Press Release

Fuel Economy Standards: Take the Time to Get It Right

Jan 18, 2017

WASHINGTON—In 2012, the US Environmental Protection Agency (EPA) and Department of Transportation (DOT) set up a program that together with the Clean Power Plan account for most of the Obama administration’s efforts to reduce US emissions. That program was the new federal standards covering passenger vehicles for greenhouse gas emissions and fuel economy. It was to be extended through 2025, but at the time the standards were set, a midterm review was required by 2018 to consider whether changes were advised based on new information. However, in a surprise move, EPA last week completed its part of the review and asserted that the “administrative action” was not subject to congressional veto under the Congressional Review Act and other attempts to reverse “midnight regulations.” However, according to a new blog post by two experts at Resources for the Future (RFF), a longer review would be desirable given the critical issues at stake.

RFF Senior Fellows Alan Krupnick and Joshua Linn point out in their new post, “Fuel Ectonomy Standards: Take the Time to Get It Right,” that a variety of issues deserve a thoughtful airing, such as crediting for electric vehicles. To cite another example: The standards initially were projected to roughly double new vehicle fuel economy—another area that calls for reexamination because of low oil prices.

The authors also point out that DOT has not yet completed its review—and, in any case, the Trump administration will surely reconsider the standards one way or another. The authors note that they “hope the new administration will consider several economic developments that affect costs and benefits.” They list and expound upon three areas that will merit close watching and expert assessment:

  1. Lower gasoline prices reduce consumer benefits of higher fuel economy.
  2. The social cost of carbon is higher than previously estimated, raising societal benefits.
  3. Energy security benefits are lower than previously estimated.

Read the full blog post: Fuel Economy Standards: Take the Time to Get it Right.

Resources for the Future does not take institutional positions. Please attribute any findings to the authors or the research itself. For example, use "According to research from RFF …" rather than "According to RFF …".

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Resources for the Future (RFF) is an independent, nonpartisan organization based in Washington, DC, that conducts rigorous economic research and analysis to improve environmental and natural resource policy.