Looking to save the U.S. some money, the Environmental Protection Agency may see significant cuts to its budgets, especially in regards to its vehicle emission testing program.
The EPA’s budget is currently about 20 percent lower than it was in 2010 and is now sitting at around $8.14-billion. Scott Pruitt, the recently appointed administrator of the EPA, is also looking to cut that by more than 30 percent. Those cuts can help reduce taxes for Americans, but there are several things to address when it comes to the what the EPA does and what will change if these budget cuts come into effect.
One of the ways that the EPA impacts the automotive industry is with its light vehicle emissions and fuel economy testing. The EPA’s vehicle lab, which is located in Ann Arbor, Michigan, tests vehicles in order to ensure that automakers are complying with its emissions standards. In order for a car to be sold in the U.S., it must meet the EPA’s standards and get the approval of the agency. Since the EPA can’t test every single vehicle, automakers are supposed to be supplying the EPA with emission and fuel economy figures using the same test procedure as the EPA lab. The EPA will test about 15 to 20 percent of vehicles to ensure that the automaker’s testing procedure is correct and that they’re not fibbing about anything. The EPA will also conduct its own investigations if there are any complaints about inconsistencies brought to its attention from consumer groups or advocacy organizations.
The cut to funding seems to effectively shut down the testing facility, the same one that helped root out some serious issues in the past.
Ford had to adjust the fuel economy numbers for six cars in 2013 and 2014 due to incorrect information supplied by the automaker. In the case of the C-Max, consumers were paid up to $1,050 in compensation for being misled to when it came to its advertised fuel economy.
Hyundai and Kia were also found to have overstated their fuel economy for several vehicles as a result of violating the EPA’s prescribed test guidelines for determining fuel economy. The automakers were fined $100-million and had to provide hundreds of millions of dollars to compensate its customers.
Perhaps the most well-known byproduct of EPA testing is Volkswagen’s Dieselgate scandal in which the German automaker’s diesel cars were outfitted with illegal software to help them cheat emissions tests. Now the automaker is expected to spend around $20-billion in the next few years to remove these polluting vehicles from the road, help repair the damage it caused to air quality and compensate customers for this violation.
Diesel-powered Jeep and Ram vehicles are currently the subjects of an investigation related to the violation of the Clean Air Act. Mercedes-Benz is also facing a similar investigation regarding its diesel vehicles and has not yet been approved to sell its 2017 model year diesel-powered vehicles.
These events show that the agency is committed to enforcing its regulations and making sure that automakers aren’t putting the environment at risk by releasing vehicles that are more causing more pollution. If funding was cut, the responsibility for testing might be put solely on the automakers, which means that it might be easier for them to cheat the system — not all automakers can be trusted to provide truthful testing results.
The EPA budget cuts could force the testing lab to turn into a shell of itself by dropping 168 of 304 full-time positions that are involved in the testing and certification of vehicle emissions. That doesn’t mean the EPA and its testing facility are disappearing, as right now, that hasn’t been confirmed. Budget cuts might simply mean that the operation will be significantly downsized and that testing will potentially be outsourced to automakers.
The plan going forward is to get automakers and engine manufacturers to help fund the EPA through higher fees, but that will require negotiations. Negotiations rarely happen quickly, and there are some concerns that the time period between the budget cuts and increase to automaker fees will result in a delayed certification process and no cars getting to customers. Why would automakers want to pay higher fees to the EPA even if they have to test their own cars? They can’t sell cars without and EPA certification.
One thing worth considering is that automakers are held to different standards around the world and will likely adapt to the emissions standard in its biggest markets, which is no longer the United States, but China. This is important to keep in mind if you think that automakers will just ignore air and fuel economy standards. “China is twice as big and they are moving forward with trying to clean the air,” says analyst Dave Sullivan from AutoPacific. “I don’t think automakers are going to go on vacation with developing technology to improve fuel economy or stop putting catalytic converters in. With more powertrains becoming global, we will continue to get whatever works for Europe and China. Look at all of the 1.5L engines available here. Those are all due to China. When Ford switched from the 1.6L EcoBoost to the 1.5…why? China.”
Unbiased testing is crucial in holding the automakers accountable for what they bring to the market. And although climate change skeptics do exist, it has been proven that the greenhouse gasses emitted from vehicles can impact our air quality and health. If the EPA loses the ability to test cars themselves, customers could see a drastic difference between advertised and real-world fuel economy. Air quality could also get worse.
There are plenty of questions still remaining and the budget will be fully detailed in May, but at this point, it looks like that these budget cuts can lead to significant issues.