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September 25, 2013

Gas-Guzzling Trade Deals?


This summer the United States and the European Union launched talks to establish a massive new free trade agreement. The second round of talks will take place in early October in Brussels, Belgium.  Negotiators will cover many sensitive topics, from whether the European Union should start to import genetically modified crops to whether corporations will have the right to sue governments over regulations that corporations allege reduce their bottom line.  Another important topic, often overlooked, is the pact’s effect on the efficiency of new passenger cars and trucks.

Less than a year removed from adoption of U.S. vehicle standards of 54.5 miles per gallon by 2025, which will reduce U.S. greenhouse gas emissions by 10 percent, it is critical that any U.S.-EU trade deal not open automaker loopholes that could slow down progress in reducing greenhouse gas emissions.

When it comes to climate disruption, passenger cars and trucks (also known as light-duty vehicles) are a big deal. In the United States, light-duty vehicles emit roughly 20 percent of the nation’s climate-disrupting carbon pollution. Similarly, in the European Union, passenger cars and trucks account for roughly 12 percent of greenhouse gas emissions.

The auto industry is also big business, and North America and Europe are two of the biggest auto markets in the world. Nearly 82 million vehicles were sold worldwide in 2012, with 14.5 million vehicles sold in the United States and 12.5 million vehicles sold in Europe.

U.S.-EU trade negotiations may disrupt the path to a clean-car future.  In a leaked draft negotiating text, European Union negotiators expressed a desire to “promote regulatory compatibility” of vehicle standards, including those laws designed to reduce emissions from cars and trucks, in order to increase vehicle trade. This could either be accomplished through “mutual recognition,” in which the U.S. would recognize vehicles certified by EU standards as equal to U.S. standards and vice-versa, or through “harmonization,” in which the U.S. and EU each change its regulations to be more similar. While harmonizing standards and promoting compatibility may sound like a generally good idea, the devil is in the details.


Both the United States and the European Union have standards in place that will reduce greenhouse gas pollution from vehicles over time. Last year, the Obama administration finalized historic standards that will reduce emissions from the average passenger vehicle to 163 grams of carbon dioxide per mile by 2025, equivalent to 109 grams of carbon dioxide per kilometer. The European Union has more stringent standards that will lower emissions from the average vehicle to 130 grams of carbon dioxide per kilometer by 2015, with a proposal to lower them to 95 grams of carbon dioxide per kilometer by 2020.

Although both sides have increasingly stringent vehicle standards, for the purposes of complying with these laws, both the U.S. and the EU have terribly outdated vehicle-testing procedures. As I detailed in Sierra Club’s “The Truth Behind the Testing” report, the U.S. procedures used to test whether vehicles are meeting the fuel efficiency standard were set by a 1975 law and make arcane assumptions that, for example, the driver will average 48 miles per hour on the highway and never drive with the air conditioning on. As a result, fuel efficiency values used for complying with the law are about 25 percent greater than what vehicles actually achieve on the road. In emissions terms, an automaker gets credit for emitting roughly 20 percent less greenhouse gas than the car actually will on the road. On the bright side, the U.S. Environmental Protection Agency has the authority to check automaker’s test results and make sure they are being conducted appropriately.

In an even more lax system, EU test procedures were also constructed some 30 years ago. A great report from our European colleagues Transport & Environment, Mind the Gap, details how automakers can rig their cars to perform perfectly for the test, even going so far as to disconnect the alternator,

tape over cracks between doors, and effectively disable the brakes. Further, automakers are somehow allowed to report emissions that are up to 4 percent less than what they measured in the laboratory. Independent tests have found that emissions from normal vehicles are roughly 23% greater than the emissions reported by automakers, with some individual models showing real-world emissions of 50% greater than what automakers report. Thankfully, the European Union may adopt more realistic test procedures that can’t be as easily manipulated by automakers, possibly as early as 2015.   

So what does this mean for U.S.-EU trade negotiations? As negotiators look to make vehicle regulations as similar as possible between the two sides, it is possible that “mutual recognition” or “harmonization” could lead to more pollution and oil consumption. For example, under a “mutual recognition” scenario, one could easily imagine American auto companies being allowed to export cars to Europe that don’t meet European emissions standards. Under a “harmonization” scenario where the U.S. and EU would each change its regulations to become more alike, one could imagine some pushing to pair Europe’s more lax testing procedures with the United States’ less stringent emissions standards. 

The bottom line: the United States and Europe have made historic strides in reducing emissions from passenger vehicles. It is critical that a potential free trade pact between the U.S. and European Union doesn’t take us backward, where it would allow cars to spew more pollution and guzzle more gas. So as U.S.-EU trade talks progress, keep an eye out for the effects on cars.  We cannot let landmark vehicle standards be weakened by a trade pact.

--Jesse Prentice-Dunn, Sierra Club's Beyond Oil Campaign


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