This post is a part of a series on Understanding the Budget
More details have been released about the Trump administration’s plans to cut funding to the Environmental Protection Agency (EPA). In particular, it is nearly zeroing out the budget for the vehicles program, calling for the National Vehicle and Fuels Emission Laboratory (“Vehicle Lab”) in particular to be funded almost entirely by fees on industry “as quickly as possible” (i.e. as soon as never). This could significantly undermine the enforcement of safeguards which protect American pocket books and public health from industry malfeasance, and it could put in jeopardy technical research that moves technology forward.
The Vehicle Lab plays a critical role in watchdogging industry
EPA’s Vehicle Lab, located in Ann Arbor, MI (Go Blue!), is responsible for certifying manufacturer compliance with its emissions standards—before any vehicle can be sold in the United States, it must be approved by the EPA. EPA does not test every passenger vehicle model—the lab is under-resourced for such an endeavor. Instead, it randomly selects vehicle models (about 15-20 percent annually) to assess the accuracy of manufacturers’ test results. It also conducts its own investigations if any anomalous data is brought to its attention, e.g., by consumer groups or other advocacy organizations.
Just in the last couple of years alone, several manufacturers from across the industry have faced fines, or worse, thanks to this oversight:
Fiat-Chrysler—Its Jeep and Ram diesel vehicles are currently being investigated for violating the Clean Air Act. While the case is ongoing, it represents an effort by EPA to step up its real-world emissions tests to ensure that vehicles are not polluting above what is legally allowed and public health is not being harmed.
Ford—For the 2013 and 2014 model years, 6 different vehicles were required to adjust the fuel economy label information provided by consumers—for one of those (the C-MAX), this was actually the second such adjustment. This resulted in payouts to consumers of up to $1050.
Hyundai and Kia—The Korean manufacturers were found to have systematically overstated fuel economy results for over 1 million vehicles, largely the result of violating EPA’s prescribed test guidelines for determining vehicle road load. This led to a $100 million fine and hundreds of millions of dollars in compensation for its customers.
Volkswagen—The reintroduction of diesels to its American fleet were found to come only as the result of a defeat device used to cheat the emissions tests. Encompassing nearly 600,000 vehicles, it turns out that in the real world these vehicles emitted up to 40 times the legal limit of nitrogen oxides, a smog-forming pollutant. Volkswagen is estimated to spend around $20 billion over the next few years in an effort to remove these polluting vehicles from the road, mitigate the excess pollution caused by these vehicles, and compensate the American people for this egregious violation.
The above issues represent a real cost to consumers, the environment, and public health and they required rigorous laboratory and on-road testing to investigate the issue. If anything, these recent enforcement actions by EPA show the need and value of investing in even more complementary real-world testing, not less. It seems absurd to cut in half the number of staff at the lab responsible for these tests.
The Lab has also been a vital tool for transparent assessment of vehicle regulation
In addition to its important role as industry watchdog, the Lab has played a key role in assessing the technological capability of the automotive industry and providing transparency to the development of fuel economy and emissions standards.
Throughout the regulatory process, the EPA has used the capabilities of the Vehicle Lab to assess the technology landscape, publishing its results and making freely available pages upon pages of detailed technical information. This data was used not just to test the technologies of today but to actually create, develop, and benchmark a publicly accessible full vehicle simulation model to simulate the technologies of tomorrow. This is the type of tool previously only available to manufacturers and some well-funded institutions and, until now, well out of the budget of an organization like UCS.
This wealth of information can help inform researchers like myself and others looking to promote improvements and investments in technologies to reduce fuel use, and it provides an unparalleled level of detail and transparency for assessing the validity of regulations based on this information.
In a comprehensive report, the National Research Council of the National Academies of Science, Engineering, and Medicine noted that “the use of full vehicle simulation modeling in combination with lumped parameter modeling has improved the Agencies’ estimation of fuel economy impacts. Increased vehicle testing has also provided input and calibration data for these models. Similarly the use of teardown studies has improved [NHTSA and EPA’s] estimates of costs.”
Every single item lauded by the National Academies was conducted in collaboration with the researchers at the Vehicle Lab the Trump administration is now proposing to gut.
Cutting funding cuts corners, jobs and puts us at risk of a rubber stamp EPA
The current administration plan would immediately cut the number of people working at the Lab in half—that means that rather than increasing the ability for the agency to protect against the types of industry malfeasance documented above, the Lab would be stripped of its capabilities in the near-term. This reduction in workforce would make it impossible to even maintain the bare minimum of checks and balances on the certification program, even if (big IF!) it were eventually fully funded by fees from manufacturers.
Furthermore, the fee proposal in the budget is completely inadequate to the task. While the EPA already collects fees to reimburse the Agency, in part, for its certification activities, it is Congress which determines how the fees are appropriated—to date, Congress has not been appropriating this money to EPA, instead using these funds to offset the federal budget deficit. There is no reason to suppose that this would change in the future, which means this proposal would effectively gut the certification process by cutting the staff responsible for the program in half.
With such a drastic staff reduction, effective immediately in 2018, the certification process will be gummed up to such a degree it will either delay sales of vehicles tremendously or become a meaningless rubber stamp which will undoubtedly lead to even more automaker malfeasance, further eroding the trust of the American people in its auto industry.
Ensuring a technically sound watchdog is of course in the interest of the auto industry as well. It ensures everyone is playing by the same rules and that they suffer the consequences if they don’t. While engineers at other auto companies were working hard to develop emission controls for diesel cars, VW was making millions, selling so-called “clean diesels” by the hundreds of thousands.
So I hope the Alliance of Automobile Manufacturers and the Association of Global Automakers call out this farcical budget memo for what it is—a slap in the face of good governance that can only result in adverse health and environmental impacts for the American people and end up a costly mistake for the auto industry as well.
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