................................................... 60
2. California’s Motor Vehicle Emissions Control Program has significantly
improved California’s air quality. ............................................................................ 61
3. California’s continued compliance with state and federal mandates requires
its robust vehicle program. ..................................................................................... 67
4. Mobile source emissions are a big part of the problem. ................................ 67
IV. NHTSA and EPA must improve fuel economy and reduce GHG emissions, and thus
must maintain or strengthen the existing standards. ........................................................... 69
The existing harmonized national program is a success. ................................. 70
The current federal administration broke the existing national program illegally
and without valid basis. .............................................................................................. 70
NHTSA and EPA’s proposed approach improperly abdicates statutory
directives. .................................................................................................................. 72
EPA’s proposal is entirely inconsistent with its statutory mandate. ............... 74
2. NHTSA’s proposal is inconsistent with the overriding mandate of EPCA to
maximize the fuel efficiency of new motor vehicles. ............................................... 78
3. There is no demonstrated basis to adjust compliance flexibilities that are
working to reduce emissions, provide manufacturers with incentives to innovate,
and create jobs....................................................................................................... 80
The Agencies have not justified departing from their prior determinations or
met their obligations for a reasoned analysis, and are not entitled to deference. ... 81
5. The federal Agencies have not made the case for change. .......................... 92
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V. The technology analysis is unfounded. ..................................................................... 93
The Agencies made incorrect engine assumptions contrary to publically
available information. ................................................................................................. 94
1. The Agencies inappropriately limit known engine technologies, such as high
compression ratio engines (HCR1). ....................................................................... 96
2. The Agencies place unnecessary limitations on emerging engine technology.
99
The Agencies did not adequately consider other GHG-reducing vehicle
technologies. ........................................................................................................... 110
1. The Agencies made incorrect and inconsistent assumptions on vehicle
transmissions. ...................................................................................................... 110
3. The Agencies underestimated aerodynamic improvements. ...................... 113
4. The Agencies incorrectly and overly limited mass reduction. ...................... 114
5. The Agencies should keep air conditioning efficiency and leakage credits. 120
The Agencies inflated electrification costs to be excessive and unrealistic. ... 122
1. The Agencies’ assumptions for non-battery components for electrified
vehicles were non-descriptive and incorrect. ....................................................... 127
2. The Agencies’ battery assumptions were inadequate. ................................ 137
3. The Agencies made erroneous electric vehicle assumptions. .................... 145
4. The CAFE Model shows over-compliance without any reasonable basis. .. 164
5. The Agencies failed to choose appropriate technology packages. ............. 166
6. The Agencies did not conduct a performance-neutral analysis. .................. 177
7. Modeling errors were exaggerated for electrified technology packages. .... 185
D. The Agencies’ vehicle analysis is counter to the state of the art. ........................ 187
VI. The Fleet Impact Assessment is nonsensical, disconnected from empirical data and
established theory............................................................................................................. 188
The New Vehicle Sales Model is flawed. ....................................................... 190
The modeling logic is flawed. ...................................................................... 191
Any remaining weaknesses in the market demonstrate the need for
regulation. ............................................................................................................ 212
The Agencies’ dynamic new sales response modeling is conceptually flawed
and mathematically invalid. .................................................................................. 216
The Fleet Share Model is not based on reasonable assumptions. ............. 222
In summary, the new vehicle sales model should be rejected. ................... 225
The “Dynamic Scrappage” Model relied upon is flawed. ................................ 226
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The modeling is illogical and the outputs are wrong. .................................. 226
The input assumptions have no basis. ........................................................ 241
The Dynamic Scrappage Model also has core structural flaws. .................. 242
In summary, the dynamic scrappage model should be rejected. ................ 249
The CAFE Model asserts an exaggerated, unfounded rebound effect. .......... 250
The rebound effect is overestimated. .......................................................... 251
The rebound analysis fails to account for travel demand. ........................... 254
The CAFE Model improperly considers the rebound effect. ........................ 256
The federal analysis wrongly attributes fatalities from rebound to the
standards. ............................................................................................................ 257
In summary, the Agencies wrongly consider the rebound effect. ................ 258
D. The Agencies’ fatality analysis is flawed and wrong............................................ 258
1. There are pervasive flaws in the Agencies’ assessment regarding the impacts
of CAFE and GHG standards on vehicle safety. .................................................. 259
2. The Agencies are wrong about scrappage and rebound fatalities. ............. 260
3. The Agencies are wrong about fatalities from mass reduction. ................... 266
4. NHTSA should apply its tools for directly improving highway safety. .......... 279
5. In summary, the Agencies wrongly conclude the existing standards will cause
highway fatalities. ................................................................................................. 281
VII. The federal proposals undermine public health and impose major costs on California
and the public. .................................................................................................................. 282
The federal proposal increases emissions, frustrates meeting the NAAQS,
harms public health, and threatens the climate. ...................................................... 282
1. The federal proposal increases criteria emissions and undermines state
implementation plans and modeling. .................................................................... 282
2. The federal proposal increases community exposures to air pollution. ....... 294
3. Increasing ZEVs are essential to improving the health of those living near
major roadways. ................................................................................................... 299
4. Reducing near-term exposures must be addressed in part by increasing use
of ZEVs. ............................................................................................................... 300
5. The significant climate impacts of motor vehicle emissions compel reductions.
303
6. California and the nation must reduce greenhouse gas emissions from motor
vehicles and promote zero-emission vehicles. ..................................................... 308
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The assumed social cost of carbon in the federal proposal is wrongly
discounted. .............................................................................................................. 309
1. The federal proposal fails to use the best available science. ...................... 311
2. The decision to utilize a “domestic perspective” to calculate social cost is
arbitrary and capricious. ....................................................................................... 311
3. Presenting discount rates of only 3 percent and 7 percent is inappropriate.313
4. Potential updates to the best available science all point towards a higher, not
lower, social cost of carbon. ................................................................................. 314
Energy production and security considerations compel maintaining the existing
fuel economy standards. .......................................................................................... 316
1. The U.S. economy will be adversely impacted because it will be a net energy
exporter. ............................................................................................................... 317
2. Consumer costs will increase even if there is a claimed overall benefit –
which there is not. ................................................................................................ 319
3. The U.S. economy will be impacted by global oil prices. ............................ 321
4. Energy and national security will be impacted by the increase in demand for
oil. 324
VIII. The federal Agencies’ Macroeconomic Impact Analysis understates the negative
effects of the proposal. ..................................................................................................... 326
The analysis fails to adequately analyze gross domestic product impacts. .... 328
The analysis fails to adequately analyze employment impacts. ..................... 328
Equity and affordability are harmed by the proposed rollback. ....................... 329
IX. When properly analyzed, the cumulative effects of the proposed rollback are
profoundly damaging. ....................................................................................................... 330
X. EPA’s proposed revocation of California’s waiver for its GHG and ZEV standards is
unlawful. ........................................................................................................................... 336
Introduction .................................................................................................... 336
Background .................................................................................................... 337
EPA lacks authority to revoke a previously granted waiver. ........................... 339
1. The plain text and statutory framework of the Clean Air Act establish that EPA
has no authority to revoke a previously granted waiver. ...................................... 339
2. Legislative history confirms the absence of authority to revoke. ................. 343
If EPA has any implicit authority to revoke waivers, that authority is very limited,
and the conditions for it do not exist here. ............................................................... 344
1. EPA’s proposed revocation is unlawfully premised on the agency’s
reinterpretation of the law. .................................................................................... 345
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2. The other bases EPA asserts also provide no lawful support for the proposed
revocation. ........................................................................................................... 347
Any limited authority to revoke California’s waiver must also follow a lawful and
adequate process, but EPA has not done so. .......................................................... 348
EPA’s proposed conclusion that it must withdraw California’s waiver is
unfounded and unlawful. .......................................................................................... 349
EPA’s proposed findings under Section 209(b)(1)(B) are unlawful. ............... 350
1. EPA’s proposed interpretation of “such State standards” in Section
209(b)(1)(B) is unambiguously foreclosed and unreasonable. ............................. 350
2. EPA’s proposed interpretation of “compelling and extraordinary conditions” to
exclude GHGs and Climate Change is also unambiguously foreclosed and
unreasonable. ...................................................................................................... 357
3. California’s need for its separate Motor Vehicle Control Program does not
require that an individual standard will materially affect its air pollution problems or
that California vehicles are the primary cause of the problem. ............................. 363
4. The proposed revocation is arbitrary and capricious and otherwise unlawful
under the proper “whole program” interpretation of Section 209(b)(1)(B). ........... 365
5. EPA’s proposed revocation of California’s waiver is arbitrary and capricious
and otherwise unlawful even if EPA looks at the GHG and ZEV standards rather
than California’s whole program. .......................................................................... 366
EPA’s proposal to find that California’s ZEV and GHG standards are
inconsistent with Section 202(a) is unlawful. ........................................................... 373
1. EPA’s interpretation of Section 209(b)(1)(C) is unambiguously foreclosed and
unreasonable. ...................................................................................................... 374
2. Confusion of EPA’s own making, and conclusory statements, do not support
EPA considering costs. ........................................................................................ 375
3. EPA’s analysis implicitly applies a new interpretation of Section 209(b)(1)(C),
and that interpretation is impermissible and unreasonable. ................................. 376
4. EPA’s proposed finding under Section 209(b)(1)(C) is arbitrary and capricious
because it is not based on any proper factual support. ........................................ 380
5. California’s GHG and ZEV standards are feasible and, therefore, consistent
with Section 202(a). ............................................................................................. 383
In sum, EPA may not revoke California’s waiver for its GHG and ZEV
requirements. ........................................................................................................... 387
XI. EPCA preemption is improper. ............................................................................... 388
NHTSA’S discussion of preemption and its proposed regulatory text are ultra
vires and unwarranted. ............................................................................................ 388
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Congress has not delegated NHTSA authority to determine whether a state’s
law is expressly preempted. ................................................................................. 389
NHTSA’s Proposed Finding of Conflict Preemption is Premature, Cursory,
Outside the Agency’s Expertise and Erroneous. .................................................. 389
EPCA does not expressly preempt California’s standards. ............................ 391
EPCA does not preempt standards for which California has obtained a waiver
under Section 209 of the Clean Air Act. ............................................................... 392
Tailpipe GHG standards are not “related to fuel economy standards.” ....... 404
ZEV mandates are not “related to fuel economy standards.” ...................... 406
XII. NHTSA has not met its obligations under the National Environmental Policy Act. .. 409
XIII. NHTSA and EPA failed to meet multiple attendant obligations. .............................. 410
The Agencies failed to consult under the Endangered Species Act. .............. 411
The rollback is not consistent with California’s programs to protect its coast
against the effects of climate change. ...................................................................... 411
NHTSA and EPA failed to consult under the National Historic Preservation Act.
411
NHTSA and EPA have arbitrarily dismissed the environmental justice impacts
of the rollback. ......................................................................................................... 411
NHTSA and EPA failed to consult Native Tribes. ........................................... 412
The rollback will exacerbate floods, impair wetlands, and adversely impact
wildlife, fish, and migratory birds. ............................................................................. 413
EPA violated the Environmental Research Development Demonstration Act. 413
XIV. The rollback proposal is wrong on the facts, wrong on the law, offends our
constitutional structure, and must be withdrawn. .............................................................. 413
XV. Expert Reports Attached ........................................................................................ 414

Table III-1 California Exhaust Emissions Standards for 1970 through 1973 Model Year
Light-Duty Motor Vehicles ............................................................................................. 31
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Table III-2 1977 through 1981 Primary Light-Duty Motor Vehicle Emission Standards . 43
Table III-3 Comparison of Exhaust Emissions from an Uncontrolled Vehicle and MY
2025 LEV III SULEV20 Certification Standards ............................................................. 60
Table V-1 (Table 2-6, From Duleep’s Report) Comparison of Technology Penetration to
Meet MY 2025 standards from Agency Studies ............................................................ 95
Table V-2 (Table from Duleep’s Report) Summary of Corrected Estimates .................. 96
Table V-3 Comparison of Average Incremental Tech Costs ($) for Existing Standards
and Proposed Rollback when changing HCR1 restrictions ........................................... 98
Table V-4 Comparison of example pathways in NPRM and modeling done by G. Rogers
.................................................................................................................................... 103
Table V-5 (Table 3-6 from Duleep’s Report) Engine Technology Benefits (percent GHG
Reduction*) ................................................................................................................. 106
Table V-6 (Table 3-8 from the Duleep’s report) ........................................................... 113
Table V-7 percent Glider Mass Share by Year and Vehicle Classification .................. 115
Table V-8 (Table 2.14 from 2017 Proposed Determination TSD) Examples of Mass
Reduction in Selected Recent Redesigns (Compared to MY2008 Design) ................. 116
Table V-9 Summary of Agencies Sponsored Mass Reduction Studies ....................... 117
Table V-10 Summary of Electric System Data Sources .............................................. 128
Table V-11 Summary of Data Source Vehicle Model Year .......................................... 128
Table V-12 Comparison of chemistries: Draft TAR, Proposed Determination, NPRM 141
Table V-13 (Table 5.115 from Draft TAR) Average Change in Projected Battery Pack
DMC from 2012 FRM to 2016 Draft TAR .................................................................... 142
Table V-14 – BEV Battery Costs ................................................................................. 143
Table V-15 Change in Average Vehicle Technology Costs with Corrected BISG
assumptions ................................................................................................................ 162
Table V-16 Comparison of average incremental technology costs for existing standards
and proposed rollback when using simple technology cost ratio ................................. 170
Table V-17 Average vehicle costs in "High oil price and 60 month payback" sensitivity
case compared to default central NPRM case ............................................................ 172
Table V-18 Comparison of compliance costs when CEGR1 technology is eliminated 174
Table V-19 Comparison of compliance costs when advanced transmissions are
restricted ..................................................................................................................... 176
Table VI-1 percent breakdown of vehicle technology replaced by rebated technology of
CVRP survey ............................................................................................................... 207
Table VI-2 percent breakdownbreakdown of other current household vehicle technology
by rebated technology of CVRP survey ....................................................................... 208
Table VI-3 percent breakdown of powertrain technologies of other vehicles considered
(Survey of CVRP Recipients) ...................................................................................... 211
Table VI-4 Modified PRIA Table 8-2 Comparing Sales Forecasts under Existing
Standards .................................................................................................................... 219
Table VI-5 Survival-weighted lifetime mileage estimates for model year 2025 vehicles
.................................................................................................................................... 241
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Table VI-6 Fatality Increase ( percent) per 100-Pound Mass Reduction While Holding
Footprint Constant – MY 2004-2011 CY 2006-2012 ................................................... 277
Table VI-7 Baseline fatal crash involvements, by case vehicle type and crash type ... 277
Table VI-8 Estimated effect of mass or footprint reduction on U.S. fatality risk per VMT,
by type of crash ........................................................................................................... 279
Table VII-1 2017 Household annual expenditure on gasoline and motor oil as a
percentage of total expenditure by income before taxes. ............................................ 319
Table IX-1 Partially Corrected GHG Program Societal Costs and Benefits ................. 332
Table IX-2 Key Metrics from Partially Corrected CAFE Model GHG Run.................... 333

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