US president Donald Trump's elimination of all federal greenhouse gas standards on cars and trucks could raise gasoline prices by as much as 29pc by 2050, according to projections prepared by his own administration.
That higher spending on fuel, along with other effects caused by repealing the tailpipe standards, would result in net losses for consumers of about $180bn through 2055, according to a primary scenario the US Environmental Protection Agency (EPA) published on Thursday in support of its regulatory rollback. The agency's "Scenario A1" shows gasoline prices rising by 75¢/USG by 2050, in constant dollar terms, as a result of higher fuel demand coming from less fuel-efficient but cheaper cars and trucks.
Trump on Thursday cited what he said were "trillions of dollars" in cost savings as a reason for repealing tailpipe standards. But EPA's own modeling shows the potential savings to consumers would be far less, or even result in net costs for consumers. That is before accounting for adverse health consequences caused by air pollution or effects of climate change.
"By EPA's own analysis, American families will pay billions more in fuel costs. To make matters even worse, many people will be burdened with increased healthcare costs from the increase in air pollution that vehicles will be allowed to spew," said Katherine García, director of Sierra Club's Clean Transportation for All Campaign.
EPA administrator Lee Zeldin said on Thursday that the tailpipe rollback would "eliminate over $1.3 trillion of regulatory costs", a figure pulled from agency projections largely focused on savings from lower vehicle prices through 2055.
But that headline figure disregards key costs under the rollback, such as additional spending on fuel and repairs that would total nearly $1.5 trillion over the same time span, dwarfing the potential savings, agency modeling shows.
The extra fuel demand from the rollback has been welcome news for oil producers, who contend EPA's tailipe standards forced consumers to purchase electric vehicles and other models they did not want. Before the rollback, the US Energy Information Administration's reference case in its Annual Energy Outlook showed fuel demand from light-duty vehicles falling to 4.9mn b/d by 2050, down from 8.3mn b/d this year. Oil groups have cheered the demise of EPA's vehicle greenhouse gas standards, even as they push to retain emission standards for oil and gas facilities.
"EPA properly concludes that the Clean Air Act does not provide it with the authority to regulate certain greenhouse gas emissions," Independent Petroleum Association of America chief executive Edith Naegele said.
EPA prepared alternative scenarios that show increased benefits from the rollback. In technical documents released on Thursday, EPA said "Scenario AI" does account for policies Trump is taking "to drive down the price of gasoline and diesel", so it modeled an alternative scenario where oil prices plunge to $47/bl by 2050, compared with a reference case of $91/bl. In that price scenario, net savings would reach $250bn by 2055. EPA also created scenarios showing even higher savings by assuming consumers only cared about the first 2.5 years of fuel savings when buying a more fuel-efficient vehicle.
None of EPA's cost-benefit scenarios accounted for any of the negative health effects of more air pollution, or damage from climate change. Under a recent policy change, EPA assigned a value of $0 for all adverse health effects of regulatory changes. EPA expects the rollback will increase greenhouse gas emissions by 8.3bn metric tonnes of CO2-equivalent, equivalent to about 1.5 years of greenhouse gas emissions from the US.
