The new Trump administration proposal to freeze rules to build more fuel-efficient cars–and revoke California’s long-standing right to set stronger standards for clean cars–would cost the American economy $457 billion by 2050, according to an analysis from the nonprofit Energy Innovation. It would also push up greenhouse gas emissions 11% by 2035, or 139 million megatons, at a time when the world’s carbon budget is nearly depleted.
Under the current standards, set in a deal with automakers in 2012, cars were supposed to get significantly cleaner between 2022 and 2025, ending up at an average of around 54 miles per gallon and saving drivers gas costs and cutting pollution. The new proposal would freeze standards at 2020 levels.
Most importantly, it also wants to strip California of its unique right to set more restrictive standards than the federal government–a deal written into the Clean Air Act because the state had been regulating smog long before the federal law existed. If California chooses to set stricter standards, other states can follow; 14 states and D.C. have adopted California’s standards so far. At the moment, the state standard and the national one are the same–but if they diverged, automakers could end up making multiple versions of each car to sell in different parts of the U.S. The Trump administration wants to take away California’s right to set higher standards.
The administration argues that higher fuel economy standards are a safety risk, claiming that if cars that are more efficient are more expensive, people will be less likely the buy newer cars with improved safety features, and if they spend less on gas, they’d drive more and therefore be at greater risk of crashes. An Obama-era analysis found no harm to safety from making cars more efficient.
Using an open-source, peer-reviewed digital tool called the Energy Policy Simulator, Energy Innovation modeled the impact of the proposed changes. In the first few years, there would be a small financial boost because less efficient cars are cheaper to build. But as consumers spend more on gas, the costs would start to balloon. By 2040, the cost would be the equivalent of a 57 cent-per-gallon gas tax. Another analysis estimates that an average family would end up spending $200 more a year because of the changes, and perhaps as much as $500 more.
The greatest increase in greenhouse gas emissions would happen in the 2030s because electric cars will grow significantly by the 2040s, the Energy Innovation analysis found. But the growth in emissions is large, and comes at a point when the rest of the world will be trying to quickly cut climate pollution. The proposal would also push fuel consumption 20% higher in 2035 than it would have been otherwise.
All of this could be somewhat mitigated if California can set stronger standards; at the moment, the state and federal standard are the same. The state, and others that have adopted the standard, have vowed to fight in court. That could lead to a split market for automakers, who might end up making different versions of cars for different states, increasing cost.
“Everyone loses at the end,” says Simon Mui, a senior scientist at the environmental nonprofit NRDC and the California lead for the organizations’ clean vehicles and fuels, climate, and energy program. “From a consumer angle, from an environmental angle, from an industry angle, there’s just no great logic [for this proposal] outside of the administration really catering to extremist viewpoints. It’s unfortunate that one of the key drivers for all of this seems to really just be this idea that somebody doesn’t like regulations and therefore all regulation is bad, even ones that are actually very much helping the economy.”
Other countries are continuing to move forward with policy to promote more efficient cars, meaning that American automakers could become less competitive globally. EU regulations are much stricter. India is pushing hard to shift to electric cars. Chinese consumers are on track to buy a million electric cars this year, and policy is pushing that growth. “The auto industry, longer-term, is going to be having China breathing down their neck with their auto industry having more fuel-efficient products and that global market now exceeding the U.S. market,” says Mui. Automakers have said that they don’t want to freeze the current standards.
“The only winners are the oil companies, who stand to sell more gasoline,” says the Energy Innovation analysis.