# Ceres Testimony of Ceres Regarding EPA and NHTSA's Proposed Phase 2 Greenhouse Gas Emission Standards and Fuel Efficiency Standards for Medium- and Heavy-D uty Vehicles , Engines , and Tra ile rs August 18 , 2015 My name is Kirsten James , and I am the Senior Manager of California Policy and Partnerships at Ceres ; our organization 's mission is to mobilize investors and business leaders to build a thriving, sustainable global economy. Ceres coordinates three networks of investors and business leaders: (1) The first is the Investor Network on Climate Risk (I NCR) which consists of more than 110 institutional investors, with assets exceeding $13 trillion, (2) the second, Businesses for Innovative Climate and Energy Policy (BICEP) , is an advocacy coalition of leading businesses committed to working with pol icy makers to enact meaningful energy and climate legislation, (3) and finally, Ceres 's company network, which includes nearly 70 member companies , over half of which are listed on the S&P500 Index. Ceres commends EPA and NHTSA for taking action to address fuel efficiency and GHG emissions associated with the medium- and heavyduty vehicle sector, and for its thorough and inclusive rulemaking process . We urge EPA and NHTSA to strengthen the proposed Phase 2 standard under consideration today .by adopting a standard requiring a 40°/o reduction in fuel consumption compared to 2010 by 2025; Alternative 4 comes closest to that standard. Freight trucks currently account for over half a billion tons of GHG emissions per year and are the fastest growing single source of GHG emissions in the United States. Strict standards will catalyze investment in high efficiency truck technologies , thereby serving to retain the U .S. leadership position i n this sector, save businesses money , promote energy security and reduce climate risk . Such standards would be important drivers of economic growth , benefiting business , the trucking industry , and American consumers. Despite higher upfront costs , advanced fuel-efficient trucks will more than pay for themselves over a typical ownership period due to fuel cost savings . A joint analysis by Ceres and the Environmental Defense Fund found thesestandards would reduce freight costs by 3% in 2030 and 7% in 2040 , an esti mated $34 billion annual saving potential. 1 Furthermore , these benefits would accrue to the greater economy and American consumers ; as operating costs come down due to more fuel-efficient trucks , business owners and consumers will reinvest that money in goods and services throughout the economy . Under stricter standards , the average U .S. household stands to save $250 per year in lower priced goods.2 I 'd also like to highlight the Global Investor Statement submitted with my testimony , which was coordinated by Ceres . The statement was signed by 285 investors , both owners and asset managers , representing assets of over $20 trillion , and included a call for strict vehicle standards as a means of both minimizing climate risk and helping provide a long-term policy framework that will shift the investment risk-reward balance in favor of less carbon -intensive investment. Strict standards are also key to retaining the US leadership position in efficient truck manufacturing , and expanding job opportunities in that sector. We are currently the world leader in the development , production and use of energy efficient and hybrid trucks . Without strong standards in place , companies and investors will lack the requisite certainty to invest in the development and production of new technologies that will allow us to retain our primary position and increase job growth . Strong standards are also critical to national energy security . We are increasingly dependent on trucking , and need to minimize our vulnerability to fuel price volatility . Standards requiring the use of existing and emerging technologies would significantly reduce our dependence on oil. According to 2014 study by organizations including the Union of Concerned Scientists and the American Council for an Energy-Efficient Economy , a stronger standard requiring a 40°/o reduction in fuel consumption by 2025-would decrease daily oil consumption by 1.4 million barrels per day by 2030. 3

1 M . J . Bradley and Associates LLC , " EPA /NHTSA Phase 2 Fuel Efficiency & GHG Standards for Freight Trucks : Projected Effec t on Fre ig ht Costs ." May 2015 . Web . http :// www.ceres .o rg/trucksavings 2 Coop er , Mark Dr. and G i lli s, Jac k. "The Co nsu me r Ben efits of Increasi ng th e Fuel Eco nomy of Medium and Heavy Duty Trucks . " The Consumer Federation of America. Feb ruary 201 4 . Web . http ://www. consumerfed .org/pdfs!Paying the-F reight..Qdf 3 American Council for an Energy-Efficient Economy (ACEEE ) , Envi ronmental Defe nse Fund (EDF) , Natural Resources Defense Council (NRDC) , Sierra Club , and Union of Concerned Scienti sts (UCS) . 2014 . Big fuel savi ng s available i n new tru cks . Web . http ://aceee .o r glfiles /pdflfact-sh ee!Aruck-savings-0614 . pdf, acc essed June 29 , 201 5 .Ceres agrees with the Cal ifornia Air Resources Board (CARS) , which recommends the adoption of the Alternative 4 standards at a minimum , stating this option is both technology forcing and technologically feasible . Accelerating the timeline to require compliance by MY2024 is a costeffective way to rapidly reduce emissions . A recent CARS report indicates vehicle technology payback periods under Alternative 4 remain virtually unchanged compared to A lternative 3 , with the exception of pickups and vans , which stand to gain just a single year.4 Finally , companies in a variety of sectors are increasingly interested in tracking Scope 3 emissions, including GHG emissions associated with transportation and freight movement, as part of their publicly disclosed GHG assessment. Thus , a growing number of companies support policies such as strict truck standards that would help them achieve their own GHG emission reduction goals as well as save money. A recent Wall Street Journal op-ed co-authored by lndra K. Nooyi , Chairman and CEO of PepsiCo , takes the position that better standards are better for the environment 

### and businesses , explaining that strong standards will cut costs and allow companies to reinvest in their products and compete in their industry . 5 Likewise , a recent article written by Jostein Solheim , the CEO of Ben 

### & Jerry's , in the Guardian describes simi lar benefits for companies that rely on trucking to get thei r products to market. Notably , Mr. Solheim calls for a 40% reduction in heavy truck fuel consumption by 2025. 6 I n sum , we urge E PA and NHTSA to adopt standards requiring a 40% reduction in fuel use by 2025 . Such technology forcing standards would drive innovation , catalyze investment in high efficiency truck and supplier manufacturing , as well as promote energy security and reduce climate risk . It is time to move forward aggressive ly with policies that will optimize private investment in a low carbon economy , cut freight costs , and reduce GHG emissions from the trucking sector. Thank you for the opportunity to speak today , and your leadership on this important issue.

4 California Environmental Protection Agency Air Resources Board , Update on the Proposed Federal Phase 2 GHG and Fuel Efficiency Standards for Medium- and Heavy-Duty Vehicles . July 23. 2015 . Sacramento, California. Web . http ://insideepa .com//siteslinsideepa .comlfiles/documentsftul201 5/epa2015 1591 .pdf 5 Nooyi , lndra K., and Fred Krupp . " Delivering a Greener Fleet of Trucks ." WSJ. N . p ., 19 June . 2015 . Web . 6 Jostein Solheim . " I Scream , You Scream , We All Scream-For H ig her Fuel Emissions Standards ." The Guardian. N . p . , 3 July. 2015 . Web .**\V"'\V'\V,('(.:rc..•..;,,,r~**