December 21, 2017

Time to Wake Up: CAFE

Mr. President, I am here now for the 190th ‘‘Time to Wake Up’’ speech to talk about an issue that falls at the intersection of climate change and jobs and consumer power and protection. You would think that a policy that simultaneously reduces the carbon emissions responsible for climate change, and boosts American industrial competitiveness, and puts thousands of dollars back into the pockets of American consumers would be pretty universally popular.

Unfortunately, you would be wrong.

The Corporate Average Fuel Economy standards, known as the CAFE standards, set a minimum threshold for the average fuel economy of cars and light trucks that are sold in the United States. In 2011, the major automakers here in America—Ford, GM, and the others—enthusiastically endorsed voluntary new fuel efficiency standards which would gradually increase the fuel economy for their cars and light trucks to 54.5 miles per gallon on average by 2025.

Think about that for a second. In 2011, average fuel economy for these vehicles was stuck below 30 miles per gallon. The CAFE standards hadn’t budged in years, and as a result, our automakers had stopped innovating to make cars more fuel efficient. They didn’t have to make them more fuel efficient. And when gas prices soared in the mid-2000s, it was consumers who were on the hook.

Today, thanks to the voluntary agreement that was reached by the automakers, the CAFE standard is presently over 40 miles per gallon for cars and over 30 miles per gallon for light trucks. Consumers have already saved $42 billion at the pump because of those increased fuel economy standards. Consumers who purchase a new car in 2025, on average, will save about $8,000 on gas over the lifetime of that car because of those new fuel economy standards.

Of course, it is not just the consumers who win under the new CAFÉ standards. The environment also wins. Already the American auto fleet’s increased average fuel economy has resulted in 195 million fewer metric tons of carbon emissions, and, of course, with the carbon emissions come all the rest of the pollution out of a car’s tailpipe, so it is a big environmental benefit. Over the life of the CAFE standards program, total carbon emissions reductions should total 6 billion metric tons. This is huge because transportation is now the largest source of carbon emissions in the United States, and carbon emissions from cars and light trucks account for almost one-sixth of the Nation’s total.

If we are to be successful in keeping the average global temperature increase under 2 degrees Celsius—the upper bound, beyond which scientists tell us the consequences of climate change will likely be irreversible—then we have to significantly reduce our auto emissions. That is the target of the Paris climate agreement, which is represented here in this graph, from business as usual here, to all of the carbon emissions savings and efficiencies necessary to reach our Paris goal right here. Of all of this—power sector, industrial sector, efficiencies, home sector—all of it—this gold wedge right here represents the piece of it that we achieve by meeting these CAFE standards. So it is pretty important to meet those standards if we are going to hit the Paris climate goals, and it is pretty important to hit the Paris climate goals if we don’t want to condemn our children and grandchildren to a very hazardous future. Here is what is strange.

The exact same set of industry players who voluntarily signed onto and supported the stronger fuel efficiency standards just 4 years ago through their trade association are now working hand in hand with EPA Administrator Scott Pruitt—when something bad is happening for the environment, you can almost always find him around—to weaken them, to undo what they voluntarily agreed to and promised the American people. Following the election of Donald Trump, the Auto Alliance—the trade group that represents automakers like Ford, General Motors, Toyota, and Volvo—claimed that the very same standards the automakers had voluntarily supported just a few years before now reflect what they call an ‘‘extraordinary and premature rush to judgment.’’ Shortly after Pruitt came into office, the Auto Alliance asked him to revisit the standard. By the way, just before I gave this speech, I googled ‘‘Auto Alliance.’’ I went to their website, and I hit the search engine on it. I typed in ‘‘climate change’’ and hit ‘‘search.’’ Those words ‘‘climate change’’ do not appear on the Auto Alliance’s website, to give you an idea how seriously they take this problem, at least at the trade association level. So the Auto Alliance, when Pruitt came in, asked him to revisit this CAFE standard that their member companies had all agreed to. Pruitt, who, as Oklahoma’s attorney general, had been notoriously compliant to industry, gladly complied.

The Auto Alliance has a long history as the trailing edge of the automotive industry, opposing seat belts, opposing air bags, and opposing catalytic converters. Now, in the polluter-friendly Trump administration, it sees a tempting chance to sell more gas-guzzlers. But is that smart? Over the long term, does this risk actually consign American automakers to global irrelevance? We sell these cars in an international market, so let’s look at what that international market is moving to.

Countries around the world have realized that the future of the automobile lies not with the gasoline-powered internal combustion engine, but with alternative sources of power—electricity or hydrogen fuel cells, for instance. By the way, I just got a Chevrolet Bolt, the all-electric car. Not only is that good for the environment, it is a wonderful car to drive. It is a fun car to drive. It is great vehicle.

China, the world’s largest car market, recently announced that by 2025, 20 percent of new cars sold there must run on alternative fuels, and it is on its way to an eventual total ban of the sale of gasoline and diesel-powered cars. That is where the biggest car market in the world is headed.

The European Union is the world’s third largest car market. The Netherlands has announced that starting in 2030, all cars sold must be emissionsfree. Belgium is considering a similar measure. France and the United Kingdom will ban sales of new gasoline and diesel-powered cars starting in 2040. Norway, while not a member of the EU, is very much part of that European economy. They are even more ambitious. By 2025—just over 7 years from now—all new cars sold in Norway must be emissions-free.

Moving on to Japan, the world’s fourth largest car market—Japan now has more electric charging stations than it has gas stations. India is the fifth largest car market. It has announced that by 2030, all new cars sold there must be electric or hybrid vehicles.

So with the entire world moving toward cleaner, newer technology and innovative vehicles, why does this automotive lobby group—the Auto Alliance—suddenly want to renege on the promise its members made to the American people to raise and abide by those CAFE standards? We should hope that our business leaders would be honorable enough to keep their word. That is a fairly basic proposition. But if the future of the industry lies with ever more fuel-efficient cars—hybrids, electric cars, fuel cell cars—why would the auto industry in America be furiously lobbying the Trump administration to go backward? Breaking your word to go backward doesn’t seem to make sense, even from a business point of view.

Electric vehicles and alternative fuel vehicles represent the future of the auto industry. China and other countries get this. The Chinese are trying to poach our electrical engineers to develop their automotive industry so that it can one day beat ours. Meanwhile, executives at our automakers are scheming with Pruitt to head back to the past, to get out of the promise that they made to build more innovative, fuel-efficient cars.

Investing in the technologies of the future will help ensure that the electric vehicle revolution, which is on our doorstep, doesn’t leave America behind, doesn’t leave American innovators behind, doesn’t leave American workers behind, and doesn’t leave American automakers behind. A midterm review of these CAFÉ standards found that the automakers already have the technology to meet the new standard and that the new standard will save money for their customers. It is to the benefit of their customers to keep going with the CAFÉ standards they agreed to. An independent analysis by the nonprofit organization CERES found that the CAFE standards provide automakers and their suppliers the certainty they need to increase investment in the cleaner technologies that are necessary for the long-term health of the industry, and with that certainty that leads to increased investment, the increased investment leads to jobs.

This ought to be a no-brainer. A policy that protects consumers and the environment while promoting innovation and making American companies more competitive for the global market should be something we can all agree on.

But there is also a simpler, more old-fashioned principle at stake here: Keep your word. Ford, GM, and the others told the American public that they would compete for car buyers’ business by delivering quality, energy-efficient vehicles. That is what they told the American public, and they said it voluntarily. This wasn’t forced down their throats through a regulatory proceeding; this was a voluntary agreement that they signed up for and were enthusiastic about at the time. They should keep their word. Why is that asking too much of American corporate leadership? Keep your word. How basic a principle is that? They should stop their trade association lobbying to water down the CAFE standards promises that they made. It is a recurring problem around here, as many of us have noticed, that the trade association is usually on the trailing edge of the industry; it is like the worst voice of the industry. That is surely the case here, where the trade association for our American automakers is trying to get them to set it up so they will break their word to the American people about a promise that they made—a very simple one, which the technology is already there to achieve.

Even if you don’t care one whit about climate change, even if you laugh that off, even if you go down the Trump road that it is a Chinese hoax, we still ought to be honoring those CAFÉ standards for American jobs, for American ingenuity, and for American innovation.

Thank you. I yield the floor.