The Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy Mandates on the U.S. Economy

Full Description:

This study conducted by the Center for Automotive Research (CAR) constitutes an economic cost benefit analysis of the national standards for light duty vehicle fuel economy (FE) and greenhouse gas emissions (GHG) set by the U.S. National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA) for the years 2017-2025. The study estimates the effect of higher fuel economy mandates and the adoption of related technologies on U.S. motor vehicle market, production, and automotive manufacturing and automotive dealership employment in the year 2025. The study also discusses other effects of the fuel economy and GHG mandates on the U.S. economy, and contains CAR’s policy recommendations pertaining to the mid-term review of the national standards for 2022-2025.

Employing the most recent range of gasoline price forecast levels from the U.S. Energy Information Agency (EIA), CAR analyzed nine scenarios using $2.44/gallon, $3.00/gallon, and $4.64/gallon in 2025 dollars and FE/GHG mandate cost levels of $2,000, $4,000, and $6,000 per vehicle. The study finds that the level of fuel prices directly determines the economic effects of 2025 fuel economy and greenhouse gas regulations. If the value of fuel savings to the new vehicle buyer falls short of the cost of mandated fuel economy technologies, then U.S. automotive sales, production, manufacturing, and retail employment will fall, which will result in serious consequences for the entire U.S. economy.

Comment submitted by Center for Automotive Research (CAR)

Submitted electronically to: www.regulations.gov

Docket ID Number: EPA-HQ-OAR-2015-0827

Reference: Proposed Determination on the Appropriateness of the Model Year 2022-2025 Light-Duty Vehicle Greenhouse Gas Emissions Standards under the Midterm Evaluation

Public Submission: 12/29/2016 | Posted: 12/30/2016

EPA-HQ-OAR-2015-0827-6105

Subject: Corrections and clarifications to the various references to the Center for Automotive Research’s The Potential Effects of the 2017-2025 EPA/NHTSA GHG/Fuel Economy mandates on the U.S. Economy as found on pp. A-41 through A-42; A-80 and A-87 and the Technical Support Document, pp. 4-17 through 4-20.

https://www.regulations.gov/document?D=EPA-HQ-OAR-2015-0827-6105