Quantcast
Connect with us

The math on why the Trump administration’s fuel standards report is seriously flawed

Published

on

Fuel economy standards are an important way for the U.S. to combat climate change. However, a 2018 study conducted by the Trump administration proposes hitting the pause button on regulations, potentially leaving billions of dollars in benefits on the table.

This is a significant change from the Obama administration, which ramped up prior fuel economy standards. That administration mandated the fleet-wide fuel economy of passenger vehicles and light trucks to reach 54.5 miles per gallon by 2025. The federal government’s cost-benefit analysis, completed in January 2017, concluded that this was technologically feasible and that benefits exceeded costs by over US$90 billion.

ADVERTISEMENT

The current administration challenges that conclusion and recommends freezing standards at model year 2020 levels through 2025. Their analysis finds that the costs exceed the benefits by over $170 billion – a difference of over $260 billion from the previous report.

Who is right? The answer matters, because fuel economy standards are the last remaining major federal regulation to fight greenhouse gas emissions. The current administration has eliminated other regulations related to clean power and is promoting coal consumption. If the Obama administration’s analysis is correct, then pausing fuel standards will cost the economy money and impact the environment. If the Trump analysis is correct, then this may be the right call. There is a lot at stake.

My colleagues and I analyzed the differences between the two reports, looking to see whether those differences are supported by research and best practices. While both studies contain flaws, we found that the Trump administration’s study contains more.

First, the Trump administration’s study doubles the “rebound effect” – it assumes that consumers will drive twice as many extra miles if they purchase an efficient car. As a result, this leads to more traffic deaths, a claim that has been repeated a number of times. Yet, there is no justification in the research literature for doubling the rebound effect, so this focus on costs associated with increased accidents and deaths is artificial.

The study’s second flaw is that it ignores the global impact of carbon emissions, only looking at the impact on the U.S. This effectively announces to the world that the U.S. does not care about climate impacts outside of its borders. This is a major difference that reduces the social cost of carbon – the economic harm due to emitting a ton of CO2 into the atmosphere – from $48 per ton globally to only $7 per ton in the U.S. This impacts the bigger picture, as it reduces the benefits of fuel standards from $27.8 billion in 2016 to $4.3 billion in 2018.

ADVERTISEMENT

Third, the study claims that eliminating the fuel economy standards decreases the number of vehicles on the road by 6 million cars by 2029. However, this is completely inconsistent with economic theory, which predicts that tighter standards make both new and used vehicles more expensive. As standards increase vehicle prices, total fleet size should decrease over time – but the 2018 analysis claims the opposite.

In contrast, if standards are rolled back, this should increase demand for vehicles, resulting in a larger fleet. This mistake alone leads the Trump administration to claim over $90 billion of cost savings, from the fewer cars on the road, that just aren’t there.

Mistakenly assuming 6 million fewer cars on the road also means that the study’s assumptions about miles driven and fatalities from car crashes may be off, too.

ADVERTISEMENT

Finally, the Trump administration study doubles the assumed costs of new technologies required to meet fuel standards compared to the 2017 analysis. We couldn’t find any empirical justification for that.

The Obama administration’s study found $90 billion in net benefits, while the Trump administration’s found a net loss of $186 billion. If the first analysis is right, then the U.S. is leaving this $90 billion on the table by not capturing those net benefits.

ADVERTISEMENT

Both researchers and the administration need to take a closer look at the data, because this latest study could have a lasting impact on climate change protections in the U.S. and climate change in the world. A change this important needs to be supported by data and best practices, rather than flawed statistics.The Conversation

Christopher R. Knittel, Professor of Applied Economics and Director of the Center for Energy and Environmental Policy Research, MIT Sloan School of Management

This article is republished from The Conversation under a Creative Commons license. Read the original article.

ADVERTISEMENT


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Facebook

Devin Nunes likely under federal investigation over foreign contacts after Parnas phone call revelation: ex-FBI official

Published

on

On MSNBC's "AM Joy," former FBI Assistant Director for Counterintelligence Frank Figliuzzi speculated that Rep. Devin Nunes (R-CA) may already be under FBI investigation for his secret calls with indicted Rudy Giuliani associate Lev Parnas.

"What do you make of the fact that the ranking member on the House Intelligence Committee, who participated in the Adam Schiff portion of the impeachment hearings, never said anything to anybody about the fact that he was not just the guy who's sitting on the dais, he was involved in some way with one of the players?" asked host Joy Reid.

"Well, it says a lot on two levels," said Figliuzzi. "It says a lot about Devin Nunes as an individual, his ethics, his integrity, and what he's all about. And then on a larger level, it's just a huge, ironic development that we're hearing all of this about — the Republicans are defending allegations that the president lacks integrity and ethics, and they're sitting there overseeing this and they're not recusing themselves, and they're not saying anything about their colleague, Devin Nunes. So, you know, the hypocrisy is loud and clear here. And eventually when the dust clears, Joy, I wouldn't be surprised if ethics investigations and perhaps even criminal investigations really point the finger at Nunes as someone who should have recused himself and is much deeper into this than we know now."

Continue Reading

Breaking Banner

Trump hammered by ex-intel officials for sucking up to the Saudis after Florida naval base shooting

Published

on

President Donald Trump is taking heat from former U.S. intelligence officials for taking a very soft tone with the Saudi government after Friday’s shooting at the Naval Air Station in Pensacola, Florida.

Not long after the shooter was identified as a second lieutenant in the Saudi Arabian military, the president tweeted out words of sympathy from the Saudi king after a phonecall, writing, "The King said that the Saudi people are greatly angered by the barbaric actions of the shooter, and that this person in no way shape or form represents the feelings of the Saudi people who love the American people."

Continue Reading
 

Breaking Banner

Former right-wing presidential candidate scamming Americans with toxic bleach cure

Published

on

Former diplomat and Reagan adviser Alan Keyes is a well-known gadfly who has run multiple times for president and for Senate, most famously against future President Barack Obama in 2004.

But lately, according to The Daily Beast, he has been involved in a different pursuit: the promotion of a dangerous pseudoscience scam known as the "Miracle Mineral Solution," or MMS.

The substance, which is actually just the powerful bleach chlorine dioxide, is supposedly a cure for everything from viral infections to infertility, and there was even a cultlike church known as the Genesis II Church of Health and Healing, that promoted it as a gift from God. MMS has particularly taken root in developing countries like Uganda, but it also has a following in the United States, and many autistic children have been forced to drink it. Versions of this scam have even been promoted on Amazon.

Continue Reading