Codifying the Canada-California connection

Yesterday, the governments of Canada and California announced a formal agreement to work together to advance clean transportation. This Memorandum of Understanding is music to our ears, as it outlines several areas where the two jurisdictions will collaborate to decarbonize vehicles, engines, and fuels. The MOU outlines their intention to “collaborate on the development of our respective greenhouse gas regulations for light-duty vehicles…share information and best practices to accelerate deployment of zero-emission vehicles…and low-carbon clean fuel standards.” In addition, the MOU details concrete actions that Environment and Climate Change Canada (ECCC) and the California Air Resources Board (CARB) will take to strengthen their partnership, including capacity building, joint research projects, and the creation of an annual working group that discusses opportunities to partner on the development and implementation of policies and programs.

Why is this a big deal? Vehicle efficiency is one area in particular where the Trump administration has been looking to reverse the course set under the Obama administration and cripple existing efforts to make progress on climate change mitigation. Last August, the U.S. Environmental Protection Agency (EPA) and National Highway Traffic and Safety Administration (NHTSA) released a proposed regulation that would potentially drop the average fuel economy requirements for new vehicles in 2025 from 51 miles per gallon (mpg) to 37 mpg (4.6 liters per kilometer to 6.4 l/100 km), effectively eliminating any required efficiency improvements after model year 2020. The way Canada’s vehicle regulations are written at present, if ECCC doesn’t act Canada’s 2025 standards will automatically adjust to maintain alignment with the U.S. final rule, which is expected sometime later this year.

With today’s announcement, Canada is signaling that it may not follow the United States down the road of rolling back vehicle standards. Canada’s current cost-effective vehicle efficiency standards provide significant benefits to consumers, so it’s great to see Canada affirm its intention to work with California to uphold the existing regulation. And, earlier this year Canada rolled out a comprehensive incentive funding program for consumers and businesses to purchase zero-emission vehicles (ZEVs) and set a national goal of reaching 100% ZEV sales by 2040.

At today’s press conference Catherine McKenna, Canada’s Minister of Environment and Climate Change, said that regulatory alignment between Canada and California “means a bigger market for clean cars in North America.” Indeed, as we highlighted in a previous study, the combined vehicle sales in Canada, California, and the 13 states that follow California’s vehicle regulations in lieu of those at the level federal is over 40% of the total U.S.-Canada new car market, rising to half the market with the expected addition of Colorado.  In the wake of the U.S. proposed standards rollback, Canada’s leadership on climate policy is badly needed. We commend Canada for answering the call, and we are excited at what the Canada-California Connection means for the accelerated decarbonization of vehicles and fuels in North America.