Tuesday, September 25, 2018

No justification for weaker CAFE standards

Interior view of the 2019 Ford F-150 Limited edition pickup truck. Such luxurious features in what were once utilitarian vehicles showcase automakers' impressive design and technology capabilities. The key policy question is how well these capabilities can be harnessed to improve fuel economy rather than offering ever more niceties at the expense of better protecting the environment. [photo: Ford Motor Company media] 

This week the administration is holding public hearings on their proposal to weaken Corporate Average Fuel Economy (CAFE) standards after 2020. What follows is the comment I prepared for the hearing being held today in Dearborn, Michigan. 

Comment on CAFE and GHG Standards Proposed Rule
for MY 2021-2026


John M. DeCicco, Ph.D.
University of Michigan Energy Institute*

Thank you for the opportunity to present this comment today.

Having reviewed the proposed rule, I find that it fails to scientifically or economically justify freezing the standards for model years 2021 through 2026. My assessments show that the greenhouse gas emissions and fuel economy standards for those years remain sound.

My overarching conclusion is that there is no justification for changing the standards.

The one new development with any significance is that fuel prices are lower now than projected. However, this does not justify weakening the standards. Lower prices are all the more reason why fuel economy and emission standards should remain untouched.

Lower fuel prices increase consumer payback time from 3½ years to roughly 5 years. This change in economics is not enough to justify weaker standards, which remain highly cost-effective for both consumers and society over the life of the vehicles.

Strong standards, such as those we have now, will help keep oil prices down and buffer consumers from inevitable fluctuations in fuel prices.

The fact is that technology is available to cost-effectively meet the standards.

A more conservative study that I conducted several years before EPA’s Technical Assessment Report showed that we could cost-effectively achieve a fleet average of 52 mpg, higher than the new average projected under the current standards. Moreover, these standards have already adjusted to the shift from cars to light trucks and SUVs and they will continue to adjust – as they were designed - to accommodate changes in vehicle sizes and classifications.

While the standards' flexibility helps them track the changing market, we have also seen outstanding progress in automotive engineering. This progress provides automakers with many affordable ways to achieve steady gains in efficiency. The past decade saw average fuel economy rise by 23 percent, even as vehicle sales and performance reached new highs. This is a tribute to the engineering ingenuity of our domestic automakers as well as the industry as a whole. Such gains refute any concerns that the standards put sales or jobs at risk.

In summary, the proposal to effectively freeze the standards after 2020 reflects a denial of basic science and a denial of the auto industry's extensive capabilities to engineer, market and successfully sell ever more fuel-efficient cars and light trucks.

I urge the agencies to set aside this ill-considered proposal and issue final rules for 2021-2025 that maintains steady progress on both fuel economy and emission reduction.
Thank you again for the opportunity to comment.

* These comments represent the professional assessment of the author alone and should not be taken to reflect views or positions of the University of Michigan or any of its units.