In late November, while most of the GOP was refusing to call Joe Biden “president-elect,” General Motors CEO Mary Barra effectively called the race: she withdrew from a lawsuit about California’s ability to set strict fuel economy and vehicle emissions standards, and challenged the CEOs of other automakers to do the same.
“We are immediately withdrawing from the pre-emption litigation and inviting other automakers to join us,” Barra wrote in a letter to the heads of 11 environmental organizations.
The withdrawal was an acknowledgement—from one of the U.S. automakers that embraced the Trump administration the hardest—that with a new administration, change is coming, whether the world’s automakers like it or not.
But even if all the automakers drop their challenge to California it doesn’t mean the incoming Biden administration can just flip a switch and immediately undo Trump’s rollbacks of auto emissions to the planned reductions of four years ago. The process will be slower and more unwieldy than the urgency of addressing climate change demands. And without legislation from Congress, any progress Biden makes could be undone by a future administration.
“That’s why it’s so important to move fast on this,” Caitlin McCoy, a staff attorney with the Harvard Law School Environmental and Energy Law Program, told VICE News. “Every time a car that consumes gasoline is sold, that just pushes out our timeline.”
One of President Trump’s signature environmental rollbacks was to cut vehicle standards from the annual 5 percent improvement in fuel efficiency that would have been required under President Obama’s rules to a paltry 1.5 percent. Eviscerating the standards, Marathon Oil told investors in 2018, could lead to an additional 400,000 barrels of gasoline demand per day.
But there was one wrinkle: California, which was granted a special waiver during the Obama years that allowed it to keep Obama’s stronger vehicle standards despite what Trump was doing federally. Because California is by far the biggest auto market in the U.S., it can effectively set national policy—no automaker would produce a car it could not sell in California.
So in September 2019, the Trump administration published a rule withdrawing California’s special waiver. California and 22 other states and environmental groups sued. The whole thing ended up dividing the auto industry: Ford, Honda and Volkswagen actually backed California in the lawsuit, and agreed to voluntary standards stronger than Trump’s; GM, Toyota, and Fiat Chrysler sided with the administration.
Now, after GM dropped its support, Toyota is now saying it’s “assessing the situation.”
If Biden makes good on his promise to reinstate and strengthen the vehicle standards Trump destroyed, it might lead to U.S. oil consumption dropping 2.4 million barrels per day or more by 2030.
That could accelerate the market for electric vehicles, experts predict, put the U.S. on a path towards achieving its mid-term Paris climate targets, and cause the oil and gas business model to enter irreversible decline.
“The situation here is dire for oil companies,” Dan Becker, director of the Safe Climate Transport Campaign at the Center for Biological Diversity, told VICE News. “Oil is being produced in order to run vehicles and the best way to keep it in the ground is to not need that oil by making vehicles oil-free.”
The first step Biden could take would be to direct the Environmental Protection Agency to restore California’s waiver. “This would restore the state’s legal authority to set stricter emissions standards,” said McCoy.
Biden could also sign executive orders beginning the work of restoring the Obama-era mandated improvements. But even if he did that right away, it would be years before they could take effect. Federal law requires giving automakers 18 months of lead-time before new rules are brought in. And on top of that there is an EPA rule allowing automakers to begin selling next year’s model on January 2 of the preceding year—GM for example could technically start rolling out 2022 vehicles next month.
“You end up needing to set those standards way further in advance than you might imagine,” McCoy said. The best-case scenario, she thinks, is the standards are ready by July 2022, meaning that automakers start rolling out significantly cleaner models from 2025 onwards.
There is also the reality that without a Democratic Congress able and willing to enshrine cleaner vehicles targets in legislation, anything Biden does by executive order could be reversed by the next administration, just as Trump did to Obama. “That’s the sad part,” McCoy said. “That’s the way our system works; our regulations are subject to change at any time.”
Just knowing that tougher rules are coming from Biden, however, automakers might begin cleaning up their vehicles early. “If the administration acts quickly that will send the signal for immediate investment,” said Luke Tonachel, director of the clean vehicles and fuels group at the Natural Resources Defense Council. “That can start today.”
The good news is that a lot of the technology to make dramatically cleaner cars already exists—and it’s getting better all the time. Lithium ion battery pack prices have fallen 89 percent over the past 10 years, according to Bloomberg New Energy Finance. The research group expects that because of this and other market forces, an electric vehicle will cost as much as a traditional one in the U.S. without subsidies by 2024.
“There was a lot of potential for the EV industry even without a Biden win,” Nick Albanese, Head of Intelligent Mobility analysis for BNEF, told VICE News.
Electric vehicles only make up about 2 percent of U.S. auto sales currently. But tightening up vehicle emissions standards could hasten the transition. “You simply cannot hit those targets by just selling more efficient internal combustion cars,” he said.
BNEF calculated that the Obama standards would have required 25 percent of passenger vehicles sold to be electric within only a few years. If Biden brings in standards as least as strong, this would result in potentially massive greenhouse gas reductions—the Obama administration’s analysis suggested it would cut the carbon footprint of cars and light trucks in half.
“Clean car standards would absolutely help put us on the path to achieving commitments under the Paris agreement,” Tonachel said.
But to achieve the Paris target of making the economy carbon-free by 2050, Biden will have to also be thinking about banning gas and diesel-powered cars altogether. This is not as radical as it sounds. California already has plans to phase out gas-powered vehicles by 2035. China plans to do the same. The European Union is working on a strategy to get 30 million zero-emissions vehicles on its roads within the next decade.
Biden is unlikely to be able to get a gas car phase-out passed via Congress. But tightening up vehicle emissions standards beyond Obama levels could effectively achieve the same thing. In fact, pushing automakers to move as quickly as possible towards making electric vehicles over the next four years might be the best insurance against future Republican rollbacks.
“You want to get the automakers to change their business model so dramatically,” McCoy said, “that it doesn’t make sense for them to go back.”
It’s possible that automakers will fight Biden if he goes too fast—given that the vast majority of their sales are still gas-consuming SUVs and trucks. Or they could embrace the changes being accelerated by Europe, China, and California and profit before their competitors.
Oil companies like Marathon don’t have the same options, however. Dozens have gone bankrupt this year due to an 8 million barrel per day drop in oil demand caused by the pandemic. If BNEF is correct that over half of all global vehicle sales will be electric by 2040, that could permanently wipe out 17.6 million barrels per day of demand.
“The oil industry’s days are numbered,” Becker said. “The biggest single step to cutting global warming is making cars cleaner.”
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