Wednesday, August 21, 2019

More Automakers Disregard Trump's Attempt to Rollback Mile Per Gallon Rule as Corporate Leaders Affirm Commitment to Sustainability

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Last month, I wrote about the fact that many car manufacturers are ignoring Trump's efforts to roll back Obama era rules on miles per gallon requirements for cars. As many of my readers know, California is granted special rights in the Clean Air Act to set miles per gallon standards for cars sold in their borders due to the special air pollution conditions in the state. As a result, California rule making tends to set the national standards on mph requirements for car manufactures.

While the current administration changed Obama's rules for miles per gallon of cars, automakers are not particularly interested in changing their plans. California has set particular standards that they are going to meet (since California is one of the largest car buying states) and they don't want to have different types of manufacturing going for regional differences in the US. As a result, Trump wants to block California's special right to set standards, which would require a major change in the Clean Air Act. This success of this initiative is doubtful. Plus, with the likelihood that the administration is going to change in the next election, automakers are playing a long game. According to an article in today's New York Times, more automakers are planning to avoid the administration's initiative which is run by an inexperienced staffer in the White House (my sources in Washington tell me that qualified folks in a variety of fields won't get near this administration).

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It is worth noting that The Business Roundtable, a group consisting of the major CEO's of big US Companies, came out with a new statement on August 19th noting that corporate leaders are changing their focus from being just responsible to their shareholders. They seek to be responsible to all of their stakeholders (the statement is worth a read on the above link). They group defines stakeholders broadly to include customers, workers, suppliers, and communities impacted by their organization (such as overseas communities which supply products). 

One of the ideas that the leaders, including the leaders of major car companies, committed to is, "We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses." This blog often focuses on some of the problematic environmental and sustainability issues caused by major companies. This time, the leaders of the companies deserve credit for signing such a far reaching agreement--and the car companies deserve credit for holding their ground on trying to reduce greenhouse gases emitted by their products.

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