However, from fiscal years 1996 through 2001, NHTSA was barred  from using appropriated funds made available in DOT’s appropriation to  raise CAFE standards. Although NHTSA and EPA Worked to Propose CAFE and GHG Emissions Standards That Are Aligned, the Programs Have Several Key Differences

		Although the Proposed Standards Based on Vehicle Footprint Should Result in Benefits, Actual Vehicle Sales May Affect the Level of Benefits Realized

Although the proposed CAFE and GHG emissions standards are distinct  and automobile manufacturers will be subject to both sets, EPA and  NHTSA have worked to develop standards that are aligned (what the  agencies refer to as “harmonized”) with the intention that manufacturers  can build one fleet of vehicles to comply with both sets of standards. 3). Under a  single standard, manufacturers could reduce vehicle size as one approach  for CAFE compliance. While NHTSA and EPA expect benefits from adopting a standard based on  vehicle footprint and predict that the administration’s goal of a fleetwide  average 34.1 mpg and 250 grams per mile carbon dioxide in 2016 will be  met, there is no guarantee that a specific national target will be achieved. 4). Similar scenarios could occur  with respect to EPA’s GHG standards. For example, EPA’s proposed  GHG standards offer a “temporary lead time” mechanism for  manufacturers that sell a limited number of vehicles in the U.S. NHTSA officials said that this work helped improve its analysis. NHTSA  also contributed safety research. By  comparison, EPA has been able to develop and maintain automotive  engineering expertise. However, the two agencies have not documented the processes for use  during future rulemakings, and officials at both agencies report they  currently have no plans to do so. NHTSA Improved the Analysis It Uses to Help Set CAFE Standards, and although Experts Still Expressed Some Concerns, They Lacked Consensus on Additional Improvements

		NHTSA Evaluates Potential CAFE Standards Using the Volpe Model, Which Attempts to Simulate How Manufacturers Will Meet the Standards and Then Measures the Effects of the Standards

In part because NHTSA has previous experience in setting CAFE  standards, we were asked to review any improvements NHTSA made to its  process for setting CAFE standards. NHTSA Made Several Improvements to Its Analysis That Could Help NHTSA Better Estimate the Costs and Benefits of Increasing CAFE Standards

			Transparency

To increase the transparency of inputs to the Volpe model for the 2012  through 2016 rulemaking, NHTSA used publicly available data to develop  the model’s baseline vehicle fleet. Largely Due to Resource Constraints, NHTSA Has Limited Plans to Assess the Model Year 2008 through 2011 Light Truck CAFE Standards or Key Data Used to Develop the Standards

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. An analysis of the accuracy of key data inputs, including the baseline fleet  and technology cost estimates. Although NHTSA officials we spoke with recognize the value of these  analyses and hope to conduct them, they report that resource limitations  have prevented them from doing so in the past and will prevent them from  doing so in the near future. If  NHTSA and EPA do not collaborate closely on future standards, there is a  risk that the standards may not be harmonized, which would lead to  increased compliance costs for manufacturers; the standards may not  reflect the expertise of both agencies, such as the vehicle power train  technology and environmental expertise of EPA and vehicle safety  expertise of NHTSA; and the goals that the standards are attempting to  accomplish may not be met. However, we were not able to confirm the extent to which NHTSA  leveraged DOT’s expertise because NHTSA did not provide this  information. We  analyzed these documents to summarize the structure of each set of  standards, describing how the National Highway Traffic Safety  Administration (NHTSA) and the Environmental Protection Agency (EPA)  harmonized the standards and areas in which there are differences  between the standards, such as certain types of flexibilities like temporary  lead-time mechanisms. We conducted internet searches to identify experts publishing recent  research on fuel economy, GHG emissions, economic modeling, and other  issues. To determine the steps NHTSA has taken to analyze the effects of the  model year 2008 through 2011 light truck standards, we reviewed and  analyzed the Energy Independence and Security Act, NHTSA’s final  rulemaking on the model year 2008 through 2011 CAFE standards for light  trucks, and the data used to set these standards.
Why GAO Did This Study

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.

What GAO Found

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.