RFF on the Issues

RFF on the Issues: Midterm Review of Fuel Economy Standards Still Warranted

Mar 9, 2017 | Peter Nelson

Before leaving office, the Obama administration finalized new fuel efficiency standards aimed at mitigating greenhouse gas emissions. The standards require that cars and light-duty trucks have a fuel economy of 54.5 mpg by model year 2025. A midterm review to assess the standards was set to be completed by 2018. However, the Trump administration is looking to overturn these regulations. While automakers argue the “Obama rules could add thousands of dollars to the price of new cars and cost more than a million jobs,” many state lawmakers are opposed to the idea of uniformly reversing the regulations. Doing so “could absolutely be harmful to the health and well-being of the residents of our state and the people of our nation,” said Senator Kamala Harris (D) of California.

“The point of the midterm review was to incorporate new information in setting the standards,” write RFF experts Joshua Linn and Alan J. Krupnick; “with some arguments for tightening the standards (or at least keeping them on their prior schedule), and other arguments for relaxing the standards, we feel that a considered review is warranted.” They highlight multiple factors that should be considered in assessing the economic impacts of the regulations, including: the effect of low gas prices on benefits to consumers from higher fuel economy, the societal benefits resulting from a higher estimate of the social cost of carbon, and changes in estimated energy security benefits. “This review should also consider important issues such as further harmonizing the EPA and DOT programs, as well as the rules for banking fuel economy reductions,” according to the authors.

Read the post for their full take on issues that should be considered in the midterm review: Fuel Economy Standards: Take the Time to Get It Right.

Read more about the RFF transportation initiative: The Transition to Cleaner Vehicles and Fuels.

RFF on the Issues connects today’s pressing news with related research and expertise at RFF.

The views expressed in RFF blog posts are those of the authors and should not be attributed to Resources for the Future.