Yesterday morning, E&E News reported that officials at the EPA and DOT argued back and forth about how losing fuel efficiency requirements for cars would affect fleet safety. While EPA officials argued that loosening the standards would actually increase roads deaths by 17 people per year, DOT won out in the end and justified loosening fuel restrictions with its estimate that doing so would prevent 1,000 deaths per year.
The main argument from DOT is that increasing fuel standards raises the cost of new cars and prevents consumers from buying newer and safer cars. According to the proposed rule (p. 23), “compared to the proposed standards today, the previously-issued standards would increase average vehicle prices by about $2,100.” The problem with this, we are told, is that:
As prices increase, the market-wide incentive to extract additional travel from used vehicles increases. The average age of the in-service fleet has been increasing, and when fleet turnover slows, not only does it take longer for fleet-wide fuel economy and CO2 emissions to improve, but also safety improvements, criteria pollutant emissions improvements, [and] many other vehicle attributes that also provide societal benefits take longer to be reflected in the overall U.S. fleet as well because of reduced turnover. (P. 23.)
It’s comforting to know that, while the administration is busy gutting every greenhouse gas and other pollution standard it can get its hands on, this time, at least, they’re doing it for our own good. (By the way, when you drill down into the rule, that $2,100 figure for increased average vehicle cost is true for only Model Years 2026 and 2027; according to the table on pages 598-99, over the 10-year period of Model Years 2021-2030, the average annual cost increase for the current standards over the newly-proposed standards is $1,900.)
Given the administration’s belief that reducing the cost of new vehicles is better for the environment, for vehicle safety, and for the unnamed “many other vehicle attributes that also provide societal benefits”, it is worth noting that the administration’s announced tariffs on imported vehicles, steel and aluminum will increase new car prices by considerably more than what would be allegedly saved by the proposed rule. According to a policy brief from the Peterson Institute for International Economics (as staid a bunch of number crunchers as you can find):
[A]nalysis using industry data, consumer information, and the record of previous tariff hikes indicates that the average price of an entry-level compact car will increase between $1,409 and $2,057. Similarly, the price of a new compact SUV/crossover, the most popular vehicle in America, will rise by $2,092 to $3,066. More upscale versions of the compact SUV/crossover will rise by significantly more, $4,708 to $6,971, because of higher imported foreign content, and hence higher taxes paid, for the typical luxury vehicle.
If we take $2,579 as the mid-range price increase of the most popular class of vehicles (compact SUV/crossover), then between the import tariffs on the one hand, and the vehicle rule on the other, the net result is that the administration is raising the cost of these vehicles by $679 ($2,579 – $1,900).
We’ve all become immune to any pro-environmental claims by this administration. But the obscene aspect of the administration’s justification results from their claim that by making vehicles cheaper, they are making them safer. Why should that hold when greenhouse gas rules are being rolled back and not when we are increasing prices with tariffs? Is the Administration prepared to argue that its trade wars are worth American lives? If not, what are the implications for its car rules?