Trump's Fuel Economy Pitch Aims to Keep Americans Off the Road

People will choose not to get behind the wheel due to higher costs connected with the easing of Obama-era fuel economy standards, the proposal claims.

AP Photo/Richard Vogel
Aug. 12, 2018, 8 p.m.

The Trump Cabinet is selling a major fuel economy overhaul to lawmakers and the public by arguing the change will save lives—by making it more expensive for Americans to hit the road.

The Environmental Protection Agency and Transportation Department unveiled a nearly 1,000-page proposal this month to scale back fuel-efficiency regulations for cars and light trucks. That would reverse a cornerstone Obama-era environmental policy, particularly as the transportation sector now emits more pollutants than power plants.

But the Trump administration is largely prioritizing safety in making the case for a revised Corporate Average Fuel Economy standard. A key claim in the sales pitch is that the policy change will save roughly 1,000 lives annually, compared to the current standards.

Half of those potential saved lives assume that consumers will choose not to drive because of higher costs tied to weaker efficiency, the reverse of a phenomenon known as the rebound effect.

“If you roll back the standards, that’s going to reduce the driving,” Ken Gillingham, an economist at Yale University who has studied fuel economy, told National Journal. “If there are fewer people driving, there are fewer miles driven and fewer fatalities.”

That argument from the administration comes at an interesting time. Trump browbeat the Organization of Petroleum Exporting Countries to boost oil production in recent months, a move to decrease global prices so Americans could hit the road during the summer and pay less at the pump.

The oil cartel did boost production at a high-profile summit in late June. Gas prices have roughly plateaued since the summit, now averaging $2.85 per gallon of regular gasoline nationally.

Roughly 37,500 people died in 2016 in U.S. vehicle collisions, according to the Transportation Department. That’s a sharp uptick from recent years. In 2014, fewer than 32,700 lives were lost on American roads. Opponents of the current standards, and even oil-industry stalwarts like Harold Hamm, argue that’s because Americans are driving smaller, more-efficient vehicles.

But Americans are also spending far more time on the road. From May 2017 to May 2018, Americans drove more than 22 billion more miles compared to the same time period the previous year, according to the Transportation Department. Many analysts associated that uptick with a strengthened economy in the wake of the recession.

The Obama-era standard, which remains in place, gradually increases fuel-economy requirements for new cars and light trucks to 54.5 miles per gallon by model year 2025. Congress initially passed fuel-economy standards in 1975, largely in response to the 1973 Arab oil embargo. The U.S. continues to import crude, but now produces oil at record thresholds.

The Trump rollback, meanwhile, is proposing to freeze the annual increase at model year 2020. That freeze will keep Americans more at home, the workplace, or anywhere else not on the road, the proposal says.

“The resulting increase in their per-mile fuel and total driving costs will lead to a reduction in the number of miles [that vehicles] are driven each year over their lifetimes,” says the proposal.

Most economists agree that the rebound effect, and the reverse of it, are legitimate factors, although Gillingham and others argue that the proposal overestimates the likely effect on driving behavior—and therefore potential lives saved.

But other analysts are even more skeptical.

“That [rebound effect] argument is one of the most convoluted arguments that I’ve ever heard,” said Jack Gillis, the executive director of the advocacy group Consumer Federation of America. “The concept of people driving less than they would if the fuel efficiency increased … it’s just hard to conceptualize why someone would do that, unless they had the opportunity, unless people are driving around on willy-nilly road trips all the time.”

The rebound effect, however, is only one pillar of the safety pitch. The proposal argues that a rollback of the standard will decrease the price of cars, which will lead Americans to purchase new cars with better safety features. And the administration claims that the rollback will allow more purchases of larger vehicles, which can better protect passengers in the event of collisions.

Those latter two points have come under fierce criticism since the plan's rollout, but the proposal has also gained significant support based in large part on those arguments.

“Even if they have close to zero number of lives saved based on the avoided number of the rebound effect, their decision would still be justified on the basis of those other lives saved, from both purchasing of new cars and avoiding downsizing,” Sam Kazman, general counsel at the conservative Competitive Enterprise Institute, told National Journal. “It’s my suspicion [that] when it comes to the effect of downsizing, they underestimated that number.”

Many analysts and lawmakers argue that U.S. automakers will be put at a competitive disadvantage globally if they are not coerced into producing smaller, more-efficient vehicles. The administration also faces legal challenges from California and more than a dozen other states that have vowed to keep in place strict standards.

An extensive consultation-and-commenting process will take place before the rule can be finalized. Still, the administration is clearly planting a flag on the safety front.

“It’s my goal, and the administration’s goal, to come up with a 50-state solution that does not necessitate preempting California,” EPA Acting Administrator Andrew Wheeler said in Senate testimony Aug. 1. “However, there are important goals in the proposal, and there’re important goals on highway safety, so we’d have to make sure that those are met. The proposal will save a thousand lives per year, which I think is important.”

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