Time for Canada to ‘Divorce’ U.S. on Tailpipe Emission Standards

After six years of adopting U.S. tailpipe emission standards by default, two Ottawa-based climate and energy analysts say it’s time for Canada to chart its own course, after Environmental Protection Agency Administrator Scott Pruitt announced plans to water down his country’s emissions and fuel economy standards for cars and light trucks.

“Since this marriage in 2012, Canada and the United States have had an amazing run,” write Équiterre’s Annie Bérubé and the Pembina Institute’s Isabelle Turcotte, in a post late last week for Policy Options. “But all signs now point to irreconcilable differences, and it’s time to file the paperwork for a vehicle standards divorce.”

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Transportation accounts for 25% of Canada’s carbon pollution, the country will add more than two million new vehicles this year, and “Canadian consumers, influenced by the auto industry’s marketing, are also choosing to buy heavy, high-emitting vehicles. Light trucks represent over 70% of new vehicles sold annually in Canada,” Bérubé and Turcotte note.

But with tougher regulations in place, “Canadian consumers can be assured that their next vehicle will be more fuel efficient than the previous one. It is projected that cars for model year 2025 will consume up to 50% less fuel than 2008 models.” Environment and Climate Change Canada estimates that a 2025 vehicle model will save its owner C$900 per year compared to this year’s equivalent.

Moreover, Canada’s regulations are flexible enough to allow automakers several pathways to meet fleet efficiency targets, and compliance costs have been consistently overestimated, the two authors state. “Compliance costs for the adopted 2025 standards will be 34% to 40% lower than projected in the latest U.S. midterm evaluation regulatory analysis,” the International Council on Clean Transportation concluded in 2017.

And the auto parts manufacturers that have been preparing for tougher standards are not at all pleased with Pruitt’s deregulatory bent. “We have been investing hundreds of billions of dollars in lightweighting and also alternative propulsion,” said Automotive Parts Manufacturers’ Association President Flavio Volpe. “If that standard is lowered, at this late stage, in some cases it threatens to strand some of that advanced research and development spending.”

Canada does have an alternative to being swept along by the Trump administration’s emissions policy: California has the right to set its own, tougher standard, and 15 states plus the District of Columbia are entitled to follow that standard under Section 177 of the U.S. Clean Air Act. “To keep our own regulations strong and achieve our 2030 emissions targets, Canada needs to split from the U.S. federal regulations or consider cozying up to California, to maintain the current stringency of the standards to 2025,” Bérubé and Turcotte write. “These regulations are essential for responding to the urgent climate crisis, ensuring that Canadian car manufacturers can compete in the global low-carbon economy, and saving consumers money.”