Fuel Economy Standards vs. Vehicle Costs
From The ‘Job-Killing’ Fiction Behind Trump’s Retreat on Fuel Economy Standards:
"...the original CAFE standards were signed by President Gerald Ford, a Michigan Republican, in 1975. The key Clean Air Act provisions that successfully slashed tailpipe pollution, and that provide the legal basis for the more recent motor vehicle greenhouse gas standards, were developed under the administration of Richard Nixon, who signed them into law in 1970... Both Nixon and Ford were business-friendly Republicans, but ones who recognized that as national leaders they had many other legitimate public concerns to address."
"Trimming a vehicle’s CO2 emission rate may involve, for example, developing a new transmission... Those development costs mean jobs for engineers. Building the redesigned transmissions then creates jobs for assembly workers. So whatever additional costs are incurred go right back into materials and labor, including jobs for steelworkers and others involved in supplying parts and materials to the auto industry."
"The latest market collapse, in 2008, triggered massive job losses — even though it followed two decades of declining vehicle efficiency tied to stagnant CAFE standards."In the years before the recession GM was warning that their obligation to pay employee health care costs – not fuel economy standards – would bankrupt them. In 2005, retiree health care costs added about $1,300 to the cost of every GM vehicle.
"Automakers note that according to EPA’s own economic analysis, they will have to cumulatively spend $200 billion to comply with the standards over the 2012-2025 period... Over that same time period, the new car and light truck market will rack up at least $7 trillion in revenue. So the $200 billion cost estimate amounts to only 3 percent of gross sales."Recap: in 2005, retiree health costs added $1300 to each vehicle. In a new vehicle costing $30,000, about $875 will be attributable to fuel economy standards.
Update: I arrived at that figure by simple math, but it turns out the EPA's estimate is similar. From gm-vol.com:
"The Environmental Protection Agency had estimated that automakers would have to spend an additional $875 per vehicle to meet the second phase standards starting in 2022, compared to 2021 standards. The [study by the research group International Council on Clean Transportation] reported that cost would only go up by about an additional $551 per vehicle."
"...the move to begin raising CAFE standards actually began under the George W. Bush Administration, which crafted the 2007 energy bill calling for much higher standards."
"And if the autoworkers bussed in by GM, Ford, and Chrysler to cheer for Trump at his Michigan rally think that gutting regulations is going to create jobs, well, they will have been fooled again."That seems like a big "if" – I wonder if anyone has actually asked them what they think.
