MANHATTAN (CN) – Automakers that don’t meet fuel-efficiency standards are going to have to pay up after the Second Circuit refused Monday to let the Trump administration delay a scheduled fine increase.
“The fuel efficiency standards penalty rule is a common-sense measure that would protect consumers’ pocketbooks while reducing the carbon emissions that harm our health and drive climate change,” New York Attorney General Eric Schneiderman said Monday in reaction to the ruling. “Today’s court order is a big win for New Yorkers’ and all Americans’ health and environment.”
Congress enacted the standards known as Corporate Average Fuel Economy (CAFE) in 1975 to increase fuel efficiency in U.S.-produced vehicles after several oil-producing countries issued an embargo on sending oil to the U.S. because of its support of Israel in the Arab-Israeli War.
Vera Pardee, senior counsel at the Center for Biological Diversity, noted in an interview that the main goal at the time was to preserve fuel, though lawmakers also recognized the health benefits of the standards.
The Environmental Protection Agency followed up later with another rule, this time targeted at greenhouse gases.
Calling the CAFE standards “reasonable,” Pardee emphasized that they are the result of “an enormous amount of studies that demonstrate that the technology to reach [the standards] is available, that it is cost-effective … and that it can be done.”
Also of note to Pardee is that “the industry has an enormous amount of input.”
Automakers face penalties if they fail to comply with the CAFE standards: If the fuel-efficiency standard is that a car has to get 30 mpg, the average rating of all cars in an automaker’s fleet has to be 30. If it’s lower, they pay a fine.
But Pardee noted that the fee amount has only increased once, from $50 to $55, since the original CAFE standards were passed in the 1970s. It took a 2015 act of Congress to begin adjusting the fees for inflation, leading to the newest proposed penalty of $140 per shorted mpg.
Schneiderman’s office lauded the most recent iteration of the rules as saving “approximately 1.8 billion metric tons of carbon dioxide emissions over the lifetimes of the vehicles sold.”
Before the $140 fee could take effect in July 2017, however, the Trump administration ordered an indefinite delay, restoring the previous penalty rate of $55 per mpg, and triggering a challenge to the Second Circuit.
Schneiderman and four other state attorneys general were joined in the case by the Sierra Club, the Natural Resources Defense Council and the Center for Biological Diversity.
“Once again, the Trump administration has failed in court. Neither the American people nor the judicial system will allow Donald Trump and his administration to haphazardly weaken the civil penalties for companies violating the life-saving clean air standards just to help the auto industry pad its pockets,” Sierra Club senior attorney Alejandra Nunez said in a statement Monday.
“These updated fines must remain in place to ensure that automakers do not cheat the system,” she added.
Pardee noted that the old fines were not enough to deter companies from skirting the standards, and that the new $140 penalty is effective immediately.
In a blog post for the National Resources Defense Council, attorney Irene Gutierrez called on the White House to support the standards.
“The Trump administration should be standing up for the public that overwhelmingly supports strong fuel economy standards and enforcing strong penalties on automakers that fail to meet those standards,” she wrote.
U.S. Circuit Judges Ralph Winter, Rosemary Pooler and Barrington Parker concurred in Monday’s brief order. An opinion is expected to follow.
Representatives from Schneiderman’s office and the National Highway Traffic Safety Administration have not returned requests for comment.