Vehicle Fuel Economy:

NHTSA and EPA's Partnership for Setting Fuel Economy and Greenhouse Gas Emissions Standards Improved Analysis and Should Be Maintained

GAO-10-336: Published: Feb 25, 2010. Publicly Released: Apr 1, 2010.

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In May 2009, the U.S. administration announced plans to increase the Department of Transportation's (DOT) National Highway Traffic Safety Administration's (NHTSA) corporate average fuel economy (CAFE) standards and establish the Environmental Protection Agency's (EPA) greenhouse gas (GHG) emissions standards for vehicles. NHTSA redesigned CAFE standards for light trucks for model years 2008 through 2011, and some experts raised questions about the rigor of the computer modeling NHTSA used to develop these standards. GAO was asked to review (1) the design of NHTSA and EPA's proposed standards; (2) how they are collaborating to set these standards; (3) improvements compared to a previous rulemaking, if any, NHTSA made to the modeling; and (4) the extent to which NHTSA analyzed the effects of past light truck standards and the accuracy of data used to set them. GAO reviewed relevant rulemaking and modeling documents, and interviewed agency officials and other experts.

NHTSA and EPA have worked to propose CAFE and GHG standards that are generally aligned so manufacturers can build a single fleet of vehicles to comply with both. The standards are based on vehicle size and will cover model years 2012 to 2016. However, differences between the standards still exist because of variation in the legal authorities of each agency. For example, certain flexibility mechanisms designed to reduce compliance costs for manufacturers apply only to GHG standards, which could make aligning them with CAFE standards more difficult. However, potentially stricter penalties for GHG standard noncompliance could improve compliance with CAFE standards. Also, while NHTSA and EPA expect benefits from adopting a standard based on vehicle size, neither standard has a mechanism to ensure that a specific national target will be met. NHTSA and EPA are collaborating by sharing resources and expertise to jointly set CAFE and GHG standards. From fiscal years 1996 through 2001, NHTSA was barred from using appropriated funds to raise CAFE standards. In contrast, EPA has continually expanded its automotive engineering expertise, including at its vehicle testing lab. As a result, EPA was able to contribute several original research studies to the proposed joint standards. Because this collaboration is not formally required and the agencies are not documenting the processes used--a recognized best practice--they may not be able to replicate them in the future. To set the proposed standards, NHTSA improved upon the computer model compared to the version used that had been used to set the CAFE standards for 2008 through 2011 light trucks. One improvement was that NHTSA increased the model's transparency by using publicly available, rather than confidential, data to develop a baseline fleet of vehicles. With EPA's input, NHTSA updated several data inputs such as technology costs and the cost of emissions. While experts GAO interviewed had varying critiques of NHTSA's model, there was no consensus on how NHTSA could further improve it. In particular, experts' opinions differed sharply on two studies, which reported opposing findings concerning the relationship between vehicle weight (a key factor in determining fuel consumption) and safety--suggesting that additional research may be warranted. In part due to resource and data constraints, NHTSA has not yet evaluated its 2008 through 2011 light truck CAFE standards, which have a similar design to the new standards. Retrospective analyses of efforts and data inputs could inform NHTSA on the extent to which the standards met goals and provide means to improve the process of setting standards. Lacking such analysis, NHTSA does not know whether goals of the standards have been met or if changes are needed to the program. NHTSA officials said that while they would like to conduct such analyses, limited resources and time have prevented them from doing so, and they have no definitive plans to conduct them in the future.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In 2010 we reported that the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) successfully collaborated on a joint rulemaking on vehicle fuel economy and greenhouse gas emissions standards for vehicle model years 2012 to 2016. However, we noted that the agencies did not document the process used for the rulemaking and that if the agencies collaborated together on future joint rulemakings the lack of a documented process could create inefficiencies in additional time spent recreating processes and reduced sharing of expertise and resources, thus resulting in less rigorous analyses supporting the rulemaking. We recommended that EPA and NHTSA, in order to better ensure effective collaboration on future joint rulemakings, establish a roadmap for future collaborations by documenting and publishing a description of collaborative process used in the 2012 to 2016 joint rulemaking. In 2011 EPA and NHTSA published a rule for vehicle fuel economy and greenhouse gas emissions for vehicle model years 2017 to 2025. This rule provided a roadmap through its detailed description of the joint process used by EPA and NHTSA, including relevant rules and responsibilities. As a result, EPA and NHTSA can continue to follow the documented process, as opposed to recreating a collaborative process, in the future to better ensure effective collaboration on joint rulemakings.

    Recommendation: NHTSA and EPA should document the process used in this joint rulemaking to establish a roadmap for any future rulemaking efforts and facilitate future collaboration. In addition, NHTSA and EPA should publish this documentation in order to increase transparency.

    Agency Affected: Environmental Protection Agency

  2. Status: Closed - Implemented

    Comments: In 2010 we reported that the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) successfully collaborated on a joint rulemaking on vehicle fuel economy and greenhouse gas emissions standards for vehicle model years 2012 to 2016. However, we noted that the agencies did not document the process used for the rulemaking and that if the agencies collaborated together on future joint rulemakings the lack of a documented process could create inefficiencies in additional time spent recreating processes and reduced sharing of expertise and resources, thus resulting in less rigorous analyses supporting the rulemaking. We recommended that EPA and NHTSA, in order to better ensure effective collaboration on future joint rulemakings, establish a roadmap for future collaborations by documenting and publishing a description of collaborative process used in the 2012 to 2016 joint rulemaking. In 2011 EPA and NHTSA published a rule for vehicle fuel economy and greenhouse gas emissions for vehicle model years 2017 to 2025. This rule provided a roadmap through its detailed description of the joint process used by EPA and NHTSA, including relevant rules and responsibilities. As a result, EPA and NHTSA can continue to follow the documented process, as opposed to recreating a collaborative process, in the future to better ensure effective collaboration on joint rulemakings.

    Recommendation: NHTSA and EPA should document the process used in this joint rulemaking to establish a roadmap for any future rulemaking efforts and facilitate future collaboration. In addition, NHTSA and EPA should publish this documentation in order to increase transparency.

    Agency Affected: Department of Transportation: National Highway Traffic Safety Administration

  3. Status: Closed - Implemented

    Comments: In 2010, GAO reported that the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) had collaborated to issue a joint rulemaking for corporate average fuel economy (CAFE) and greenhouse gas (GHG) emissions standards for model years 2012 to 2016 vehicles. In conducting the joint rulemaking, the agencies collaborated on major tasks. For example, the two agencies coordinated time frames so that key milestones of each rulemaking, such as issuance of the Proposed Rulemaking and time frames for public comment, happened at the same time. This enabled manufacturers to learn about both standards at the same time and plan appropriately. In addition, the two agencies shared data and met frequently. As a result of these efforts, each agency had significant input into the development of both sets of standards. However, GAO noted that because the collaboration was not formally required and the agencies were not documenting the processes used--a recognized best practice--they might not be able to replicate those processes in the future. As a result, in order to ensure continued collaboration, GAO recommended that NHTSA and EPA enter in a Memorandum of Understanding with one another in which the agencies agree to continue their enhanced partnership in any future CAFE and GHG rulemakings. NHTSA and EPA have continued to collaborate on CAFE and GHG rulemakings, including standards for model year 2017 to 2025 vehicles. In September 2014, EPA confirmed that the agencies documented their intent to collaborate in a joint Notice of Intent, as well as the processes used for collaboration, and subsequently issued a joint rulemaking. As a result, the agencies have continued to coordinate timeframes, share resources, and have a documented process of collaboration that they can continue to use in future rulemakings.

    Recommendation: To ensure continued collaboration and an enhanced relationship in any future CAFE and GHG emissions rulemakings, NHTSA and EPA should enter into a Memorandum of Understanding with one another in which the agencies agree to continue their enhanced partnership in any future CAFE and GHG rulemakings.

    Agency Affected: Environmental Protection Agency

  4. Status: Closed - Implemented

    Comments: In 2010, GAO reported that the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) had collaborated to issue a joint rulemaking for corporate average fuel economy (CAFE) and greenhouse gas (GHG) emissions standards for model years 2012 to 2016 vehicles. In conducting the joint rulemaking, the agencies collaborated on major tasks. For example, the two agencies coordinated time frames so that key milestones of each rulemaking, such as issuance of the Proposed Rulemaking and time frames for public comment, happened at the same time. This enabled manufacturers to learn about both standards at the same time and plan appropriately. In addition, the two agencies shared data and met frequently. As a result of these efforts, each agency had significant input into the development of both sets of standards. However, we noted that because the collaboration was not formally required and the agencies were not documenting the processes used--a recognized best practice--they might not be able to replicate those processes in the future. As a result, in order to ensure continued collaboration, we recommended that NHTSA and EPA enter in a Memorandum of Understanding with one another in which the agencies agree to continue their enhanced partnership in any future CAFE and GHG rulemakings. NHTSA and EPA have continued to collaborate on CAFE and GHG rulemakings, including standards for model year 2017 to 2025 vehicles. In December 2013, NHTSA confirmed that the agencies documented their intent to collaborate in a joint Notice of Intent, as well as the processes used for collaboration, and subsequently issued a joint rulemaking. As a result, the agencies have continued to coordinate timeframes, share resources, and have a documented process of collaboration that they can continue to use in future rulemakings.

    Recommendation: To ensure continued collaboration and an enhanced relationship in any future CAFE and GHG emissions rulemakings, NHTSA and EPA should enter into a Memorandum of Understanding with one another in which the agencies agree to continue their enhanced partnership in any future CAFE and GHG rulemakings.

    Agency Affected: Department of Transportation: National Highway Traffic Safety Administration

  5. Status: Closed - Implemented

    Comments: In 2009, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) proposed, through a joint rulemaking, corporate average fuel economy and greenhouse gas emissions standards for passenger vehicles model years 2012 to 2016. In 2010, we reported that while vehicle weight is a key factor in determining vehicle fuel economy and greenhouse gas emissions standards, there was a lack of consensus among experts and stakeholders regarding the relationship between vehicle weight, and safety. As a result, we recommended that the EPA and the National NHTSA should, given the potential effects of fuel economy standards on vehicle size and weight and safety, conduct or sponsor new research on the relationship between vehicle size and weight and vehicle safety. In December 2011 EPA and NHTSA issued a joint rulemaking for corporate average fuel economy and greenhouse gas emissions standards for passenger vehicle model years 2017 to 2025. This joint rulemaking describes the research on vehicle weight and safety that has been sponsored by EPA and NHTSA and led by a variety of organizations including NHTSA, the Department of Energy, private contractors, universities, and the California Air Resources Board. As a result of this research, EPA and NHTSA will better understand how, for example, vehicle weight and size can be reduced in order to improve fuel economy without compromising vehicle safety and, as a result, how vehicle fuel economy and greenhouse gas emission standards affect vehicle safety.

    Recommendation: NHTSA and EPA, with input from key stakeholders, should conduct or sponsor new research on safety and its relationship to vehicle size and weight, given the controversy and lack of consensus regarding the relationship between vehicle size, weight, and safety and the emergence of new strong-but-lightweight materials among experts and stakeholders.

    Agency Affected: Environmental Protection Agency

  6. Status: Closed - Implemented

    Comments: In 2009, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) proposed, through a joint rulemaking, corporate average fuel economy and greenhouse gas emissions standards for passenger vehicles model years 2012 to 2016. In 2010, we reported that while vehicle weight is a key factor in determining vehicle fuel economy and greenhouse gas emissions standards, there was a lack of consensus among experts and stakeholders regarding the relationship between vehicle weight, and safety. As a result, we recommended that the EPA and the National NHTSA should, given the potential effects of fuel economy standards on vehicle size and weight and safety, conduct or sponsor new research on the relationship between vehicle size and weight and vehicle safety. In December 2011 EPA and NHTSA issued a joint rulemaking for corporate average fuel economy and greenhouse gas emissions standards for passenger vehicle model years 2017 to 2025. This joint rulemaking describes the research on vehicle weight and safety that has been sponsored by EPA and NHTSA and led by a variety of organizations including NHTSA, the Department of Energy, private contractors, universities, and the California Air Resources Board. As a result of this research, EPA and NHTSA will better understand how, for example, vehicle weight and size can be reduced in order to improve fuel economy without compromising vehicle safety and, as a result, how vehicle fuel economy and greenhouse gas emission standards affect vehicle safety.

    Recommendation: NHTSA and EPA, with input from key stakeholders, should conduct or sponsor new research on safety and its relationship to vehicle size and weight, given the controversy and lack of consensus regarding the relationship between vehicle size, weight, and safety and the emergence of new strong-but-lightweight materials among experts and stakeholders.

    Agency Affected: Department of Transportation: National Highway Traffic Safety Administration

  7. Status: Closed - Implemented

    Comments: In 2010, GAO reported that federal agencies can use retrospective analyses of rulemakings to help determine the extent to which the expected costs, benefits, and goals of a regulation are being realized. The National Highway Traffic Safety Administration (NHTSA) had not conducted retrospective analyses of its model year 2008 through 2011 light truck fuel economy standards, which had a similar design to those standards NHTSA was proposing for model year 2012 through 2016 vehicles. Lacking such analysis, NHTSA did not know whether goals of the standards have been met or if changes were needed to the program. As a result, we recommended that NHTSA conduct and document a retrospective analysis of its model year 2008 through 2011 light truck fuel economy standards and identify opportunities to evaluate the accuracy of key estimates, such as technology costs, used to determine those standards. In 2013, NHTSA began work on a retrospective analysis, which it expects to finalize in 2015. This analysis is reviewing inputs and outputs from the analyses used in the model year 2008 through 2011 fuel economy standards and compare assumptions, such as those on fuel prices, to more recent estimates. The analysis will also look at the extent to which the actions taken by automobile manufacturers in response to fuel economy standards compare to assumptions made by NHTSA in past rulemakings. NHTSA and Congress will be able to determine the extent to which goals of the standards?such as improvements in fuel economy?are being met and provide insight into ways to improve the standards.

    Recommendation: NHTSA should conduct and document a retrospective analysis of the model year 2008 through 2011 light truck standards, given the potential impact of CAFE standards on the automobile industry and consumers. In addition, NHTSA should identify opportunities to evaluate the accuracy of key estimates, such as technology costs, used to determine the model year 2008 through 2011 light truck standards. As EPA has experience conducting retrospective analyses of regulatory programs, NHTSA should consider involving EPA in this process.

    Agency Affected: Department of Transportation: National Highway Traffic Safety Administration

  8. Status: Closed - Implemented

    Comments: In 2010, we reported that the National Highway Traffic Safety Administration(NHTSA) contracted with the National Academies of Sciences (NAS) to provide a report on the costs of fuel-saving technologies to inform NHTSA's work on corporate average fuel economy (CAFE) standards. However, the NAS studies were not completed in a timely manner to support NHTSA's analysis for its 2009 Notice of Proposed Rulemaking for CAFE standards for vehicle model years 2012 to 2016. We noted in previous work that it would be ideal for such studies to be completed and updated before NHTSA issues new car or light truck fuel-economy standards. As a result, we recommended that NHTSA should set delivery time frames for future NAS studies to ensure the availability of these studies in a time frame useful for incorporation in NHTSA's regulatory analyses. As of December, 2013 NHTSA had initiated two new contracts with NAS regarding studies on vehicle technologies and fuel economy. NHTSA established timeframes for delivery for these studies so that they would be delivered in a timely fashion in order to support NHTSA's CAFE rulemakings. In addition, NHTSA monitors the status of these studies to ensure that they will be completed on time. As a result, NHTSA can be better assured that the analyses used to support CAFE rulemakings are based on the latest information available.

    Recommendation: NHTSA should set delivery time frames for future National Academy of Sciences (NAS) studies to ensure the availability of these studies in a time frame useful for incorporation in NHTSA's regulatory analyses.

    Agency Affected: Department of Transportation: National Highway Traffic Safety Administration

 

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