An E.P.A. Plan to Kill a Major Climate Rule Is Worrying Business Leaders

The Environmental Protection Agency’s (E.P.A.) proposal to repeal a significant climate rule is causing concern among business leaders, particularly in the automotive and energy sectors. The plan, which aims to scrap a major Obama-era regulation aimed at curbing greenhouse gas emissions, has sparked worries about potential litigation and a patchwork of stricter state-level regulations.

The E.P.A.’s proposal, announced last year, seeks to roll back the Corporate Average Fuel Economy (CAFE) standards, which were implemented in 2012 to reduce carbon emissions from vehicles. The standards required automakers to increase the fuel efficiency of their fleets, with the goal of achieving an average of 54.5 miles per gallon by 2025.

Industry executives argue that repealing the rule would lead to costly and protracted litigation, potentially tying up the courts for years. This uncertainty would make it challenging for companies to plan and invest in their future, particularly in an industry where product development cycles are long and capital-intensive.

Moreover, business leaders are concerned that individual states might respond to the E.P.A.’s plan by implementing their own, stricter regulations. California, for example, has already signaled that it will maintain the stricter standards, which could create a de facto two-tiered regulatory system across the country. This patchwork of state-level regulations could lead to confusion, increased compliance costs, and complexity for companies operating across state lines.

Some carmakers, who had initially expressed support for relaxing the CAFE standards, are now rethinking their stance. They realize that a patchwork of state regulations could be more challenging to navigate than a single, federal standard. “We understand the need for a comprehensive and coordinated regulatory framework that promotes innovation and provides certainty for the market,” said a spokesperson for a major automaker.

The E.P.A.’s plan has also drawn criticism from some business groups, which argue that repealing the climate rule would undermine investor confidence and create regulatory uncertainty. “A stable and predictable regulatory environment is essential for businesses to make informed investment decisions,” said a representative from the U.S. Chamber of Commerce.

As the E.P.A. moves forward with its plan, business leaders are urging the agency to consider the potential consequences of its actions. They are advocating for a more comprehensive and coordinated approach to regulating greenhouse gas emissions, one that provides clarity and certainty for the market.