8/3/2019 Alan Lloyd, statement on U.S. CAFE/GHG standards, 24 January 2012

1/2

ICCTStatementattheJanuary24,2012Hearingon

EPA/NHTSANPRMon2017-25VehicleCAFE/GHGStandardsINTRODUCTION

MynameisAlanLloydandIamPresidentoftheInternationalCouncilonCleanTransportation(ICCT).Previously,IwasSecretaryoftheCaliforniaEnvironmentalProtectionAgencyandChairmanoftheCaliforniaAirResourcesBoard(CARB).IamhappytopresentcommentsontheproposedvehiclestandardsonbehalfoftheICCT,andthesewillcomplementthecommentspresentedlastweekbymycolleague,JohnGerman,SeniorFellowandProgramDirectorattheICCT.Asyouknow,theICCThasbroadexpertiseinallareasoftransportationandfuelsandourprimarymissionistoprovidetechnicalinformationtosupportregulatoryagenciesworldwideinimprovingairqualityandreducinggreenhousegasemissions.Mytestimonywillfocusontwoareas;Iwillalsocommentbrieflyontherecognitionforelectricdrivevehicles.Thefirstistoprovidemyperspectiveontheexcellentmannerinwhichyouhavemovedfromthe201216ruletothecurrentproposed201725rule.Secondly,Iwillprovidecommentsonthecost

estimatesthatareincludedintheproposedrule,sincecostsareoftenanissueraisedbytheregulatedcommunity.AsapreviousChairoftheCaliforniaAirResourcesBoard,IfeelIcanprovidesomehistoricalcontextaboutthislineofdebate.FROMA.B.1493TOTHEPROPOSEDRULE

MylastactasChairmanoftheCaliforniaAirResourcesBoardwastopresideoverthe2004boardmeetingtoadopttheregulationrequiredbyAB1493.Thishistoricregulationandlegislationwasmadepossiblebythevision,fortitude,andcommitmenttotheenvironmentbyStateSenatorFranPavley,togetherwiththesupportofGovernorDavisandGovernorSchwarzenegger.Atthenationallevel,you,workingtogetherwiththeCaliforniaAirResourcesBoardandtheautomobilemanufacturers,thenpassedtherulerequiringfleetwidereductionsingreenhousegasesforthe2012-16timeframe.ThiswasanexcellentexampleoftheprovisionsoftheCleanAirActinaction--the

regulationtocontrolgreenhousegasesfromvehicleswaspassedinCalifornia,adoptedbytheSection177statesandsubsequently,atthenationallevel.ThiscooperationshowstheCalifornia/EPArelationshipworkingexactlyasplannedintheCleanAirActandthisiscontinuingtodayintheproposedrulemakingtolimitgreenhousegasesinthe2017to2025timeframe.IwanttocongratulateyouandthestaffoftheEPA,aswellasoftheCaliforniaAirResourcesBoardandtheNationalHighwayTrafficSafetyAdministration,forbuildingontheearlierruleandaggressivelysettingthestagesothattheU.S.cannotonlycatchup,butsurpassothercountriesintheworldinthedesiretoimprovefueleconomy,reducegreenhousegases,andreducedependenceonfossilfuels.Ialsoapplaudfederalpolicyinidentifyingthepositiveroleofelectricvehiclesasacriticaltechnologytoaddressurbanandgreenhousegaspollution,fueleconomyandreduceddependenceonfossilfuels.Electricdrivetechnologiesareinherentlycleanwithzerotailpipeemissions,andcoupledwith

renewables,theyarecapableofzerowell-to-wheelsemissionsandwillbenecessarytoreach2050greenhousegasreductiontargetsofover80%.Asweoftenhearfromtheautomobilemanufacturersandwithmerit,theyneedconsistentlong-termsignalssothattheycanplanforinvestmentinongoingtechnologydevelopment.Withthisrule,youhaveprovidedexactlytheemissionreductiontrajectorythatthemanufacturerswillneedtofollow,allowingthemtoinvesttheirresourcesinthetechnologiesthatwillpermitthemtoreachthesetargets.

8/3/2019 Alan Lloyd, statement on U.S. CAFE/GHG standards, 24 January 2012

2/2

COSTSOFIMPLEMENTINGTHERULE

Lastweek,JohnGermanincludedsomecommentsaboutcostsinhistestimony.However,Iwanttoemphasizethatthecostestimatesintheproposedrulearesupportedbystrongtechnicalanalysis,andthe$2,000pricetagislikelytobeoverlyconservative.Iwillelaborateusingafewspecificpointsbelow.

TheICCTagreesthatthebestwaytoderivedirecttechnologycostestimatesistoconductrealworldteardownstudies.Notonlyisthislikelytobemoreaccuratethansupplierandmanufacturerestimates,buttheresultsarepublic,greatlyincreasingthetransparencyofthecostinformation.TheICCTalsoagreeswithEPAsassessmentofindirectcoststhatspecificallyaddressesthefactorsthatincreasetheretailpricecomparedtothedirectcosts,andthegeneralapproachofassigningtechnologiestoseveralcomplexityclassesfordeterminingtheindirectcostmultipliers(ICM).TheuseofagenericRetailPriceEquivalency(RPE)markuptocoverawiderangeoffactorsthatarenotconsistentoverdifferenttechnologiesoftenresultsinoverestimatingthecosts,andwewouldrecommendtheagenciestoscrapthesensitivityanalysesconductedusingtheRPEmarkups.Inourwork,aswellasworksupportedbytheEPAandCARB,theissueoflightweightingofvehicleshasproventobeoneofthemostexcitingandfertileareasforimprovingfueleconomywithout

incurringexorbitantcostsorjeopardizingsafety.AsstatedbyMr.German,previouslightweightmaterialcoststudiesdidnotassesspartinteractionsandsecondaryweightreductions.Whiletheymayhaveaccuratelyreflectedhistoricalcostsforlightweightmaterials,theyalloverstatethecostoffuturevehicleweightreduction.StudiesinprogressbyLotusandFEVareusinghighlysophisticatedsimulationmodelstooptimizepartmaterialsanddesign.Theresultsofthesestudieswillbefarmoreaccurateoffuturedesignsandmustbeusedtoassessweightreductioncostsforthefinalrule.Webelievethatthesestudies,whichwillbeavailableforinclusioninthefinalrule,arelikelytoshowcostsoflightweightingtobelowerthanenvisionedintheproposedNPRMaswellasthefinal2012-16rule.Anotherareawherecostsincludedinthedraftrulearetoohigh,arethosefortheparallelorP2hybrid.TheP2systemsevaluatedbyFEVforEPAassumednoreductioninICenginesize(theelectricmotorprovidedaperformanceincrease),noreductioninbatterysize,anddidnotaccountforthecost

savingsduetoremovingtheautomatictransmissiontorqueconverter.TheICCTispresentlyengagedinanexercisetoevaluatethecostsofP2systemswiththeseissuesinmind,andweexpectthattheupdatedP2costswillbelowerthantheagencyestimate.Theseupdatedcostsshouldbeincludedinthefinalrulemaking.Thesearebuttwoexampleswherewefeelthatthecostsintheproposedrulearelikelytobehighandwefeelfullyconfidentthatthetechnologybenefitsrepresentativeofanother13yearsofdevelopmentwouldresultincostsmuchlowerthanthe$2,000estimate.FrommyexperienceasChairmanoftheCaliforniaAirResourcesBoard,actualruleimplementationcostsseenbytheconsumeraremuchlessthanwerepredictedbytheregulatedcommunitywhenstandardswereadopted.ThistrendcontinuedwithtestimonyduringtheBoardhearingforAB1493adoption,duringwhichtheindustrypredicted$3,000increasepervehicle.Actualcosts,asyouhavefoundduringthe2012-16rulemaking,are

expectedtobelowerthan950dollars.INSUMMARY,IwanttoapplaudyouandthestaffinadditiontotheCaliforniaAirResourcesBoard,NationalHighwayTrafficSafetyAdministration,andtheautomobilemanufacturersforsettingthesenationalstandards,andlayingoutaclearpathforthefuture.Throughyoureffortsandthestrongadministrationsupport,youhavecreatedadynamicinwhichallpartiesareworkingtogether,andexcitementandjobsarebeingcreatedagain.FinalizationofthisproposedrulewouldcatapulttheU.S.toagloballeadershiproleinaddressingfueleconomy,climatechange,andreductioninfossilfuels.Weapplaudyourgreatefforts.Iknowpersonally-thisisextremelytaxingandstressfulwork.