Rules to boost fuel economy for vehicles will do more good than harm, new study shows

From Eurekalert


Public Release: 6-Dec-2018

Findings by USC and other universities contradict claims by the Trump administration, which aims to roll back fuel economy standards

University of Southern California

Scholars from USC and other leading universities conclude that rules on the books to increase fuel economy for passenger vehicles will do more good than harm, contradicting claims by the Trump administration as it seeks to roll back fuel economy standards.

In a research paper that scrutinizes the cost-benefit methods used by federal officials to justify rolling back the regulations, the researchers conclude the government analysis is flawed and that it departs from accepted protocols. They found the analysis overlooked 6 million used cars, wiping out benefits estimated at least $112 billion.

The research findings, which are reported in Science today and will be presented to automakers and policymakers at the Organization for Economic Cooperation and Development (OECD) in Paris this week, are significant because they reflect best practices identified by leading, independent economists and engineers. The findings are also consistent with previous assessments showing that benefits for fuel-efficient vehicles outweigh costs. And the benefits accrue as blue skies, better health and fewer greenhouse gases (GHGs) contributing to global warming.

Antonio Bento, a professor of public policy and economics at the USC Price School of Public Policy and director of the nascent USC Center for Sustainability Solutions, said the study represents a “rapid assessment policy response” to the controversial regulatory proposal, which is undergoing federal rulemaking.

“It appears federal officials cherry-picked data to support a predetermined conclusion that the clean-car standards will lead to too many highway deaths,” said Bento, the study’s lead author. “We do not support that conclusion and the data does not support that conclusion.”

The Trump administration’s attempt to freeze fuel-economy standards for cars and light-duty trucks has sparked conflict with California and other states. Critics say the regulatory freeze is difficult to justify on economic, legal or environmental grounds.

But the new study goes a step further, suggesting the shortcomings in the government’s economic analysis are so egregious they seem like a deliberate attempt to manipulate statistics and mislead people.

Ironically, Bento occupies a special position in the controversy: He is the economist most often cited in the documents the EPA used to make its case for the regulatory relaxation. He is among a group of interdisciplinary scholars from leading universities who participated in the study, including experts from USC, Carnegie Mellon, Yale, the University of California and Massachusetts Institute of Technology, among others.

In 2007, Congress adopted laws to require corporate average fuel economy (CAFE) to increase to 35 mpg by 2020. The CAFE standards govern fuel economy across the U.S. fleet of passenger cars and light trucks. The U.S. EPA and the National Highway Traffic Safety Administration (NHTSA) set fuel economy gains between 27 mpg and 55 mpg between 2012 and 2025. A midterm review conducted in 2016 affirmed the benefits exceeded the costs and the measures would be technologically feasible.

But this year under the Trump administration, the federal agencies reversed course, proposing rules to freeze CAFE standards at 2021 levels through 2025. Federal officials argue that forcing automakers to achieve an average of 54 mpg in seven years would lead to cars that are too expensive, thus forcing people to keep too many old vehicles that are less safe.

The federal government also seeks to revoke California’s long-standing authority to set its own, more stringent tailpipe standards and limit other states from following suit. Gov. Jerry Brown has vowed to fight the proposed rollback.

But the researchers were puzzled by the policy reversal, prompting them to conduct an independent assessment of the government’s economic analysis used to justify the change. The authors are among the world’s top experts in environmental economics and climate change, including the study of fuel economy standards.

Their study describes a pattern of selective fact-picking and distortion throughout the government’s analysis. It finds that the 2018 analysis contains adjustments to a prior review of 2016, but nonetheless it is “our conclusion that the 2018 [federal] analysis has fundamental flaws and inconsistencies and is at odds with basic economic theory and empirical studies … our summary judgment is that the changes in the 2018 NPRM [notice of proposed rulemaking] are on balance misleading.”

Specifically, the study cited two key changes in the 2018 document that deviate from standard cost-benefit protocols.

First, the scientists say the economic analysis mistakenly concludes that relaxation of the rule will shrink the vehicle fleet by 6 million cars by 2029, which greatly skews the bottom line. It also flies in the face of economic principles because, the economists argue, only more stringent standards — not fewer — would increase costs for cleaner, new vehicles, and as prices for new and used vehicles increase, fleet size would diminish — not the other way around. The revision “is simply inconsistent with basic economic theory,” the study finds.

By miscalculating the size of the auto fleet, the researchers say the report underestimates vehicle miles traveled, gasoline consumption, GHG emissions and traffic fatalities. A correct estimate of fatalities alone represents a $90.7 billion savings, which the federal proposal omits.

Second, the researchers applied the generally accepted global — rather than domestic — social cost of carbon as a criterion to value GHG emissions reductions. That change, plus the revision for the number of vehicles, closes 63 percent of the difference between negative costs and the break-even point for the CAFE standards — a positive net gain of at least $112 billion dollars, the study shows. Costs can also be reduced by technology innovation, including improvements to internal combustion engines, automotive materials and design and wider use of zero-emissions vehicles, the study finds.

Finally, the researchers describe how the government deviated from “preferred protocol” developed in another study that Bento published in the American Economic Review in 2009, and commonly used in cost-benefit analyses, including externalities such as energy security, air pollution, gasoline prices, GHG emissions and traffic congestion. Failing to account for those variables overestimates the cost of the regulation while underestimating benefits, the researchers found.

“It’s doubtful these miscalculations were inadvertent,” Bento said. “These are not mistakes, rather these are deliberate downsizing of benefits and inflating costs.”

The study represents an important precedent for the emerging USC Center for Sustainability Solutions, said Bento, who has a courtesy faculty appointment at the USC Dornsife School of Letters, Arts and Sciences.

“Rapid assessment exercises like this one, as well as direct dialogue with stakeholders, will become signature activities of our new USC Center for Sustainability Solutions,” Bento said. He added the study will help promote dialogue when he presents it to the OECD meeting this week.


Bento was joined on the study by Kenneth Gillingham of Yale University, Mark R. Jacobsen of UC San Diego, Christopher R. Knittel of the Massachusetts Institute of Technology, Benjamin Leard and Virginia McConnell of Resources for the Future, Joshua Linn of the University of Maryland, David Rapson of UC Davis, James M. Sallee of UC Berkeley, Arthur A. van Benthem of the University of Pennsylvania and Kate S. Whitefoot of Carnegie Mellon University. Bento, Gillingham, Jacobsen, Knittel, Sallee and Van Benthem are also affiliated with the National Bureau of Economic Research.

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December 10, 2018 9:08 pm

As fuel economy standards become unachievable, companies just fake the data as occurred for several German car manufacturers. Soon, there will be a 2 million miles per gallon standard and every car from Germany will meet it, without any engine design changes necessary.

Charles Higley
Reply to  Donald Kasper
December 11, 2018 5:11 am

“forcing automakers to achieve an average of 54 mpg in seven years ”

As 60 mpg is about the theoretical limit for gasoline in a car that can actually haul a human and groceries, demanding an average of 55, is terribly unrealistic. It means half of cars would be above 55, which would seriously make them too expensive for most people. Even getting to an average mpg in the 40s is asking a lot, if you also expect these vehicles to be robust and protect the occupants in a collision.

Reply to  Charles Higley
December 11, 2018 6:59 am

“if you also expect these vehicles to be robust and protect the occupants in a collision.”

I don’t think that’s part of the equation.

Reply to  Sheri
December 11, 2018 7:56 am

Right, I think there are a whole bunch of things missing from the analysis. As cars get more expensive, folks will buy smaller cars with less utility. As cars get more expensive, people will stay longer in older less reliable cars, which is a safety issue, and will cause more deaths.

Also I suspect they grossly underestimate the costs involved to get a reasonable car to go 55mpg. Though it isn’t conceptually actually all that difficult if we want to take away most of the utility. To get from 36mpg highway to 55 for my Ford focus, the car would have to be the size of a Ford Fiesta with a 75 hp 900CC engine (approx.. half the current size and power of my current engine.)

Adam Gallon
Reply to  Charles Higley
December 11, 2018 8:41 am

British cars do. Maybe better driver training would help? MPG into the 40s is a doddle. The trouble is, Yanks are just getting fatter & fatter, so can’t fit into normal sized cars.

Reply to  Adam Gallon
December 11, 2018 8:45 am

No, British gallons are actually bigger.

Hugh Mannity
Reply to  Andrewuwe
December 11, 2018 10:27 am

Gallons are the same size — 8 pints. 🙂

Imperial pints are substantially bigger than US ones: 20fl. oz. Imperial, vs. 16 US

Reply to  Adam Gallon
December 11, 2018 8:52 am

Having seen pictures of British crowds, you Brits have no room to talk when it comes to getting fatter.

Reply to  Charles Higley
December 11, 2018 10:50 am

Get a Diesel.
We have a 7 seater people carrier which does 0-60 in under 10secs, could do 130, where legal and averages 58.5mpg long-term and near 70mpg on the motorway.
But they are being demonised, despite the Euro 6 compliant models emitting less pollution (and CO2) than the equivalent performance petrol engine.
Go figure.

Reply to  Bitter&twisted
December 11, 2018 12:05 pm

What brand and type is the vehicle you mention?

Reply to  m
December 11, 2018 3:27 pm

VW Touran 2.0TDi

Steve R.
Reply to  Bitter&twisted
December 11, 2018 1:05 pm

They have run off the diesels with their onerous NOx emissions standards.

Carbon Bigfoot
Reply to  Charles Higley
December 11, 2018 12:40 pm

We owned a 2014 Mercedes GLK Blue TEC Diesel up until a week ago, 40+ MPG on the highway. Smoke and O2 sensors and programming would not keep it out of the service bay. Check Engine Light was an issue and could strand you & prevent engine re-start. Diesels were great but the USEPA has essentially killed the diesel powered automobile over a FAKE SCIENCE PM 2.5 policy.

Reply to  Carbon Bigfoot
December 11, 2018 1:36 pm

A 25 year Mercedes tech, service manager and shop owner would agree with you.

December 10, 2018 9:34 pm

Get rid of ALL mileage requirements. They can only produce more benefits than costs if CO2 externalities are strongly negative when in fact they are unambiguously positive. The only actual climate danger always has been and always will be global COOLING. CO2’s tiny warming effect is almost certainly too small to significantly slow cooling when it comes but it does afford SOME delay and for a few years it will be able to compensate for shortened growing seasons with faster plant growth.

Since the actual CO2 externality is positive it is highly perverse to force people into more dangerous cars in order to have less of it.

Greg Cavanagh
Reply to  Alec Rawls
December 10, 2018 9:49 pm

Indeed. Let the user decide how much fuel economy he/she wants. 4×4’s and SUV’s are popular despite fuel consumption, for a reason.

richard verney
Reply to  Greg Cavanagh
December 11, 2018 12:18 am

In principle, I would have thought that everyone would want to have a car that is as efficient as possible, ie to have the lowest fuel consumption without unduly restricting speed performance.

Whilst CO2 is no problem, if one is interested in saving CO2 one does not sell a car just to buy a newer more efficient vehicle given the amount of CO2 involved in the construction of the vehicle, and in its eventual scrapping. The most CO2 friendly vehicle is an old vehicle.

Interestingly I have a 49 year old vehicle. It is a small Italian sports car, which is geared with a 5 speed gearbox with a 1 to 1 final drive ratio, not overdrive, and when this old vehicle is driven around town, and/or sensibly at speeds up to say ~50 mph, its consumption is no worse than an equivalent size modern day car of say about 10 years of age. to compare, I also have a modernish VW Golf GTI, which has similar acceleration but with a higher top speed due to its overdrive final gear ratios, to have a worse economy around town. and in medium speed give & take driving.

The reason for this is that my old car weighs just under 800 kg, whereas a modern day equivalent small car weighs close to about 1100 kg. The engine on the modern day car with fuel injection is more efficient than my old engine with a carb per cylinder set up, but the extra 300 kg which is about 37% more weight counters any benefit of the more efficient engine in general start stop give take motoring. It is only at high speeds on an open freeway that the modern vehicle becomes more fuel efficient.

Finally, my old car has never had a problem with CO2 emissions since there are no manufacturer’s CO2 figures/data for the vehicle so when it was annually tested the CO2 test was never performed, and recently the UK government has exempted the vehicle from annual testing. altogether. That is not as crazy as it sounds since one looks after an old vehicle much more than a modern work horse.

Another Paul
Reply to  richard verney
December 11, 2018 4:30 am

“…the extra 300 kg which is about 37% more weight counters any benefit of the more efficient engine” That extra 300 kg is most probably the result of NVH expectations, crash standards, and modern conveniences. Air conditioning, insulation, dash padding, seat belts, air bags, power adjustable seats, electric windows & door locks, etc.

Reply to  richard verney
December 11, 2018 5:34 am

Forget about CO2. Fossil fuels are a precious resource that shouldn’t be wasted. It’s a shame that so much energy is thrown away in stop-and-go driving due to braking when the technology exists to recapture half of it through regenerative braking. A Prius gets the same fuel efficiency in the city as it does on the highway. My Ford Escape drops from 35 mpg to 23.

Bryan A
Reply to  Trebla
December 11, 2018 5:57 am

And my 98 Dodge Durango gets an average of 9.9MPG Per tank given combined stop-n-go city and highway driving. Despite the EPA est. of 18 city and 22 highway

Reply to  Trebla
December 11, 2018 10:10 am

I still drive a 98 Dodge Dakota 4×4 with the 5.2l V8 that is even now getting over 12mpg combined and 15mpg on long highway trips. It was never a gas sipper, but keeping up with good maintenance of fluids and ignition components has let my 20 year old truck remain useful for many years. You may consider checking the engine on your Durango.

Greg Cavanagh
Reply to  Trebla
December 11, 2018 1:29 pm

My old 1959 Pontiac with a 1972 455cu got 19mpg on the highway. Which is still way better than your 4×4, wow.

I’ve got a 6lt V8 now because I do a lot of highway driving. I want the car to last me 20 years. You can’t get that out of a small engined car.

Everyone has their reasons. CO2 is the least of it. And for many, like myself, fuel economy isn’t sufficient reason either.

bruce ryan
Reply to  richard verney
December 11, 2018 6:09 am

My love for old Italian cars is full. But I’d like to remind you of all those older American cars running around with a check engine light on (or burned out) that are such a joy to drive behind.
It’s not the co2, it’s the oil and gas being lightly toasted on it’s way out the tailpipe.

Mike Rosati
Reply to  Greg Cavanagh
December 11, 2018 5:09 am

Pedestrian opinion – CAFE standards are the minimum wage-version for vehicles.
If it keeps going up, everyone pays more. Vicious cycle; Where does it end? Corvair, Pinto, Vega, Yugo – how many people died in the name of MPG?

Bryan A
Reply to  Mike Rosati
December 11, 2018 6:02 am

My mom’s first car was a Corvair. Solved the floating front end problem (due to the rear engine) by placing a couple of concrete bricks in the trunk over the front tires. She would regularly beat Triumph TR3s in a race over the Santa Susana Pass Rd.

Reply to  Mike Rosati
December 11, 2018 10:36 am

Corvair was a great car falsely maligned, beginnings of fake news. Had one as a dangerous teenage driver, never had an issue. It sure loved winding mountain roads. Accidentally spun it a couple of times and it never flipped, imagine that.

Ian Ward
December 10, 2018 9:41 pm

Why are standards unachievable ?

Reply to  Ian Ward
December 11, 2018 7:28 am

Cost and safety.

Reply to  Ian Ward
December 11, 2018 7:36 am

“Why are standards unachievable ?”

You’re asking the wrong question. The correct questions are how much are you willing to pay to achieve the standards and what is the cost/ benefit ratio?

See: Law of Diminishing Returns

Reply to  Ian Ward
December 11, 2018 7:45 am

Just need a little imagination for every mile you drive just get out and push the car a mile thus mileage is doubled. Problem solved.

Coach Springer
Reply to  Ian Ward
December 11, 2018 7:52 am

In terms of efficiency, the market should lead the way. So why are standards necessary?

Reply to  Coach Springer
December 11, 2018 8:32 am

Because the market has vastly more interests than just fuel economy. Obama declared that mpg trumps all other considerations.

Reply to  Gamecock
December 11, 2018 6:04 pm

Something else not often mentioned is that families need bigger cars now because of safety. When I was a kid, they threw me in the back in a basinet, when I was two I was sitting on my own in the back (without a seatbelt) Now kids need car seats until they are 6 to 8 so whereas before it was pretty easy to get 3 small kids in the back seat, now it only has room for two, at best, maybe one.

Reply to  marque2
December 14, 2018 7:43 am

Good point.

I remember when we got our first car that had seat belts in it, I asked Daddy, “What do I need this for?”

December 10, 2018 10:03 pm

Arrogant academics playing with numbers to tell us what’s good for us.

Reply to  Lancifer
December 11, 2018 1:04 am

Yes: Intellectual obesity.

Reply to  Alasdair
December 11, 2018 10:52 am

But they are “independent” scientists/economists. The paper was done for UNESCO by a “sustainability” institute. Sure thing!

December 10, 2018 10:18 pm

They wanted 54 mpg and then they started a war on diesel. Not happening without diesel. Maybe not possible with diesel, unless cars shrink to very small size.

Reply to  Phil
December 11, 2018 12:13 am

52mp UK gallon is very achievable with diesels here in the UK Not unachievable with petrol either but the performance tends to be wimpy.

One of te keys is weight reduction, another is aerodynamic efficiency. Aluminium and carbon fibre replace steel, engines get smaller with more turbo boost for the same power… lean burn to the point of detonation.

It can be done. At a price.

The question is of course, why bother?

Zig Zag Wanderer
Reply to  Leo Smith
December 11, 2018 1:07 am

Add 20% to that mpg to get miles per us gallon

Zig Zag Wanderer
Reply to  Leo Smith
December 11, 2018 1:08 am

Sorry, other way around, add 20% to us mpg to get equivalent uk mpg.

Michael Ozanne
Reply to  Zig Zag Wanderer
December 11, 2018 1:39 am

UK gallons are based on an Imperial pint of 20 fluid ounces rather than an ASA pint of16 fluid ounces so :

54 mpg (UK) = 2.7 miles/flOz = 43.2 mpg US

Reply to  Michael Ozanne
December 11, 2018 6:32 am

Don’t forget the 1.04084/1 ratio when comparing US fluid ounces to UK fluid ounces.

Steve R.
Reply to  Michael Ozanne
December 11, 2018 1:17 pm

1US gal = 0.833 imperial gal

so 54 mpg (UK) = 45 mpg (US)

Paul Penrose
Reply to  Michael Ozanne
December 11, 2018 3:27 pm

And 54 mpg (US) = 65 mpg (UK)
Hopefully that makes it clearer to our cousins across the pond why this is not achievable with gasoline engines.

Craig from Oz
Reply to  Michael Ozanne
December 11, 2018 10:00 pm

So… about 4.3 L/100km??

Okay… I think I can get close to that highway but I drive a 2L turbo diesel.

(also about 320Nm of torque. Bit sluggish from a standing start, but after the first second this thing just PULLS. I leave people at traffic lights without ever getting over 2K revs.)

So yes, I could maybe get 4.3L/100 highway, (which in real terms means Adelaide to Melbourne in well under one tank) but I am lucky to get below 7 on my day to day.

December 10, 2018 10:41 pm

more stringent standards — not fewer — would increase costs for cleaner, new vehicles, and as prices for new and used vehicles increase, fleet size would diminish“. Well that means more stringent standards would damage the economy.

Reply to  Mike Jonas
December 11, 2018 2:06 am

Mike Jonas

This bit really pi55ed me off.

The elite determine increasing the price of vehicles reduces fleet size, which in itself is doubtful because goods and people need to shipped regardless of the cost. The cost of the shipping and therefore commodity products, especially, rise. That hits the poor particularly as basic grocery prices rise.

Then the cost of a new or newish vehicle become unattainable for the poorer off and hits the elderly, and people in even rural parts of the country harder. And I’m talking the UK here not the US where ‘remote’ takes on an entirely different complexion.

I calculated the cost of running our modest family hatchback for a year. We lease it for 3 years, and pay 9 x monthly payments as a deposit. Including fuel, insurance, servicing etc. the annual cost is around £5,000. Fortunately there is no risk of unanticipated depreciation however, that means there is no chance whatsoever an elderly person with even a modest institutional pension and the basic state pension could reasonably afford to run a new vehicle.

In my opinion there are other forces at work here. The conversion to expensive electric vehicles (often nearly twice the price of the equivalent petrol engined car) would be resisted were the price differential to remain the same. But if ICE vehicles were to approach the price of EV’s over time because of increasing punitive regulations, the jump to EV’s will be considered small enough to make without too much dissent.

I have nothing against EV’s assuming they compete on a level playing field, but they don’t. Subsidies and preferential government spending of our taxes, often by stealth, mean they occupy a privileged position and only the privileged will be able to take advantage of them whilst the rest of us are punished for simply not being wealthy.

John the Econ
Reply to  HotScot
December 11, 2018 4:24 am

Exactly. In reality, this is just another example of the Progressive War on the Middle Class. The rich aren’t materially affected, the poor will get subsidized, the middle class gets the bill.

old construction worker
Reply to  HotScot
December 11, 2018 5:37 am

HotScot, you hit the nail on the head. Combined that thought with the U.N’s Agenda 21, Club of Rome’s economic agenda, AI, China’s population control, world government X and I get this of image of “1984” and “Soylent Green”. The future of individual freedom looks bleak.

Reply to  HotScot
December 11, 2018 6:13 pm

I did the math when I bought a new car, and under no reasonable circumstances, even driving 200,000 US miles (I hear British miles are 10% more 😛 ) could I justify the extra cost for a similar vehicle. I have a Ford Focus which gets 32 mgp combined, it is a similar size to a Prius which gets about 45mpg – however with the $8000 extra cost I could never make it up (16K vs 24K) Even if I drove 200 000 miles and gas averaged $4 which is much more than average.

Jim G.
Reply to  Mike Jonas
December 11, 2018 6:54 pm

And that really is the point now, isn’t it?
Force people out of private vehicles and in to public transportation.

Ever hear of the book “Nudge” by Richard Thayler and Cas Sunstein (Obama’s regulatory czar)?
A priceless quote from a reviewer:
“It contains great examples of how our benevolent overseers can nudge us in the right direction and help us as mere humans make the decisions we might otherwise be unwilling or too lazy to make for ourselves.”

Ahh yes, our benevolent overseers. Yeah, right.

Phillip Bratby
December 10, 2018 10:43 pm

How many academics (who are are among the world’s top experts in environmental economics and climate change) does it take to produce a “sustainability” report? Ten.

How many scientists or engineers from the real world does it take to produce a sensible report? One.

Reply to  Phillip Bratby
December 11, 2018 2:08 am

Phillip Bratby

There are 22,000 of the blighter’s in Poland right now working on a sustainability report. I think you are being very kind in your assessment.

John F. Hultquist
December 10, 2018 11:00 pm

Why do these experts hate poor people?

Reply to  John F. Hultquist
December 11, 2018 2:09 am

John F. Hultquist

See my comment above.

John the Econ
Reply to  John F. Hultquist
December 11, 2018 4:27 am

They hate the middle class even more. At least they throw subsidies to the poor. The just want the middle class to go away.

Alan Tomalty
December 10, 2018 11:01 pm

This report is complete hogwash. It depends on a negative cost of carbon and increase costs to the consumer. Any fuel savings overall in the economy will just result in the money being put to use in other ways all of which will require energy. The costs of bureaucrats administering the program and the cost to car manufacturers are already enormous, not tpo mention the increased cost to the consumer. There is absolutely no benefit to creating any rule or regulation that requires more efficiency. The market place decides on who buys what. Any attempt to distort that market has a net cost to society.

Reply to  Alan Tomalty
December 11, 2018 6:56 am

I’ve seen the Social Cost of Carbon studies, and the assumptions are largely arbitrary. If one uses different numbers, the “cost” becomes a net benefit.

December 10, 2018 11:02 pm

the economists argue, only more stringent standards — not fewer — would increase costs for cleaner, new vehicles, and as prices for new and used vehicles increase, fleet size would diminish

Rephrased in plain english:

Stringent standards will make cars so expensive that millions of people would no longer be able to afford cars.

Russ R.
December 10, 2018 11:18 pm

They get this wrong, if I am reading it right:

It also flies in the face of economic principles because, the economists argue, only more stringent standards — not fewer — would increase costs for cleaner, new vehicles, and as prices for new and used vehicles increase, fleet size would diminish — not the other way around. The revision “is simply inconsistent with basic economic theory,” the study finds.

The economists are saying that increased costs for new and used cars will decrease the fleet, because less people will buy new cars that are more expensive. This is true for generic products that are interchangeable. New toasters are more expensive, people will buy less of them. But cars have a value strictly for transportation, that can mean the lower end of the used market is variable based on the demand for low cost cars. If enough new cars are sold, functional cars that are low value will be junked. There is just not enough demand for them.
If new cars are too expensive for most people, those low cost functional cars are more likely to stay on the road for longer. That was the “idea” behind “cash for clunkers”. New car prices had gone up, and they were not selling in a bad economy. By getting many of the bottom of the market cars off the market, they created a shortage of used cars, that pushed demand upscale.
Regardless of who is right, is this even smart? One clue is that CA favors higher CAFE standards. Without wading through all the details, you can safely bet it is a stupid idea if CA is in favor of it.

December 10, 2018 11:38 pm

The thing I don’t understand is why do governments have a tax on the sale of new cars?

OK, I know the answer is revenue

The powers that be want everybody to drive a car that doesn’t pollute as much as the previous generation, whilst taxing car sales so much that ordinary people can’t afford a new, less polluting car.

For example, when I was travelling through The Netherlands I noticed most of the cars were really old i.e. at least 10 years old. When I asked why I was told people can’t afford the 45% new car tax.

Add in the stimulus to the economy and every ones a winner.

Reply to  MangoChutney
December 11, 2018 2:18 am


Were the Dutch to have their own motor industry that might be true but, like many other countries, cars are imported from Germany, France, Japan, Korea etc.

Governments use the excuse that as there is no income to the state from taxes etc. on vehicle factory workers they are justified in taxing the imported vehicles themselves.

Reply to  MangoChutney
December 11, 2018 10:37 pm

That’s nothing. About 20 years ago I was commiserating with a Danish friend who could not afford a car, and got to calculating the relative price of some low-end model sold both in the U.S. and in Denmark. In the U.S. it sold for around $14,000, plus perhaps 10% state tax and another 10% license and other fees. In Denmark, the cost for this same car, after all the taxes had been applied, was $46,000.

Ian Macdonald
December 10, 2018 11:42 pm

There is one thing worse than faked mpg figures, and that is faked CO2 emissions. In Europe that can lead to you paying far higher ‘road tax’ (VED) than another vehicle that does exactly the same mpg. I pointed out to our MP that it doesn’t make sense to have CO2 figures and fuel efficiency figures do not vary in proportion. The only source of the CO2 is the fuel, so if a vehicle burns more of it per mile it must release more CO2, and vice versa.

The manufacturers have steadily reduced the CO2 figures year on year, so as to drive the sales of new cars to those who believe in climatism. Yet the mpg figures don’t reflect this. That can’t make sense.

Reply to  Ian Macdonald
December 11, 2018 12:01 am

The US has reduced its CO2 emissions by switching from coal to methane. The older cars were burning coal. (/sarc)

richard verney
Reply to  Phil
December 11, 2018 3:20 am

I do not know about burning coal, but rolling coal is a fad.:

Steve R.
Reply to  Ian Macdonald
December 11, 2018 1:26 pm

@ Ian,
You are correct. I had assumed the CO2 emissions and fuel consumption were linear. I see no reason why it should be otherwise?

Barry Brill
December 11, 2018 12:11 am

Eleven academics, who pompously describe themselves as “scholars”, have formed a “summary judgment that the changes in the 2018 NPRM [notice of proposed rulemaking] are on balance misleading.”

Their opinion is at Little turns on methodology, and the “misleading” tag relies almost wholly on the paper’s adoption of different assumptions. The paper disagrees with the assumptions in BOTH the 2016 mid-term review and the 2018 reversal.

The academics point out that “on the assumptions made in the 2016 analysis for the GHG emissions standard, it finds a net benefit of $97.2 billion, whereas the on the assumptions in 2018 analysis, it finds a net loss of $200.6 billion.”

The “scholars” have compared the NPV of the future CAFE costs to USA residents with the NPV of the foregone benefits to the residents of 194 other countries. These benefits mainly take the form of an assumed decrease in the future global temperature which would have resulted if the NPRM were to force future USA vehicles to average 54mpg by 2025.

All the soothsayers who write these reports are relying on their valuation of future events, which will certainly turn out to be quite different from their prophecies. The scholars seem to believe that their ability to model various scenarios enables them to foretell the future with great accuracy. As Taleb recently pointed out, any person with skin in the game would necessarily regard model outputs as heuristic only. But academics are sublimely unaccountable for any of their opinions, especially those that depend on assumptions based on a groupthink worldview gleaned from within the academy.

The scholars’ assumption regarding the US fleet size in 2029 differs from the Government’s assumption by 6 million ICE vehicles. We will see. But the scholars then assume that the smaller the fleet the greater the net benefits! Every individual who retains a used car does so because his calculus is that the benefits will exceed the costs of so doing. This is ignored. The scholars are solely concerned with externalities and BELIEVE (ie this is faith not evidence) that we would all be better off if motor vehicles were just banned.

I’ll be horrified if this paper cuts any ice with the Courts.

Tom Abbott
Reply to  Barry Brill
December 11, 2018 7:24 am

Thanks for shining some light on the subject, Barry. 🙂

Reply to  Barry Brill
December 12, 2018 6:44 pm

Barry Brill

Let me help you with “faith”. Faith, the substance of things hoped for, the evidence of things not seen.

Thus Greenies have a religion.

December 11, 2018 12:17 am

NASA’s Voyager 2 probe ‘leaves the Solar System’

Reply to  vukcevic
December 11, 2018 1:07 am

By my math, it has achieved about 7000 miles per gallon, and it just keeps getting better!

December 11, 2018 12:29 am

Second, the researchers applied the generally accepted global — rather than domestic — social cost of carbon as a criterion to value GHG emissions reductions.

The social cost of carbon should not be considered. CO2 is net beneficial. Most life on Earth was threatened by insufficient CO2. link On that basis alone (ignoring everything else) the report is bunk.

Reply to  commieBob
December 11, 2018 5:40 am

I spat my coffee out laughing at social cost of carbon … that is a classic EPA speak.

December 11, 2018 12:46 am

They’d probably do more good to just ban new car sales for a year. Make everyone hang onto that old one for one more year, and stop all the manufacturing. (Of course, the economics of this are another matter!)

Matthew Bergin
Reply to  markx
December 11, 2018 8:17 am

I’m still driving my 1992 F 150 with a manual 5 speed and a 4.9 liter inline 6 engine that I paid $200 for 5 years ago. Most reliable vehicle I have ever owned. The engine management computer is the size of a pack of smokes. 20 MPG highway and about 14 MPG in town. Saved a pile of money compared to a new truck and those savings will pay for an almost lifetime supply of fuel for said vehicle. They can take their new cars and shove them.

Alan Watt, Climate Denialist Level 7
Reply to  Matthew Bergin
December 11, 2018 10:00 am

Add in savings on financing, ad valorem taxes and insurance, and your total cost of ownership is significantly lower than a new 50 MPG vehicle. Clearly you must be made to see the light — a $6/gallon carbon tax would probably do the trick.

I tried to make this point to my brother who just bought a Tesla. He believes he will get free charging from Tesla and savings on fuel and repairs over the next 20 years will result in a lower cost of ownership than an ICE vehicle. (a) spending and extra $30K today to save even $40K over the next 20 years is a losing proposition; (b) He won’t be around in 20 years or if he is he won’t be driving; (c) even if he is still driving, most likely Tesla won’t be around in 20 years to provide the free charges and fix all the other stuff that still wears out on an electric vehicle.

Hugh Mannity
Reply to  Matthew Bergin
December 11, 2018 10:41 am

I hear you! My main ride is a 2006 Land Rover LR3, similar sort of fuel consumption. I recently bought a 2001 Land Rover Discovery 2 for off-roading and backup. I don’t want to have to buy a newer car — the LR3 has more computing power than is good for it.

Joel O’Bryan
December 11, 2018 12:50 am

The higher mpg cars are more expensive thus reducing fleet size, as they admit is the goal.
So just like new home construction requiring solar PVs raising the purchase price, California is pricing the middle class out of the new car market as well with the higher mpg CAFE rules.
Cali already is pricing the lower middle class out of buying gas with their carbon taxes.

This is exactly what the French are have a revolt over.

December 11, 2018 1:22 am

Any study is only as good as the quality and objective nature of those who perform the study. I would not place much weight on anything coming from a California government-supported institution when it comes to areas that have been so politicized.

kent beuchert
December 11, 2018 1:38 am

How can anyone possibly justify using estimates of future gas powered car sales without reference to electric cars? General Motors, Volvo, Volkwagen group – Audi, Porsche, VW, Bentley plus other automakers are going ALL ELECTRIC within the next several years. Higher fuel economy means only one thing – smaller vehicles, which will push consumers to an even greater extent towards electric SUVs, etc. which are by FAR the most popular sellers – forcing automakers to discontinue sedans en mass. Future fuel economy standards are irrelevant, as few, if any, cars will burn gasoline/diesel. Fighting over fuel standards ignores the reality of the auto business.
The only new car models with customer waiting lists are electrics – Audi e-tron, Tesla Model 3, Porsche Taycan, Hyndai Kona EV, etc. Tesla sales last month were greater than any other luxury vehices in the U.S. Public demand forced Porsche to double their planned production of their electric Taycan.

Reply to  kent beuchert
December 11, 2018 3:46 am

kent beuchert

“Higher fuel economy means only one thing – smaller vehicles, which will push consumers to an even greater extent towards electric SUVs, etc.”

Absolute nonsense. There are 1 Litre, 3 cylinder, petrol, turbocharged family saloons and SUV’s on the market right now with perfectly adequate performance achieving 50 MPG average. Formula 1 was producing as much as 1,500 BHP from a 1.5 Litre turbocharged 4 cylinder engine in the 1980’s so there’s no shortage of performance.

My last car was a diesel SUV and could cruise at 95 MPH and still return 40 MPG for 400 miles, achieving Euro 6 levels of emission. Nothing electric can even come close to that. The Tesla Model S 85kw would be lucky to see 150 miles without climate control/heating. I was running climate control or heating the whole journey.

comment image

Doesn’t your list of car manufacturers even suggest something wrong here?

It’s littered with top marques with the exception of the Hyundai and perhaps VW. And whilst the argument might be used that technology will filter down to lower marques, so will the price. Nor has there been any meaningful breakthrough in battery technology since the electric car was first developed well over 100 years ago.

The enormous price chasm between ICE engined vehicles and EV’s is being addressed by legislation and taxes. EV’s attracting subsidies (although they appear to have pretty well dried up in some places) and ICE vehicles unnecessary taxes which have caused riots in the streets of France.

Nor are EV’s in the least bit clean. I’m sure it has been pointed out to you many times before that they are coal powered, or at least 85% is coal as the world is wedded to the stuff.

EV’s are an intellectually puerile means of shifting public opinion. They address any problems we might have with ICE’s from the wrong direction with the wrong tools. The public will not tolerate being squeezed for every penny to push through a non solution. A non solution because EV’s bring with them more questions than answers and even if they were implemented wholesale, they wouldn’t address the problem of pollution or increasing atmospheric CO2.

If governments want to address those problems they need to start where it counts, at the coal face, if you like. Nuclear is the only technology that can reduce CO2 emissions, but that’s being swamped by the Chinese with around 1,200 coal fired powered stations being built around the world.

How much of a dent in CO2 emissions will EV’s make faced with that? And at enormous cost to the western world in terms of wealth and living standards.

As I said, intellectually puerile thinking; and obscene virtue signalling.

Reply to  HotScot
December 11, 2018 6:18 am

“As I said, intellectually puerile thinking; and obscene virtue signalling.”

F H Buckley at the New York Post has an interesting take on “virtue signalling”; he thinks a more accurate term would be “vice signaling” because these people are absolutely convinced of their own virtue and are trying to tell other people how bad they are.

Rick Johnson
December 11, 2018 1:56 am

If you trust “academics” today then I got some land I would like to talk to you about.

December 11, 2018 2:23 am

This is the usual “Get rid of cars” that the Greens trot out all the time. Not that it must apply to them, as with their jet travel, because they are doing vital work to “Save the Planet”.


December 11, 2018 2:29 am

Second, the researchers applied the generally accepted global — rather than domestic — social cost of carbon as a criterion to value GHG emissions reductions.

The US SCC is bogus, not because it’s too low, but because they failed to follow OMB rules.

As a default position, OMB Circular A-94 states that a real discount rate of 7 percent should be used as a base-case for regulatory analysis. The 7 percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy…

A 7% discount rate drops SCC to less than zero-point-zero.

Peta of Newark
December 11, 2018 2:34 am

People of The World, let me introduce Stanley Jevons..
via the Grauniad as it happens but he turns up all over the place.
A Real Go-Getting Hard-Hitting Super-Star and strangely, few people seem to know about him.
Can someone do him a Titter account?

Alexander Vissers
December 11, 2018 3:46 am

How can fuel economy be a bad thing? Most exhaust gasses are all but beneficial to humans so a strive for reduction should be embraced.

Reply to  Alexander Vissers
December 11, 2018 4:13 am

because there is an actual drop in functionality with a rise in cafe standards. ever squeeze a 10′ 2×10 into a prius? or 3 kids and a dog? this is something best done voluntarily. which it is since there are so many minis, smart cars, and priuses on the road that state legislatures are considering wheel taxes to make up lost gasoline tax revenues.

Rick C PE
Reply to  billtoo
December 11, 2018 9:36 am

Don’t think I’ve ever seen a SmartCar parked at Costco. 😁

Robert W Turner
Reply to  Alexander Vissers
December 11, 2018 7:51 am

Because of this thing called reality. In reality, there is no such thing as 100% efficiency and perpetual motion machines. Engineers can increase fuel efficiency many ways and have been doing this for almost 50 years now under government mandates, but because you can not achieve 100% efficiency, there are diminishing returns on the engineering. So now for each 1 mpg of increased efficiency, it comes at a much larger cost to do so, and now the average price of a new vehicle in the USA is over $35,000. With the Obama 2025 standards, the average price will be well over $40,000.

And of course you have the halfwit ideas of the government having unsuspected consequences as well. Notice how there are no more compact pickup trucks being made in the US market, despite there being a demand for them? You have Obama 2010 CAFE standard rules to thank for that. These also killed off the stationwagon market in the US. Thank goodness we have Trump to kill off the 2025 standards before we get to see the consequences of those rules, which would likely be a lot more bus rides.

D Cage
Reply to  Alexander Vissers
December 11, 2018 9:05 am

Only if it is real. The stringent tests here in the UK and EU have resulted in car’s gearbox ratios selected to suit the emissions and fuel targets not real driving conditions. As a result we have too small engines struggling and in real life usage with mine often needing second gear to go up the hill at all giving far worse actual economy than its predecessor, which did the same hill in fifth, which on paper did around 80% of the mpg.

Greg Locock
December 11, 2018 3:55 am

Sorry, didn’t read many of the comments. 112 trillion dollars (SCARY BIGNUM) divided by 6 million is suddenly, um not all that much, per vehicle. Or if we turn it on its head, if you come up with a small number and then multiply it by lots of instances you come up with SCARY BIGNUM. Might be true. Bet there’s lots of other BIGNUMs around tho.

112e9 is a very big number. One might even think ‘ludicrous’, if only Musk hadn’t patented that word.

Another Paul
Reply to  Greg Locock
December 11, 2018 4:42 am

“112 trillion…divided by 6 million…not all that much, per vehicle”
You sure? If I did the math correctly, 112e+12 / 6e+6 = $18,666,666.66 112e9 is billion.

John the Econ
December 11, 2018 4:31 am

How much did we pay for that insipid CAFE logo?

December 11, 2018 4:59 am

Those that control the assumptions control the world.
USC doesn’t like it when the Trump administration will not stick its
head in their analytical noose.

Michael Jankowski
December 11, 2018 5:05 am

“…But the researchers were puzzled by the policy reversal, prompting them to conduct an independent assessment of the government’s economic analysis used to justify the change. The authors are among the world’s top experts in environmental economics and climate change, including the study of fuel economy standards…”

Easy to see what the conclusions would be from this “independent assessment” of “top experts” in “climate change” who allegedly undertook this on their own.

December 11, 2018 5:35 am

What happened to, if it saves just one life!

Tom in Florida
December 11, 2018 5:37 am

Fuel economy standards have always been bogus and the numbers manipulated. I have a lead foot. I like to accelerate from a stop as quickly as possible, it is a simple pleasure that I enjoy. I do not care about what that does to my fuel economy numbers.

Reply to  Tom in Florida
December 11, 2018 5:44 am

You know the saying indicative serving suggestion only 🙂

D Cage
Reply to  Tom in Florida
December 11, 2018 8:56 am

You do not need to manipulate to get a fraudulent fuel consumption figure. You choose the gear ratios to suit the test pattern so you get a car that is pig awful to drive and requires non stop gear shifting on all but utterly flat roads and with only a driver but looks good on paper. With four even mid weight passengers and a tiny amount of luggage some small cars need to use second gear frequently to even go at all.

Tom in Florida
Reply to  D Cage
December 11, 2018 11:26 am

You have defined manipulation.

Bryan A
December 11, 2018 5:45 am

“It appears federal officials cherry-picked data to support a predetermined conclusion that the clean-car standards will lead to too many highway deaths,” said Bento, the study’s lead author. “We do not support that conclusion and the data does not support that conclusion.”

The same statement can also be made for the science of climate change
“It appears Climate Change Scientists tuned Climate Models to support a predetermined conclusion that the slight amount of additional CO2 increase since the industrial revolution will lead to runaway climate warming,” … “We do not support that conclusion and the data does not support that conclusion.”only the Modeled climate does.

December 11, 2018 5:51 am

Let us do some math. I have made an Excel spreadsheet that calculates the cost per mile when gasoline costs a certain amount. First, one assumption to help with calculations: you always put exactly 17 gallons in your tank. Also remember that US fuel has that stupid 9/10 of a cent charge. If gas costs $2.309 per US gallon, increasing the fuel economy by 1 MPG saves $1.64 per 17 gallon fill-up, at $3.009 you save $2.13 per fill-up, at $3.509 you save $2.49 per fill-up. These numbers are rounded down. At $3.509 per gallon, you would save about $58.50 per 10,000 miles.

Let us have some fun. The Toyota Camry is rated 29 city, 41 highway MPG with the cheapest MSRP at $23,845. The Camry hybrid is rated 51 city, 53 highway MPG with the cheapest MSRP at $28,150. So the hybrid adds $4,305 to the cost. Assuming mixed city/highway use, let us pretend the average MPG of the regular Camry is 35 MPG and 52 for the hybrid version.

Let us first assume gas is still expensive at $3.509/gallon. With those numbers, after 10,000 miles you will save $327.76. Which means you will have to drive about 131,000 miles before the extra cost of the Camry hybrid is worth it. But let us cut $1.00 off the gas price and make it $2.509/gallon. Now you are saving only $234.36 per 10,000 miles. Which means you will now have to drive about 184,000 miles before the extra cost of the hybrid is justified. Toyota is pretty good with their hybrid, so let us assume you can go 150,000 miles before you need a battery replacement. Then you can see that when gas is under $3.009 per gallon, the hybrid model is never worth it because the cost of new batteries will add the expense.

Now obviously, this is simplistic. But it makes a point. We are at the point where the extra cost for the extra fuel economy is not good for the consumers unless gasoline is California expensive. If adding 1 MPG to a vehicle costs $1,000 more, even if gasoline is California expensive it will not be worth it. Anybody who ever says extra fuel economy is good for the consumers is taking the simplistic approach that 1 extra MPG costs nothing more. Already vehicle manufacturers are doing unsafe things to get that extra MPG, like taking out a spare tire. I read Consumer Reports and they mentioned what vehicle makers are doing, but they also moaned about Trump rolling back the CAFE requirements. I emailed them these facts, even a link to their own website about what vehicles are doing to get extra MPG, and told them the choices are consumer choice and lighter wallets or government choice. I too want high MPG, but I also want consumer choice first.

December 11, 2018 6:10 am

And let’s go back to WWII technology but with modern materials, manufacturing, and computer aided design to get opposed piston diesel engines that are crazy efficient across rated engine rpm …

December 11, 2018 6:32 am

“Antonio Bento, a professor of public policy…”

Somehow I knew the only scientists behind this were scientists with the word “Political” in front of them.

What a fraud.

Bruce Cobb
December 11, 2018 6:37 am

CAFE standards are just one more example of government over-reach, and should be eliminated. Let the free market determine demand for fuel economy. No mandates, and no subsidies. Those are the tactics of Big Brother.

December 11, 2018 7:26 am

As near as I can tell, they are arguing that making cars so expensive that few people can afford them, is a good thing.

Robert W Turner
December 11, 2018 7:31 am

“The authors are among the world’s top experts in environmental economics and climate change, including the study of fuel economy standards.” You know, idiots.

Robert W Turner
December 11, 2018 7:41 am

In a nutshell, they want to substantially increase the cost of new vehicles to where they are unaffordable for anyone but the ruling class and the middle class schmucks can ride the bus.

December 11, 2018 8:40 am

At the root of this is tyranny. Their theory being that government action is justified if the impact is judged to be, on balance, better.

Government’s authorization to interfere is never considered. Fuel efficiency of vehicles is none of the government’s business.

Liberty: freedom from arbitrary or despotic government.

27 mpg. 35 mpg. 55 mpg.

What do all have in common? They are absolutely arbitrary.

Reply to  Gamecock
December 11, 2018 8:57 am

An addendum: “impact is judged to be, by the government, on the balance, better.
And the government gets to set up the standards by which the impacts will be judged, and the government will determine what data is to be used when making the judgement.
PS: Those who benefit from the regulations will be in charge of collecting data and final judements.

D Cage
December 11, 2018 8:50 am

In the cost benefit analysis what is the equation for the benefit based on the validity of climate change? Counting it as zero do you still get the benefit claimed? If you do not then the manufactures surely have the legal right to demand that they are shown that maximum temperature anomaly areas exactly match fossil fuel usage as even if there is heat flow the heat has to flow from high to low. Of course that assumes that using anomaly temperatures is not a fraudulent tactic.
If trade off for safety is done to get better economy surely it is a human right to decide for ourselves if we want to put our neck on the line and possibly die unnecessary as the Grenfell tower victims in the UK. Worse still they did just based on self assessed science when far more qualified experts exist outside the field in each area of “their” specialist study, whether it be data analysis, trend prediction or the computer modelling itself.

December 11, 2018 9:57 am

CAFE standards are just one more example of government over-reach, and should be eliminated. Let the free market determine demand for fuel economy. No mandates, and no subsidies.

I think not all subsidies are bad.

I live in Switzerland. I love the view of pastures with cows grazing and their cowbells ringing. The pastures lined by apple and cherry trees.

Of course, this is not cost-effective. Here comes the subsidy. I’ll gladly pay some more taxes to keep some national heritage alive. Plus, I get to eat really good steaks.

December 11, 2018 10:46 am

I must have missed something, did any of these self proclaimed scholars prove man’s minuscule C02 contribution to a minuscule atmospheric gas is going to warm my winter?

December 11, 2018 1:38 pm

CAFE standards are the manifestation of the silly notion held by lawmakers who believe that they can rewrite the laws of physics via legislative fiat.

December 11, 2018 3:01 pm

These authors are nitpicking. If vehicles on the road (currently over 250 million) is reduced by 6 million it is a rounding error.
The authors argue benefits they admit result from lower miles driven. I have not seen the studies that say if it is cheaper to drive, people drive less.
The authors chose the “generally accepted global ” SCC. The USA uses $40/ton, the only number I found for the global SCC was over $400/ton. Washington State just rejected a carbon tax of $15/ton so the public does not “generally accept” the global SCC. Either SCC is too high.

December 11, 2018 5:03 pm

I have rear a bunch of articles recently where folks in England have bought an old banger (as they call old cars) and insured it all because it was cheaper to buy one than to buy a railroad ticket. With the added bonus of the car still having residual value when the journey is complete.

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