Canada will have allies if it resists Trump's fuel-efficiency rollback: Don Pittis

This week's announcementby U.S. President Donald Trump that he plans to cut Obama-era restrictions on coal-fired power plants is just the latest blowina blatant presidential war on environmentalism.

As people around the world choke on forest fire smokeduring the world's third-hottest summer on record, a political urge to create more smog is difficult for many to understand.

And while the U.S. president is almost certainlybeyond the reach of Canadian persuasion, another recent Trump change in environmental policy, namely to roll backvehicle fuel-efficiency targets, is one issue where Canada couldtry to bring its influence to bear.

Spending less on gas

At stake is the CAFE standard, which stands for North America's Corporate Average Fuel Economy,a set ofrules first enacted in the 1970s by the U.S. in an attempt to use less imported oil. Canada followed the U.S.'s lead, and the targets have been updated over the years.

Most analysis shows CAFE has been a startling success. Those gas-guzzling cars of the 1970sthat got between 10 and 15 miles to the U.S. gallon have gone for good. Individualautomakers, unafraid that some other company could win by spending less on R&D, becametechnological leaders.

In the years since the CAFE standard came into being, carmakers met fuel efficiency targets many had declared impossible. AndCanadian motorists saved a fortune. Even as fuel costs rose, increasingly efficient engines meantthe biggest trucks went farther on less gas.

The Trump administration plans tofreezemileage standards at 2020's target and scrap the tougher marks the Obama administration had set for 2025 model cars.

Just as theprime minister was meeting with his cabinet insmoke-shrouded Nanaimo, B.C., this week, his government was asking Canadians to give their opinionsby Sept. 28 on whether Canadashould once again follow the U.S.'s lead, this time by rolling back standards.

According to research from the International Council on Clean Transportation, that would be a mistake for the industry and for Canadian consumers.

Calling on Canada to "chart its own course," the ICCTsays it will soon release a study using the U.S. EnvironmentalProtection Agency's own figures that will show the cost to industry of continuing on the CAFE standard's path to 2025 would be up to 50 per cent less than what was forecastin 2014.

And if thosestandards are scrapped, consumers will pay the price.

"Over its lifetime, the average 2025 vehicle would provide a return on investment within about 2years and save the Canadian consumer nearly $4,000 CAD ($3,000USD) in fuel costs," the ICCTsays.

Missing the target

Although originally not intended as part of the battle against climate change, the CAFE standard has certainly assumed that role. If Canada were to abandon it,we wouldlikely fail to meet our emission-reduction targets in the Paris Agreement. After coal-fired power plants, transportation remains the biggest producer of greenhouse gases.

But according to automotive industry experts, if the U.S. goes holus-bolusin favour of cutting the standard, Canada, with only 10 per cent of the North American automobile market, simply cannot go it alone.

"There isn't a business case for an automaker to make two different cars, one for the Canadian market and one for the U.S. market," says Flavio Volpe, president of the Automotive Parts Manufacturers' Association.

But of course that's not how the CAFE standard is supposed to work anyway. Requiring an average fleet standard for each manufacturer forces the companies to do research to make their most fuel-efficient cars, such as the GM Bolt,very fuel efficient indeed. Then, after various newdevicesare proven, the technology graduallydisseminates throughout the product line.

It is the requirement of meeting the very challenging 2025 target that keeps the companies' R&D labs busy. All alone, Canada just isn't a big enough market to deploy that kind of R&D effort.

Looking for allies

As you can imagine, Canada's Pembina Institute, a think-tank focused on energy and environmental policy, is in favour of maintaining Canada's commitmentto the tougher targets.

"There's rarely a policy or an opportunity where environmental and economic benefits so clearly align," says Pembina'sIsabelle Turcotte. She says maintaining the standard will keep Canada and North America competitive against places like China and Europe, where companies continue to pursue greater fuel efficiency.

Turcottesays that while there are many reasons why Canada should stick with its plan, there is no reason it has to go it alone.

It is not clear that the U.S. Environmental Protection Agency can overrule state governments on fuel-efficiencypolicy. Turcotte says showingCanada's commitment to CAFE will support California, D.C. and 17 other U.S. states that have vowed to go to courtto keep the targets.

While some Trump supporters reject climate change as a conspiracy led by scientists, as globalfloods, firesand heat waves increase along with rising carbon levels, it's possible climate could become an importantissue in the coming midterm elections. A court battlewould also delay a final decision for months.

Many, including some in the Canadian auto sector, think it prudent to wait until the U.S. has made its decision before making ours. Others, like Turcotte,say now is the time to speak up.

Strong voices in favour of keeping the existing standardcould actually help make allies of North American automakers.

The industry wants one standard, not two. Besides, Trump's proposed changes won't affect the standards until 2021, when he could be out of power.The industry wants to know that the regulations won't change again. For business, even more important than having weaker rules is knowing for certain what the rules will be and that they will apply to all.

"The White House has tried to to represent this issue as being in the interest of the auto industry," Turcotte says. "But this is not reflected in their position."

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