Automobiles, Air Pollution, and Climate Change

Automobiles, Air Pollution, and Climate Change

Updated June 14, 2024
Automobiles, Air Pollution, and Climate Change
On August 5, 2021, President Biden signed Executive
§7521). Standards under Section 202 must also consider
Order 14037, “Strengthening American Leadership in
issues such as technological feasibility, the cost of
Clean Cars and Trucks” (86 FR 43583). The order required,
compliance, and industry lead time, among other items.
among other items, executive agencies to revisit and amend
EPA has since promulgated standards for emissions of
the federal standards that regulate air pollution emissions,
nonmethane organic gases (NMOG), NOx, PM, carbon
greenhouse gas (GHG) emissions, and fuel economy of new
monoxide (CO), and formaldehyde (an air toxic).
passenger cars and light trucks. These standards include the
EPA’s GHG Standards
Motor Vehicle Emission and Fuel Standards promulgated
In the 2007 decision Massachusetts v. EPA, the Supreme
by the U.S. Environmental Protection Agency (EPA), the
Court held that EPA has the authority to regulate GHGs
Light-Duty Vehicle GHG Emissions Standards
from new motor vehicles as “air pollutants” under CAA
promulgated by EPA, and the Corporate Average Fuel
Section 202. In the 5-4 decision, the Court’s majority
Economy (CAFE) Standards promulgated by the National
concluded that EPA must decide whether GHG emissions
Highway Traffic Safety Administration (NHTSA). The
from new motor vehicles contribute to air pollution that
order also included a nonbinding electrification goal that
“50 percent of all new passenger cars and light trucks sold
may reasonably be anticipated to endanger public health or
welfare or provide a reasonable explanation why it cannot
in 2030 be zero-emissions vehicles, including battery
or will not make that decision. In December 2009, EPA
electric, plug-in hybrid electric, or fuel cell electric
vehicles.”
promulgated findings that GHGs endanger both public
EPA published its final rule—“Multi-Pollutant
health and welfare and that GHG emissions from new
Emissions Standards for Model Years 2027 and Later
motor vehicles contribute to that endangerment (74 FR
Light-Duty and Medium-Duty Vehicles”—on April 18,
66495). With these findings, the CAA required EPA to
2024 (89 FR 27842). NHTSA announced its final rule—the
“
establish standards.
Corporate Average Fuel Economy Standards for Passenger
Cars and Light Trucks for Model Years 2027 and Beyond
NHTSA’s CAFE Standards
and Fuel Efficiency Standards for Heavy-Duty Pickup
The Energy Policy and Conservation Act of 1975 (EPCA;
Trucks and Vans for Model Years 2030 and Beyond”—on
P.L. 94-163) established CAFE standards for passenger cars
June 7, 2024 (pre-publication).
beginning in model year (MY) 1978 and for light trucks
Emissions from Automobiles
beginning in MY1979 (49 U.S.C. Chapter 329). The
standards are designed primarily to conserve petroleum.
The light-duty vehicle (LDV) and medium-duty vehicle
They require each auto manufacturer to meet a target for the
(MDV) sectors (defined at 40 C.F.R. §86 and 49 C.F.R.
sales-weighted fuel economy of its entire fleet of vehicles
§523) generally include passenger cars, light trucks, and
sold in the United States in each model year. Under EPCA,
most sport utility vehicles; as well as class 2b and class 3
CAFE standards and new vehicle fuel economy rose
trucks such as large pickups and vans. EPA reports that
steadily through the late 1970s and early 1980s. After 1985,
these vehicles contribute to air pollution, such as “ozone,
Congress did not revise the legislated standard for
particulate matter, and air toxics, which are linked with
passenger cars for several decades, and it remained at 27.5
premature death and other serious health impacts, including
miles per gallon (mpg) until 2011. The light truck standard
respiratory illness, cardiovascular problems, and cancer.”
was increased to 20.7 mpg in 1996, where it remained until
The agency estimates that LDVs and MDVs currently
2005. In 2007, Congress enacted the Energy Independence
account for approximately 11% of the United States’ annual
and Security Act (P.L. 110-140), mandating a phase-in of
anthropogenic emissions of nitrogen oxides (NOx), 8% of
higher CAFE standards reaching 35 mpg by 2020. This was
volatile organic compounds (VOC), and 1% of fine
the last legislation on CAFE passed by Congress.
particulate matter (PM2.5). Further, according to EPA’s
Inventory of U.S. Greenhouse Gas Emissions and Sinks:
Prior Standards
1990–2022 (published April 2024), LDVs emitted over 1
Air Pollution Standards
billion metric tons of GHGs in 2022, or about 16% of the
EPA’s prior air pollution standards for LDVs (Tier 3, 79 FR
United States’ annual anthropogenic emissions of GHGs.
23414) were finalized in March 2014, to be phased-in
Agency Authorities
between 2017 and 2025, and closely align with California’s
EPA’s Air Pollution Standards
Low-Emission Vehicle (LEV) III program. Manufacturers
must meet fleet-average tailpipe emissions standards for
Section 202 of the Clean Air Act Amendments of 1970
NMOG + NO
(CAA; P.L. 91-604, as amended) requires EPA to establish
x, PM, CO, and formaldehyde in a given
model year across several different test cycles. Tier 3 also
standards for emissions of air pollutants from new motor
vehicles which, in the Administrator’s judgment, cause or
includes standards for low-sulfur fuel, evaporative
emissions, and on-board diagnostics, as well as compliance
contribute to air pollution which may reasonably be
flexibilities such as an emissions averaging, banking, and
anticipated to endanger public health or welfare (42 U.S.C.
trading program.
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Automobiles, Air Pollution, and Climate Change
CAFE and GHG Standards: Rulemakings
to a fleet average of 15 milligrams (mg)/mi by MY2032,
EPA’s prior set of GHG emissions standards (86 FR
representing a 50% reduction from the Tier 3 standards.
74434), promulgated in December 2021, extends through
The MDV standards would see a 58% and 70% reduction
MY2026, culminating in a projected industry fleet-wide
compared to Tier 3, for class 2b and 3 vehicles,
GHG compliance target of 161 grams/mile (g/mi).
respectively. EPA also finalized a PM standard of 0.5
NHTSA’s prior set of fuel economy standards (87 FR
mg/mi for both LDVs and MDVs.
25710) also extends through MY2026, culminating in a
GHG Standards. EPA’s 2024 final rule for LDV GHG
projected industry fleet-wide fuel economy target of 49
standards increases in stringency each year from MY2027
mpg.
to MY2032. The agency projects the standards would result
CAFE and GHG Standards: Attributes
in an industry-wide average target of 85 g/mi of CO2 in
The agencies’ fuel economy and GHG standards apply to
MY2032, representing about a 50% reduction relative to the
the new fleet of passenger cars and light trucks sold by a
MY2026 standards. Additional components of the standards
manufacturer within the United States during a given model
include, among other items, narrowing the difference in
year. Starting with the standards finalized in 2010, the
stringency between passenger cars and light trucks, phasing
agencies have used the concept of a vehicle’s “footprint”
out the off-cycle credit programs, and rescinding
(i.e., the measured area enclosed by the four tires) to set
regulations that would consider upstream power sector
differing targets for different-sized vehicles, all of which
emissions tied to electric vehicle use, which were to start in
increase in stringency year after year. Generally, the larger
MY2027. The MDV standards are projected to result in an
the vehicle footprint, the lower the corresponding fuel
average target of 274 g/mile of CO2 by MY2032,
economy target and the higher the CO2-equivalent
representing a 44% reduction compared to MY2026.
emissions target. This concept differs from the original
EPA states the final standards are projected “to accelerate
CAFE standards, which grouped domestic passenger cars,
the transition to clean vehicle technologies,” estimating that
imported passenger cars, and light trucks into three broad
from MYs 2030-2032, manufacturers may choose to
categories. The newer, “attribute-based standards” enable
produce battery electric vehicles for about 30% to 56% of
manufacturers to produce a range of vehicle sizes rather
new LDV sales and about 20% to 32% of new MDV sales.
than designing a lighter and smaller vehicle fleet overall to
Manufacturers also are expected to use other vehicle
meet categorical targets.
technologies, including hybrid electric and less emitting
Manufacturers must report vehicle characteristics sold each
internal combustion engines.
model year. These data allow EPA and NHTSA to calculate
EPA estimates that the total benefits of the 2024 final rule
each manufacturer’s CAFE and GHG targets under the
exceed the total costs, with the annualized value of
standards given the specific pattern of sales. The agencies
then compare the calculated targets against the vehicles’
monetized net benefits to society estimated to be $99 billion
through the year 2055. This includes $46 billion in reduced
fuel economy and emissions results from EPA-approved
annual fuel costs, and nearly $16 billion in reduced annual
test cycles to determine compliance. To facilitate
maintenance and repair costs for drivers. Further, EPA
compliance, the agencies provide manufacturers various
projects cumulative CO
flexibilities. A manufacturer’s fleet-wide performance (as
2 reductions of approximately 7.2
billion metric tons and cumulative air pollution reductions
measured on the test cycles) can be adjusted through the use
of 8,700 U.S. tons of PM, 36,000 U.S. tons of NO
of alternative fuel vehicles, air conditioning efficiency
x, and
improvements, and “off
150,000 U.S. tons of NMOG, providing $13 billion in
-cycle” technologies (e.g., active
annual health benefits through 2055. In addition, EPA
aerodynamics, thermal controls, and idle reduction).
estimates consumers will save an average of $6,000 over
Further, manufacturers can generate credits for over-
the lifetime of a new vehicle from reduced fuel and
compliance with the standards in a given year. They can
maintenance costs, once the standards are fully phased in.
bank, borrow, and transfer these credits within their own
fleets or trade them with other manufacturers to achieve
EPA contends that its rule builds upon announcements by
compliance.
automakers that collectively signal a rapidly growing shift
NHTSA’s 2024 Final Rule
away from internal combustion engine technologies and
NHTSA’s
toward zero-emission technologies, including
2024 final rule includes new fuel economy
electrification. For support, the agency points to actions
standards for passenger cars and light trucks, which would
taken by Congress, such as P.L. 117-58 (the Infrastructure
increase, on average, at a rate of 2% per year during MYs
Investment and Jobs Act) and P.L. 117-169 (commonly
2027–2031 for passenger cars, and 2% per year during MYs
referred to as the Inflation Reduction Act), which provide
2029–2031 for light trucks. The agency projects that the
investment to accelerate the development of and market for
proposed standards would require an industry fleet-wide
zero-emission technology. Others, including some
average for passenger cars and light trucks of roughly 50.4
Members of Congress, have expressed concerns over the
mpg in MY2031. NHTSA projects that the proposed
rule’s implicit mandate for vehicle electrification, increased
standards would reduce U.S. gasoline consumption by a
industry costs, reduced consumer choice, and dependence
total of 70 billion gallons through 2050 and would reduce
on foreign markets for critical minerals.
average fuel outlays by over $600 per vehicle over the
lifetimes of the LDVs under compliance.
Richard K. Lattanzio, Specialist in Environmental Policy
EPA’s 2024 Final Rule
IF12433
Air Pollution Standards. EPA’s 2024 final rule for LDVs
(Tier 4) includes NMOG + NOx standards that phase-down
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Automobiles, Air Pollution, and Climate Change

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https://crsreports.congress.gov | IF12433 · VERSION 4 · UPDATED