Subject: Summary of additional interagency working comments received on draft rule under EO 12866 review 

 Sent: 11/10/2011 08:11 PM EST 

 From: "Achanta, Chandana L." [Chandana_L._Achanta@omb.eop.gov]

 To: William Charmley; "'Steve.Wood@dot.gov'" <Steve.Wood@dot.gov>; "'Neil.Eisner@dot.gov'" 

<Neil.Eisner@dot.gov>; "''james.tamm@dot.gov' (james.tamm@dot.gov)'" <james.tamm@dot.gov>; 

"'rebecca.yoon@dot.gov'" <rebecca.yoon@dot.gov>

 

Please find attached additional interagency working comments received on draft NPRM under EO 12866 

and EO 13563 review. They are for your consideration and are subject to further policy review. 

 

Thanks. 

Chandana 

Summary of Interagency Working Comments on draft rule under EO 12866.pdf 

 
Subject: Responses to the November 10, 2011 interagency comments 

Date: 11/12/2011 06:02 PM 

From: William Charmley/AA/USEPA/US 

To: "Chandana Achanta" <Chandana_L._Achanta@omb.eop.gov> 

Cc: "Ed Nam" <Nam.Ed@epamail.epa.gov>, "Rebecca Yoon" <rebecca.yoon@dot.gov>, "Jim Tamm" 

<james.tamm@dot.gov>, "Robin Moran" <Moran.robin@epa.gov> 

Chandana 

Attached are responses to the 11.10 comments 

Thanks 

Bill 

11 10 2011 Interagency Working Comments EPA NHTSA response.docx 
Summary of Interagency Working Comments Received on Draft rule under EO 12866 review. Subject to

further policy review.

1

Below is a summary of interagency working comments received during EO 12866 and EO 13563 

review of the draft rule “Joint Rulemaking to Establish Light-Duty Vehicle Greenhouse Gas 

Emission Standards and Corporate Average Fuel Economy Standards”. They are for your 

consideration and subject to further policy review. 

1) Interagency commenters recommend that EPA include a chapter in their RIA effects of 

learning costs and all learning assumptions. Commenters note that NHTSA includes a 

chapter on learning and the TSD includes more information on learning, but EPA RIA 

does not include this discussion. 

2) Interagency commenters recommend that EPA include the following highlighted 

language toward the end of the NAS report section under Appendix A- Sensivitities: 

“For the reasons described above, EPA has elected not to perform a sensitivity assessment 

based on the 2010 NAS Report. 

However, we are providing the underlying studies that were not available to be included in 

the NAS study for public comment. They are available [insert docket number]. Also, the 

2011 Ricardo study commissioned by EPA was peered reviewed and those results are 

available [insert docket number]. 

We seek comment on the relative merits of providing alternative estimates of benefits and 

costs of this action using the 2010 NAS Report as a starting point. Also, we seek comment 

on how the recommendations of the peer reviewers of the Ricardo model can be incorporated 

in timely manner to be useful for the final rulemaking analysis, including: 

 The appropriateness of the baseline vehicles modeled in both the NAS report and the 

Ricardo model and the likely effect of the assumed baseline vehicles on the benefit 

and cost estimates of this proposal—including the potential to include a baseline 

model of a hybrid vehicle; 

 Incremental analysis and expansion of the technology “package definitions” to enable 

evaluation of the individual effects of a variety of technologies, including 

incorporating appropriate weight increases or decreases specific to each technology; 

 Clarification of assumptions made and the method of simulation, including providing 

fuel and efficiency map data for all engines used in simulation; and 

 Calibration of the Ricardo model and the validation of model results. 
Summary of Interagency Working Comments Received on Draft rule under EO 12866 review. Subject to

further policy review.

2

 Estimation of technologies that have negative costs (i.e those that reduce fuel 

consumption AND reduce costs).” 

3) Effect of rule on the distribution of the fleet footprint . Interagency commenters 

recommend that EPA and RIA include the following description in the Preamble 

discussion of safety impacts: 

“The standards in this proposal are intended to eliminate to comply by changing the size 

(i.e., footprint) of vehicles. This is a well-understood problem with prior “flat” standards, 

which the National Academy of Sciences concluded [2002 report] led to adverse safety 

consequences, among other effects. 

Nevertheless the agencies acknowledge it is possible that changing the footprint could, 

under certain circumstances, be a relatively low-cost means of achieving compliance with 

the standards proposed today. This could happen in one of two ways. Manufacturers 

could change the size of a vehicle during the redesign cycle in order to increase overall 

fuel economy relative to the target for that particular vehicle size. (Footnote: Suppose, 

for example, a 50-square-foot vehicle would exceed its target by 2 mpg, but a redesigned 

new vehicle would cost the same but exceed the slightly larger target by 3 mpg.) 

Alternatively, instead of redesigning vehicles, manufacturers could lower the price and 

increase production of vehicles of sizes whose fuel economy is favorable (well above the 

target for that footprint) and/or increase the price and decrease production those whose 

fuel economy is unfavorable. For example, the agencies note that the standard is flat for 

vehicles smaller than roughly 41 square feet. Further downsizing in this category could 

be a relatively low-cost way of helping achieve overall compliance. To the extent 

manufacturers engage in either behavior, the net result would be vehicles larger or 

smaller on average than they otherwise would have been in the absence of this 

regulation. Changes to the average size, and/ or the distribution of vehicle sizes, could 

also have important implications for the overall safety of the new vehicle fleet. 

For various reasons, the analysis assumes this rule will not have either of the effects 

described above. In other words, it will have no effect on the sales-weighted distribution 

of vehicle footprints. In particular, the analysis assumes production of vehicles with 

footprints where the curve is flat (i.e., below 41 square feet) will not increase over their 

baseline levels (i.e., those that will exist in MY 2016) as a result of this rule. We seek 

comment on the appropriateness of the overall assumptions that this rule will have no 
Summary of Interagency Working Comments Received on Draft rule under EO 12866 review. Subject to

further policy review.

3

effect on the overall sales-weighted distribution of vehicle footprints of on the sales of 

vehicles smaller than 41 sq ft. Please provide data and/or other evidence to support any 

claim general or specific that the size distribution of the fleet will or will not change as a 

result of this rule.” 

4) EPA Preamble Discussion of Clean Air Act benefits. Interagency commenters 

recommend that agencies remove discussion of the benefits and net benefits of previous 

non-GHG Clean Air Act regulations since it has no bearing on the benefits or net benefits 

of this rulemaking. The text has appeared in multiple other contexts, provides no new 

information, and takes up valuable space since commenters need to focus on the relevant 

text to read and provide meaningful comments. 

5) Interagency commenter thanks the agencies for the following response to a previous 

passback: 

EPA and NHTSA Response: 

We are not aware of empirical evidence on how or whether past fuel economy 

labels have changed purchase decisions. A literature review that contributed to 

the fuel economy labeling rule1 points out that consumers increasingly do a great 

deal of research on the internet before going to an auto dealer. In the pre-focus 

group survey results found in the final reports for the recently revised label puts 

some quantification to the importance of fuel economy in purchase decisions 

(found at www.nhtsa.gov/fuel-economy). In addition, manufacturers often use 

information of this type (from NCAP or other labels) in their advertising. To the 

extent that advertising and the label improve consumers understanding of the 

value of fuel economy, purchase decisions could change. Until the newly revised 

labels enter the marketplace with MY13 vehicles (or optionally sooner), the 

agencies may not be able to determine how vehicle purchase decisions are likely 

to change as a result of the new labels. Whether it will play a more prominent 

role in affecting consumer decisions is as yet unknown. 

                                                            

1 PRR, Inc., “Environmental Protection Agency Fuel Economy Label:  Literature Review.”  EPA‐420‐R‐10‐906, August

2010, available at http://www.epa.gov/fueleconomy/label/420r10906.pdf .
Summary of Interagency Working Comments Received on Draft rule under EO 12866 review. Subject to

further policy review.

4

Interagency commenter recommends that agencies summarize this response in the 

preamble and clarify in the preamble that agencies do not have estimates or evidence that 

the label will have any effect in influencing purchase decisions. 
1 

Interagency Comments Provided to EPA and NHTSA on November 10, 2011 

regarding the 2017-2025 Light-duty GHG/CAFE NPRM 

Interagency Comment 1) Interagency commenters recommend that EPA include a chapter in 

their RIA effects of learning costs and all learning assumptions. Commenters note that NHTSA 

includes a chapter on learning and the TSD includes more information on learning, but EPA RIA 

does not include this discussion. 

EPA Response: EPA has added a discussion of the EPA use of manufacturer learning by 

doing to Chapter 1 of the EPA Draft RIA, which is the EPA Draft RIA Chapter that discusses 

our technology cost estimates. We also point the reader to the Draft Joint TSD Chapter 3 for 

additional discussion of the cost learning curves. 

Interagency Comment 2) Interagency commenters recommend that EPA include the following 

highlighted language toward the end of the NAS report section under Appendix A- Sensivitities: 

“For the reasons described above, EPA has elected not to perform a sensitivity assessment 

based on the 2010 NAS Report. 

However, we are providing the underlying studies that were not available to be included 

in the NAS study for public comment. They are available [insert docket number]. Also, 

the 2011 Ricardo study commissioned by EPA was peered reviewed and those results are 

available [insert docket number]. 

We seek comment on the relative merits of providing alternative estimates of benefits and 

costs of this action using the 2010 NAS Report as a starting point. Also, we seek comment 

on how the recommendations of the peer reviewers of the Ricardo model can be 

incorporated in timely manner to be useful for the final rulemaking analysis, including: 

 The appropriateness of the baseline vehicles modeled in both the NAS report and the 

Ricardo model and the likely effect of the assumed baseline vehicles on the benefit 

and cost estimates of this proposal—including the potential to include a baseline 

model of a hybrid vehicle; 

 Incremental analysis and expansion of the technology “package definitions” to enable 

evaluation of the individual effects of a variety of technologies, including 

incorporating appropriate weight increases or decreases specific to each technology; 

 Clarification of assumptions made and the method of simulation, including providing 

fuel and efficiency map data for all engines used in simulation; and 

 Calibration of the Ricardo model and the validation of model results. 

 Estimation of technologies that have negative costs (i.e those that reduce fuel 

consumption AND reduce costs).”
2 

EPA Response: We have modified the discussion in the draft RIA Chapter regarding the 2010 

NAS. We have added new language which does the following; 

- A more detailed list of the new studies and information which EPA reviewed which 

were not reviewed or available to the 2010 NAS Committee, and we point to the EPA 

docket for this information, and we point to the draft Joint TSD for additional 

discussion of this information 

- We also request comment on the relative merits of EPA’s approach for estimating the 

cost and effectiveness for the full range of technologies considered by EPA, and the 

appropriates of an alternative approach of basing EPA’s estimates principally on the 

2010 NAS study’s estimates of cost and effectiveness. 

- We also request comment specifically on EPA’s use of the 2011 Ricardo study, and 

we seek comment on any ways to improve our estimates of technology effectiveness, 

including the use of full vehicle simulation modeling as was used in the 2011 Ricardo 

study. We point readers for the detailed discussion of the agencies use of the 2011 

Ricardo study in Chapter 3 of the draft Joint TSD, and we point the reader to review 

the adequacy of Ricardo’s updates to the report and the Ricardo response to 

comments which will be in the EPA docket. 

Regarding the interagency request to request comments on the baseline vehicles used in 

the Ricardo model as it relates to the 2010 NAS study. We are not aware that there are defined 

baseline vehicles in the 2010 NAS study. Regarding a hybrid vehicle for validation of the 

Ricardo results, EPA has provided a comparison assessment in Chapter 3 of the joint Draft TSD 

between of the actual fuel economy performance of the MY2011 Sonata Hybrid and the 

estimates used in this proposal, which were based on the Ricardo simulation, which shows very 

good agreement, see Chapter 3.3.2.3 of the draft Joint TSD, Table 3-19. Regarding the fueling 

maps, EPA has provided in the Joint TSD Chapter 3 a map of the 27bar engine cooled EGR 

turbo-charged, downsized, GDI engine used by Ricardo for commenters to review, see Figure 3-

11 in the draft Joint TSD. We used the data from the Ricardo model to reverse engineer that map 

so commenters can assess its’ appropriateness. Regarding the “incremental analysis” comment – 

this comment is significantly beyond the scope of the Ricardo project – which was specifically 

focused on assessing technology packages. The final interagency comment is not related to the 

Ricardo work, as that study only analyzed technology effectiveness. 

Interagency Comment 3) Effect of rule on the distribution of the fleet footprint . Interagency 

commenters recommend that EPA and RIA include the following description in the Preamble 

discussion of safety impacts: 

“The standards in this proposal are intended to eliminate to comply by changing the size 

(i.e., footprint) of vehicles. This is a well-understood problem with prior “flat” 

standards, which the National Academy of Sciences concluded [2002 report] led to 

adverse safety consequences, among other effects. Nevertheless the agencies 

acknowledge it is possible that changing the footprint could, under certain 

circumstances, be a relatively low-cost means of achieving compliance with the 

standards proposed today. This could happen in one of two ways. Manufacturers could 
3 

change the size of a vehicle during the redesign cycle in order to increase overall fuel 

economy relative to the target for that particular vehicle size. (Footnote: Suppose, for 

example, a 50-square-foot vehicle would exceed its target by 2 mpg, but a redesigned 

new vehicle would cost the same but exceed the slightly larger target by 3 mpg.) 

Alternatively, instead of redesigning vehicles, manufacturers could lower the price and 

increase production of vehicles of sizes whose fuel economy is favorable (well above the 

target for that footprint) and/or increase the price and decrease production those whose 

fuel economy is unfavorable. For example, the agencies note that the standard is flat for 

vehicles smaller than roughly 41 square feet. Further downsizing in this category could 

be a relatively low-cost way of helping achieve overall compliance. To the extent 

manufacturers engage in either behavior, the net result would be vehicles larger or 

smaller on average than they otherwise would have been in the absence of this 

regulation. Changes to the average size, and/ or the distribution of vehicle sizes, could 

also have important implications for the overall safety of the new vehicle fleet. For 

various reasons, the analysis assumes this rule will not have either of the effects 

described above. In other words, it will have no effect on the sales-weighted distribution 

of vehicle footprints. In particular, the analysis assumes production of vehicles with 

footprints where the curve is flat (i.e., below 41 square feet) will not increase over their 

baseline levels (i.e., those that will exist in MY 2016) as a result of this rule. We seek 

comment on the appropriateness of the overall assumptions that this rule will have no 

effect on the overall sales-weighted distribution of vehicle footprints of on the sales of 

vehicles smaller than 41 sq ft. Please provide data and/or other evidence to support any 

claim general or specific that the size distribution of the fleet will or will not change as a 

result of this rule.” 

EPA and NHTSA Response: EPA and NHTSA will add additional language to Preamble II.G. 

regarding this topic and requesting comment on our assumption of no change in footprint in 

response to the proposed standards. 

Interagency Comment 4) EPA Preamble Discussion of Clean Air Act benefits. Interagency 

commenters recommend that agencies remove discussion of the benefits and net benefits of 

previous non-GHG Clean Air Act regulations since it has no bearing on the benefits or net 

benefits of this rulemaking. The text has appeared in multiple other contexts, provides no new 

information, and takes up valuable space since commenters need to focus on the relevant 

text to read and provide meaningful comments. 

EPA Response: EPA believes this discussion is useful as an overview of mobile source 

regulations under Title II of the Clean Air Act, and we decline the suggestion to remove it. 

Interagency Comment 5) Interagency commenter thanks the agencies for the following 

response to a previous passback: 

EPA and NHTSA Response: 
4 

We are not aware of empirical evidence on how or whether past fuel economy 

labels have changed purchase decisions. A literature review that contributed to 

the fuel economy labeling rule1 points out that consumers increasingly do a great 

deal of research on the internet before going to an auto dealer. In the pre-focus 

group survey results found in the final reports for the recently revised label puts 

some quantification to the importance of fuel economy in purchase decisions 

(found at www.nhtsa.gov/fuel-economy). In addition, manufacturers often use 

information of this type (from NCAP or other labels) in their advertising. To the 

extent that advertising and the label improve consumers understanding of the 

value of fuel economy, purchase decisions could change. Until the newly revised 

labels enter the marketplace with MY13 vehicles (or optionally sooner), the 

agencies may not be able to determine how vehicle purchase decisions are likely 

to change as a result of the new labels. Whether it will play a more prominent 

role in affecting consumer decisions is as yet unknown. 

Interagency commenter recommends that agencies summarize this response in the preamble and 

clarify in the preamble that agencies do not have estimates or evidence that the label will have 

any effect in influencing purchase decisions. 

EPA and NHTSA Response: We will insert language into the EPA Preamble III and NHTSA 

Preamble IV discussing this issue.