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 comments received during EO 12866 review of the draft 

proposed rule establishing GHG emissions standards and fuel efficiency standards for medium 

and heavy duty trucks. They are for your consideration and subject to further policy review. 

1. Two summary tables for executive summary of the NPRM and executive summary of the 

RIA 

Interagency commenters recommend that the agencies reproduce the following table from 

the recent light-duty rule for this NPRM and include this summary table in the executive 

summary of the RIA and NPRM. 

Table I.C.2-1 EPA’s Estimated 2012-2016 Model Year Lifetime Discounted Costs, 

Benefits, and Net Benefits assuming the $21/ton SCC Valuea,b,c,d (2007 dollars) 

3% Discount Rate $billions 

Costs $51.5 

Benefits $240 

Net Benefits $189 

7% Discount Rate 

Costs $51.5 

Benefits $192 

Net Benefits $140 a

 Although EPA estimated the benefits associated with four different values of a one ton GHG 

reduction ($5, $21, $35, $65), for the purposes of this overview presentation of estimated 

costs and benefits EPA is showing the benefits associated with the marginal value deemed to 

be central by the interagency working group on this topic: $21 per ton of CO2e, in 2007 

dollars and 2010 emissions. The $21/ton value applies to 2010 CO2 emissions and grows 

over time. 

b

 As noted in Section III.H, SCC increases over time. The $21/ton value applies to 2010 CO2

emissions and grows larger over time. 

c

 Note that net present value of reduced GHG emissions is calculated differently than other 

benefits. The same discount rate used to discount the value of damages from future emissions 

(SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal 

consistency. Refer to Section III.H for more detail. 

Please also include another summary table that presents the annualized costs, benefits 

and net benefits in 3% and 7% discount rates. 

2. Analysis of alternative levels of stringency. 

Several interagency commenters recommend a clear summary of the net benefits of the 

alternative levels that were analyzed. They suggest a full presentation of all monetized 

costs and benefits of the various alternatives, and suggest that a version of Table VIII-28 

be presented alongside Tables IX-2 and IX-3 (e.g., as new Table IX-4) so that the 

monetized costs and benefits (and net benefits) of each alternative will be clearly 

presented for the lifetimes of model years 2014 to 2018 vehicles. In order to reduce the 

amount of data in the added table, the presentation of various SCCs could be eliminated 
Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. 

Subject to Further Policy Review 

2 

and the single interagency working group SCC value could be used for the summary. 

Further, this new table could break out technology costs and fuel savings by regulatory 

category (as is currently done in Tables IX-2 and IX-3). In addition to these tables, 

please also include a table summarizing the annualized costs, benefits, and net benefits of 

all alternatives analyzed in this NPRM. 

Also, several commenters raised concerns with Tables IX-2 and IX-3 and the 

presentation of estimates of annual technology costs and reductions in emissions and oil 

use for 2030 and 2050. The emphasis on annual costs in 2030 and 2050 might be 

inappropriate for this analysis of alternatives for several reasons, including: the 

significant uncertainties associated with estimating such distant impacts, the uncertainty 

about the appropriate baseline (as raised in interagency discussions), and the reality that 

this rule is almost certain to be revisited and revised long before 2030 (let alone 2050). 

Multiple interagency commenters recommend that Tables IX-2 and IX-3 be revised to 

present data for near-term model years that are specifically impacted by the standards, 

e.g., 2014 and 2018, and that the presentation of data for 2030 and 2050 be removed. 

3. Treatment of Fuel Savings. 

Interagency commenters recommend that the agencies include the following statement in 

the Preamble and the RIA where fuel savings are first included in the cost category: 

“Fuel savings are included in the cost category in the following tables instead of the 

benefits category to showcase the impacts from the manufacturers’ standpoint. From a 

social standpoint, these fuel savings are benefits.” 

4. Discussion of penalties/alternative compliance fees. 

Interagency commenter request that EPA/NHTSA place a reference to penalty discussion 

in the section on flexibilities (currently it is in its own subsection on penalties), noting 

that an alternative compliance fee could serve as a cost containment mechanism and 

source of regulatory flexibility, although that in this rule EPA is statutorily limited in 

what types of “fine-based compliance mechanisms” it can offer. 

Also, the sections on penalties contains some language that initially appears 

contradictory, noting on page 295 that “NHTSA recognizes that EPA also has authority 

to impose civil penalties for non-compliance with GHG regulations,” while also stating 

on the next page that “NCPs are authorized for heavy-duty engines and vehicles under 

section 206(g) of the Clean Air Act (CAA) as the only fine-based compliance mechanism 

available to manufacturers.” Some further clarification in this section on agencies’ 

ability to impose civil penalties would be helpful. 

5. Welfare loss 

Several commenters suggest the following edits: 
Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. 

Subject to Further Policy Review 

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“The costs estimates include the costs of holding other vehicle attributes, such as 

performance, constant. As discussed in the 2010 light-duty GHG/CAFE rule, if other vehicle 

attributes are not held constant, then the cost estimates do not capture the impacts of these 

changes.1 The agencies seek comments and supporting data and analyses of any additional 

impacts of the proposed standards on vehicle attributes and performance not addressed in this 

analysis. The agencies also seek comment on whether an analysis of welfare loss, as 

conducted in the light-duty GHG/CAFÉ rule, should be done for this rule at the final rule 

stage.” 

6. Averaging, Banking and Trading Language. 

We received the following suggested edits (in red) for your consideration: 

“In the past, we have followed the practice of allowing averaging and trading between like 

products because we have recognized that the estimation of emissions credits is not an absolutely 

precise process, and actual emissions reductions or increases “in use” would vary due to 

differences in vehicle duty cycles, maintenance practices and any number of other factors. By 

restricting credit averaging and trading to only allow averaging and trading between like 

products, the agencies gain some degree of assurance that the operation and use of the vehicles 

generating credits and consuming credits would be similar. The agencies also note that some 

industry participants have expressed concern that allowing credit averaging, banking and trading 

across different products may create an unlevel playing field for the regulated industry. 

Specifically, engine and truck manufacturers have commonly expressed to us a concern that 

some manufacturers with a wide range of product offerings spanning a number of regulatory 

categories would be able to use the ABT program provisions to generate credits in regulatory 

class markets where they face less competition and then use those credits to compete unfairly in 

other regulatory categories where they face greater competition. Finally, in the context of 

regulating criteria pollutants that can have localized and regional impacts, we have been 

concerned about the unintended consequence of unrestricted credit averaging or trading on local 

or regional concentrations of these pollutants, whereby emissions reductions might become 

concentrated in some localities or regions to the detriment of other areas needing the reductions. 

The agencies are evaluating the possibility of placing fewer restrictions on averaging and trading 

because increasing the flexibility offered to manufacturers to average, bank, and trade credits 

across regulatory subcategories and categories could potentially significantly reduce the overall 

cost of the program. Specifically, we request comment on the extent to which a difference – or 

unexpected difference -- in the marginal costs of compliance per gallon of fuel saved or ton of 

GHG reduced across categories or subcategories, combined with provision for averaging and 

trading across categories and subcategories, can allow manufacturers to achieve the same overall 

reduction in fuel use and emissions at lower cost. 

 
Summary of Interagency Working Comments Received on Draft Rule under EO 12866 Review. 

Subject to Further Policy Review 

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While trading restrictions in the context of past EPA rulemakings have been motivated in part by 

the local or regional nature of the pollutant being regulated, in this instance, opportunities for 

greater flexibility may exist in light of the fact that greenhouse gases are a global pollutant for 

which local consequences are related to global, not local or regional atmospheric concentrations. 

However, trading ratios may need to be established for averaging and trading across categories, 

and potentially across subcategories, to ensure that averaging and trading across categories and 

subcategories does not lead to a net increase in emissions or fuel use in light of differences in 

vehicle use patterns across categories and subcategories. Further, it is possible to design trading 

ratios that ensure a net reduction in emissions and fuel use as a result of averaging and trading. 

The agencies also request comment on the potential additional savings in costs (beyond those 

already calculated in this proposal) that can be achieved by increasing flexibility in averaging 

and trading provisions, on how such averaging and trading flexibilities could be designed to 

ensure environmental neutrality, on whether trading ratios should be designed to achieve a net 

reduction in emissions and fuel use as a result of trading, on the concerns that have been raised 

by some regarding impacts on intra-industry competition, and on how to address the aboveidentified concerns about dissimilarities in operation and use of vehicles.”