News
13/02/26
US climate rollback set to raise gasoline prices
US climate rollback set to raise gasoline prices
Washington, 13 February (Argus) — 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. By Chris Knight Send
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