Five Reasons Why Trump’s Fuel Standards Rollback is Terrible
7:54 AM PDT on April 2, 2020
The Trump administration is exploiting COVID-19-related economic fears and concerns about traffic violence to justify for its recent decision to slash key Obama-era fuel economy standards — but advocates say their arguments are vague at best, and deliberately misleading at worst.
The administration announced on Wednesday that it'll scrap Obama-era legislation that required auto manufacturers to increase the stringency of auto emissions standards by five percent every year between 2020 and 2026, so that most cars on the road could get roughly 55 miles to the gallon by the middle of the decade — a move that climate change activists says is crucial to safeguard our global future. But after a two-year review, the agency decided that the original standards were simply not feasible – so it's knocking it back to just a 1.5-percent improvement per year.
The timing makes no sense, given that automakers are already on the road to achieving the Obama-era standards.
"Severely stunting these gradual improvements — years before the full benefits of the standards surface — could roll the American auto industry back to when their lots were full of unsold vehicles in the late 2000s" said Jack Gillis, executive director of the Consumer Federation of America in a statement. "This allowed foreign carmakers, with their fuel-sipping vehicles, to reap the sales while taxpayers had to bail out the U.S. carmakers."
But simple feasibility isn't the only reason that Trump officials think that relaxed fuel economy standards are a necessary move — and these other arguments are what's really raising eyebrows.
In a recent promotional video, the National Highway Traffic Safety Administration claimed that letting automakers pollute more might actually benefit the environment — because more Americans will be able to afford slightly cleaner new cars. And then the agency argues that the new rules will help curb our traffic violence crisis, too, along with strengthening the economy.
The only problem? Experts think none of those projections are likely to be true. Here's a quick cheat sheet of the agency's likely logic — and why advocates are rejecting it.
NHTSA: Cutting fuel economy standards will save Americans money at the dealership.
Advocates: Probably not — and they'll pay it all back and more at the pump anyway.
Yes, imposing stronger environmental regulations on the auto industry does cost some money. According to NHTSA, sticking to Obama's 5-percent rule would cost automakers an additional $100 billion in regulatory costs "through model year 2029" when compared to relaxing standards to just 1.5 percent. Those costs, of course, would be passed along to the consumer — and if the agency's math is right, the average new, cleaner car would cost about $1,400 more than a higher-polluting model.
There are a few problems with that logic. For one, there isn't a lot of evidence that $1,400 in savings would necessarily be enough to tempt an American car buyer to head to the dealership rather than just hanging on to his old vehicle. The average price of a new car purchased in the US has been rising for years, but experts think it's not because automakers are being forced to jack up prices to unwilling consumers; they think it's because Americans are simply choosing more expensive vehicles over cheaper ones, because large SUVs and trucks have spiked in popularity in recent years. (Our rising levels of traffic violence, paired with the perception that large cars keep drivers safer in crashes, might have something to do with that.)
But say that every American suddenly has a change of heart about hybrid crossovers and opts for the cheapest car he or she can get, personal vehicle preference and fuel economy standards be damned. Analysts think we'd probably lose all of those dealership savings — and more — to increased costs at the pump.
"The Trump administration rollback will cost consumers in the coming years," Jeff Plungis wrote in Consumer Reports' analysis on the new rules. "Under the plan, consumers can be expected to spend an average of about $3,200 more on fuel per vehicle over the lifetime of their vehicles. Cumulatively, all American consumers would lose about $300 billion, even after factoring in potentially lower new vehicle prices, according to the analysis."
And yes: that analysis is factoring in a plunge in gas prices in the wake of COVID-19, because they're expected to rebound by the time the new rules would go into effect.
NHTSA: Americans will buy more new cars if we cut fuel economy standards.
Advocates: There's no evidence for that — especially during a recession.
Increased car manufacturing has long been sold to the American public as a potential boost to a troubled economy — and NHTSA is channeling that message in their publicity. The agency estimates that Americans will buy 2.9 million more new cars between now and 2029 if we get rid of some of those pesky regulatory costs — and though the rollbacks have been in the making for years, that argument that might seem even more relevant in our current moment of economic turmoil.
But the idea that Americans will buy new cars to replace their old ones if prices at the dealership drop may be wishful thinking. Used vehicle sales have consistently eclipsed new vehicle sales for years despite market price fluctuation, and demand for new vehicles has remained relatively flat for almost a decade.
The only fluctuation in the demand for new vehicles came in the years following the global recession of 2008 and 2009 — when of course, new vehicle sales cratered rather than rose. All auto sales plunged to historic lows in the wake of the financial crisis, and didn't reach pre-recession levels again until 2015. We won't know for some time how the COVID-19 crisis will impact auto sales, but we do know this: millions of out of work Americans are certainly not shopping for cars right now — and as the cascading effects of COVID-19 play out, no one is expecting that dealerships will be crowded anytime soon.
Absent a serious cash-for-clunkers program — which NHTSA, it should be noted, is not suggesting — there's a good chance that millions of Americans will skip the latest models and keep buying used like they've largely done for decades. Yes, as our national vehicle stock ages, some of those used cars would be a little more fuel efficient under Trump's proposed rollbacks, but not enough to curb climate change.
NHTSA: Newer cars are safer cars — so making it cheaper for Americans to buy them will save lives!
Advocates: Cool, but how many lives are we talking — and whose?
There have been amazing advances in vehicle technology in the last decade that have saved countless driver's lives. But while stats like the SUV rollover rate has plummeted, pedestrian and cyclist fatality rates have soared — and those facts are absolutely related, since the safety improvements that are saving drivers (read: making cars bigger, more heavily armored and less likely to flip in the event of an impact) are the same things that kill vulnerable road users.
NHTSA estimates that 3,330 fewer crash fatalities and 397,000 fewer crash injuries would occur over the next nine years under the new guidelines (that's just a 0.9-percent drop from the 2009-2018 baseline). But even those pathetically small numbers may contain some flimsy assumptions: that more Americans will actually buy new cars if prices drop (see above), that these safety features would even save that many lives (earlier NHTSA analysis put the fatality reduction closer to 700 people); and that short-term increases in smog from less fuel-efficient cars wouldn't kill more people than we'd save in collisions (the same analysis said they probably would).
And that's before we even get to the fact that, even if NHTSA's wishful thinking came true, we'd likely be trading driver deaths for pedestrian deaths — and climate change deaths.
NHTSA: If we lower fuel efficiency standards and make cars cheaper, we'll replace a ton more old, gas-guzzling cars with new ones — and that might be better in the long run than having strong fuel standards on expensive new vehicles no one can afford to buy!
The gist of the administration's logic seems to be this: expensive, fuel-efficient cars are only good for the planet if people actually buy them and retire their older, super-polluting models at the same time ... so we might as well not require automakers to make their cars more fuel-efficient cars at all.
Yes, really: the Trump administration is arguing that, because cheaper cars with worse fuel economy might attract more buyers, we shouldn't require any automakers to develop highly fuel-efficient cars that might just sit on the dealership lot, unbought. The planet might be better off, the thinking goes, if we put cleaner cars — not that clean, mind you, but at least cleaner — within financial reach of more Americans.
If you're scratching your head at this, you're not the only one. Even NHTSA's own video acknowledges that under their proposed plan the fuel efficiency of the average car on the road would be 40.4 miles per gallon — while, under Obama-era standards, it would be 46.7 mpg. Maybe the agency is clumsily pointing out that neither administration's policy achieves the 55 mph average vehicle fuel efficiency that advocates say should be our goal if we want to curb climate change, so a low 40.4 miles per gallon is...close enough? The NHTSA numbers are vague here.
Here's what's crystal clear: if want to stop climate change, we need to be doing everything we can to get the average fuel efficiency of all cars on the road as high possible, in addition to a widespread shift to vehicles that need no gasoline whatsoever, like bicycles, and a decreasing the carbon emissions per traveller by putting more people on public transit. Transportation is the number one source of climate change-causing emissions in the U.S. — and we simply can't afford to slow down any progress towards cleaning up the sector.
NHTSA: Millions of more Americans would be put back to work if we sold more new cars!
Advocates: Not if the rest of the world refuses to buy our dirty vehicles.
Many presidents have believed that car manufacturing is the answer to lowering unemployment, but it's not. For now, let's just focus on one obvious reason Trump's rollback will fail the jobs test: because U.S. automakers sell in a global market, and nearly every government in the entire world thinks the fuel-economy backtrack is dangerous. As a result, there won't be a very good foreign market for dirtier, less-efficient American cars — and that means those "good" manufacturing jobs could very, very easily disappear.
American auto manufacturer General Motors actually sells more cars in China than it does in the United States, ostensibly because of the Chinese people's love affair with the Buick. North America is the leading market for Chevrolet, but the U.S. only makes up 36.9 percent of the company's total sales; the rest of its cars are bought internationally, with a particularly large concentration of purchases in Brazil, where Chevy owns a huge plant. (We shouldn't have to remind anyone that "American" carmakers don't necessarily make all their cars in America. Moreover, dips in sales absolutely hurt workers in Detroit, since expensive domestic workers are often the first to be cut when companies scale back.)
Ford, by far, is the American automakers that's least reliant on foreign sales, but that's not necessarily a good thing; the company's stock has dropped 70 percent in value over the last two decades, and market analysts speculate that the company is in decline because of its failure to crack the overseas market.
“Tragically, good manufacturing jobs across the country will be at risk with this rollback," said Gillis. "Jobs will be lost if Detroit again cedes market share to foreign car companies that are better equipped to meet increasing global demand for more fuel efficient cars. And with the coronavirus pandemic and associated increase in unemployment, Trump’s decision only makes things worse.”
We have every reason in the world to resist Trump's rollbacks — especially in this uncertain economic moment. But even if we weren't in the midst of a pandemic, we'd owe it to our planet to fight back.