NHTSA-EPA Joint ProposedRulemaking: Summary of KeyPublic CommentsBriefing for OMBDecember 2, 2009EPA-NHTSA Deliberative Material2AgendaSummary of key public commentsKey inputs for NHTSA and EPAmodelsSchedule for Final Rule & Next stepsReview of Public Comments toDateMore than 129,000 comments submitted thus far toEPA and NHTSA docket~130 substantive comments from organizationsVast majority of letter writing campaigns support joint ruleComments will continue to come in over next few days, asprocessed through the docket staffEPA and NHTSA staffs are still in the process ofreceiving and reviewing commentsToday, we’re sharing our preliminary assessment ofthe key issues identified thus far in our reviewFor various issues, we give an indication of some ofthe key commenters, but by no means is this meantto be an inclusive listEPA-NHTSA Deliberative Material3EPA-NHTSA Deliberative Material4Overview of Public CommentsThere is significant support forthe central tenets of the NPRMCoordinated EPA-NHTSA set of standards which phase-in MY2012-2016 and achieve250 g/mi CO2 and 34.1 mpgSupported by:Major auto OEMS (GM, Ford, Chrysler, Honda,Toyota, Nissan, BMW, VW, Daimler, Alliance ofAutomobile Mfrs, AIAM)California & other states (CARB, NACAA, NJ, MA, NJ)NGOs (NRDC, UCS, EDF,Sierra Club, ConsumerFederation of America)Comments not supportive of proposalA few commenters not supportive of National Program(Heritage Foundation, NADA)Center for Biological Diversity commentedthat significantly more stringent standardsare appropriateMany industry trade groups oppose EPAfinalizing the vehicle standards due toconcerns with the implications for stationarysources (relationship with EPA’s proposedPSD Tailoring rule and Endangerment finding)National Association of Manufacturers, American Chemical Council, American Meat Institute,American Farm Bureau Association, US Chamber of Commerce, many othersSeveral commenters applauded EPA and NHTSA for the transparency ofanalytical work supporting the proposal(Sierra Club, UCS, ACEEE, Univ. of MichiganTransportation Research Institute (UMTRI), Public Citizen, Ctr for Bio Diversity, Kleinbaum)There are many importantissues which EPA & NHTSA will work jointly toaddressEPA-NHTSA Deliberative Material5Key commentsSmall volume manufacturers treatment by EPALess stringent standards/additional leadtime for smallervolume, niche, luxury/high-performance vehiclemanufacturers(Jaguar/Landrover, Porsche,Aston-Martin, Ferrari, AIAM)Electric vehicle CO2 impacts under EPA programWhether to include upstream emissions in tailpipe gram/mileemissions(environmental NGOs, states, Honda support; other autos do not for2012-2016)Truck footprint curve shapeTruck stringency for large footprints(GM)Truck curve upper and lower kink points(GM, Honda, Toyota)Phase-in rate for 2012-2015 standardsAuto Alliance, Ford, Toyota suggest morelinear, less-stringent near-term stds.CARB supports the proposed std. phase-in ratesEPA-NHTSA Deliberative Material6Key comments (continued)Social Cost of Carbon~20 commenters (4 focused entirely on SCC):EDF & NYU, NRDC, Pew,Steven Rose, UCS, NACAA, CARB, UC Santa Barbara, Alliance, NADA, Center for Bio Diversity,NESCAUM, CT DEP, NJ DEP, National Petrochemical Refiners Association,National Rural ElectricCooperative Association, Institute for Energy ResearchComments from autos, states, NGOs, and academia focused ondiscount rate selection and use of SCC in benefit-cost analysis.Discount rate: Most said 5% is toohigh, noting legitimate efficiencyarguments for lower rates, while anauto group called for higher rates.Use of SCC: Detailed comments about appropriate use of SCC inbenefit-cost analysis; one recommended using alternative to SCC.Other key comments.SCC underestimated:Identified omitted impacts; recommended longterm values account for uncertainty and risk premiums.Scope of SCC: Most supported global values, NADA recommendeddomestic.Distribution: Reliance on single value (e.g., mean) does not adequatelycapture distribution of estimates, especially fat right tails.Development of long-term values: Some recommended agenciesprovide strong justification, especially for discount rate selection, andsupported new model runs.EPA-NHTSA Deliberative Material7Key comments (continued)Consumer welfare and valuation of fuel savingsMany comments note a number of market/behavioral failures in the provision offuel economy and cite these failures as a basis for regulation(ConsumerFederation of America, ACEEE,UCS, UMTRI, Investor Networkon Climate Risk, CARB, NYUInstitute for Policy Integrity, International Council on Clean Transportation (ICCT), NRDC,Domini Social Investments)These include asymmetric and absent information, imperfect competition, lossaversion, lack of choice over fuel economy within classes, bounded rationality, andother “energy paradox” issues, aswell as vehicles as positional goods (vehicles conferstatus; fuel-inefficiency may result from“keeping up with the Joneses” in vehiclepurchases)A number observe that the rule protects the existing variety and choice of vehicles onthe market (e.g., CARB, NESCAUM, NJ DEP)Some argue that automakers as well as consumers will be better off with improvedfuel economy (UMTRI, Investor Network on Climate Risk, Kleinbaum)Two commenters argue that the marketfor fuel economy is operatingefficiently(UAW, Institute for Energy Research)If consumers wanted more fuel-efficientvehicles, someone would have offered them.Auto companies appear not tohave commented on this issueEPA-NHTSA Deliberative Material8Key comments (continued)Mass reduction and impact on safetyCenter for Auto Safety, NRDC, Several auto OEMs, Public Citizen & SafeClimate Campaign, ICCT, NACAA, Tom Wenzel, CARB, American Iron andSteel Inst., SABIC Innovative Plastics, Dynamic Research Inc., CompetitiveEnterprise Institute...EPA proposed N2O and CH4standardsAutos oppose standards for N2O and CH4, but if inevitable, would preferinclusion in a fleetwide CO2-equivalent standard; default values for N2O toavoid measurement costsSeveral NGOs, MECA support cap standardsEPA program flexibilities (early credits, TLAAS, ATV credits, off-cycle credits, FFV credits, A/C credits)Many, many comments by autos, states, environmental NGOsAuto’s generally support proposal or ask for an expansionStates and environmental groups concerned with any expansion andpotential windfall creditsEPA-NHTSA Deliberative Material9Key comments (continued)NHTSA request for comment on A/Ctest procedures for light trucksAuto Alliance and GM oppose CAFE A/C mpg creditsToyota, Chrysler, and Daimler support CAFE A/C mpg creditsBackstop standardAutos generally opposed,environmental groups and several states supportedGHG certification & compliance provisionsNumerous technical comments, mainly from autos, some NGOsTransparency in compliance reporting to public(EDF, NRDC, UCS, Public Citizen & SafeClimate Campaign)Technology effectiveness and costs(GM, MECA, Motor & Equip MfrsAssn, ICCT, Honeywell, NESCAUM,CARB)Indirect costsUse of indirect cost multipliers generally supported(UMTRI, CARB, ICCT, NESCAUM)Economic and other assumptions:Discount rates(NRDC, NADA)Monopsony benefits(NYU)Rebound effect(NADA, CARB, ICCT)Refueling benefitsScrappage rates(CARB)Fuel Prices(CARB, NADA)EPA-NHTSA Deliberative Material10Key Model Inputs for NHTSA & EPASocial cost of carbonDiscount ratesMonopsonyFuel pricesCriteria pollutant $/ton valuationVMT rebound effectValue for increased noise/accidents/congestion from reboundValue of additional driving from reboundValue from reduced refueling eventsTechnology costs and effectivenessVehicle reference fleet projectionOverview of Key Public Comments on the EIS“No Action” Alternative: DEISshould account for reasonably foreseeable actions of statesand agencies that will affect GHG emissions from the transportation sectorSierra Club, Public Citizen & CBDContext:Place impacts in context that provides basis for comparison between alternatives ( 

# e.g., consideralternatives in terms of reducingGHG emissions to 1990 levels by 2020) (Sierra Club, Public Citizen &CBD)DEIS minimizes climate change impacts by analyzing them as proportion ofglobal GHG emissionsinstead of emissions from motor vehicles or the US transportation sector (Sierra Club, Public Citizen& CBD)Consultation: NHTSA must complete Endangered Species Act Section 7 consultation toensure action will not jeopardize/adverselymodify critical habitat of threatened orendangered speciesSierra Club, Public Citizen & CBDNational Security: DEIS shouldassign national security valueto the benefit of reducing oilconsumptionConsumer Federation of AmericaKey Public Comments on the EIS (continued)ComplexityDEIS does not adequately inform public because it is too complex and inaccessible to alayperson (Public Citizen)AlternativesDEIS fails to analyze a “technology forcing”/ “technology exhaustion” alternative(Sierra Club, Public Citizen & CBD)Environmental ImpactsDEIS does not account for emissions associated with generating electricity that willcharge plug-in hybrids and electric vehiclesin future vehicle market (Public Citizen)Health ImpactsHealth-related consequences of factors, suchas increasing demand for, and decreasedavailability of, fossil fuels,should be analyzed pursuantto NEPA (Centers for DiseaseControl and Prevention)EPA-NHTSA Deliberative Material13Joint NHTSA/EPA Final RuleSchedule & Next StepsDraft Final EIS circulated for inter-Agency ReviewFeb 4Formal submission of available FRM package sections to OMBFeb 15Final EIS completed and sent to EPA for FR printing and mailed tostakeholdersFeb 22Formal submission of FRM package to OMBFeb 28FRM cleared by OMB and Signature by DOT/ EPAMar 31