The Leaflet: CAFE to SAFE: Fuel Economy Standards Get a Tune-Up
The Trump administration is looking to replace Obama-era fuel mileage requirements with less burdensome, more realistic fuel standards.
Fuel-economy standards are due for a federal makeover. On August 2, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) issued a joint notice of proposed rulemaking that would replace the Corporate Average Fuel Economy (CAFE) standard for light-duty vehicles with the Safer Affordable Fuel-Efficient (SAFE) Vehicles standard. If implemented, SAFE would set limits for fuel economy and tailpipe carbon dioxide emissions in all 50 states. Citing a need for a more realistic and balanced approach to reducing greenhouse gas emissions, the EPA and NHTSA seek to reset vehicle emissions limits at levels for 2021–26 model-year (MY) cars.
In 2012, the Obama administration set fuel-economy standards for MY 2021–26 passenger cars and light trucks at 46.7 miles per gallon (mpg). By comparison, the fleet-wide standard for 2016 MY vehicles was 32.7 mpg.
In April 2018, EPA determined Obama-era emissions standards were too harsh and recommended they be revised. Therefore, the Trump administration is seeking public comments about its proposal to scale the standard back to a reasonable industry average of 37 mpg beginning in 2021. The comment period ends September 30. A final rule is expected in the winter.
The SAFE rule threatens California’s unique ability to influence emissions standards for the rest of the nation. Under the Clean Air Act, the Golden State can set and enforce its own fuel-economy standards, and it has done so, making them stricter than the federal standards. Automakers must meet the CAFE standard in order to sell cars in California, the nation’s most populous state. Twelve other states—including Connecticut, Maine, Maryland, New Jersey, Oregon, and Vermont—have followed California’s lead. Together, they represent more than one-third of the country’s vehicle market.
Is the cost of CAFE worth the added expenses? According to an EPA report, if emissions standards remain unchanged, the overall average ownership costs for new vehicles will increase $2,340. EPA also cites evidence linking occupant fatalities on the road to lighter, smaller cars manufactured in response to ever-stringent CAFE standards. If CAFE is not replaced, more than 1,000 Americans are expected to die in crash fatalities each year in vehicles built through model year 2029. Furthermore, reducing emissions standards to modest levels would reduce societal costs over the next decade by $500 billion—all with minuscule impact on the global average temperature, atmospheric carbon dioxide concentrations, and air pollutant levels.
Although raising fuel-economy standards is often touted as a method to spur consumer savings on gasoline, most Americans prefer owning larger cars and are willing to sacrifice fuel-efficiency for comfort, space, and safety. For the fifth consecutive year, light trucks (sport utility vehicles, vans, and pickups) outsold small and mid-sized cars, increasing their market share to 64.5 percent.
The Heartland Institute welcomes the federal government’s decision to return to more prudent and efficient fuel-economy standards that consider the many facets of vehicle ownership, including safety features, sale and maintenance costs, gasoline prices, and style. We recommend states not increase mpg standards and onerous regulations on automobile emissions. Instead, legislators should allow consumer demand to dictate the types of automobiles manufacturers produce.
What We’re Working On
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Budget and Tax
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Energy & Environment
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From Our Free-Market Friends
Resolve State Pension Woes to Ease Maui Budget
Joe Kent, vice president of research for the Grassroot Institute of Hawaii, warns against the looming public pension debt crisis in the Aloha State. The unfunded liability of the state’s Employment Retirement System currently stands at $13 billion. With a funding ratio of only 54 percent, Hawaii’s beleaguered pension system is the 44th least-funded in the country. Kent advises state legislators reduce retirement benefits for new employees and replace the current defined-benefit structure with a defined-contribution plan for new enrollees, similar to the 401(k) plans offered throughout the private sector in the United States.
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