Higher fuel-economy standards will raise car prices, cost jobs 

In September, the National Highway Traffic Safety Administration and the Environmental Protection Agency and are expected to release new Corporate Average Fuel Economy standards. As currently conceived, the regulations would effectively be a regulatory mandate for Americans to drive electric cars.

CAFE standards were already raised two years ago, but the new rules would go much further, bringing the average required miles-per-gallon standard to as high as 56 mpg. (Toyota’s hybrid, the Prius, gets just 50 mpg.)

This could increase car prices by nearly $10,000, and cost 1.7 million jobs, according to a study by the Center for Automotive Research, as cited by Popular Mechanics.

The Obama administration is pushing back against these estimates, according to Edmonds AutoObserver, claiming a 56 mpg standard would add $2,100 to $2,600 to the initial cost of a new vehicle in 2025, but that this would be more than offset by fuel savings of $5,500 to $7,000 over time.

Yet even if we take these more optimistic estimates at face value, it still doesn’t change how the new standards would be limiting individual choice and infringing on personal liberty. The administration’s argument that, over time, car buyers will recover the increased cost resulting from higher CAFE standards disregards many consumers.

It will take at least three years to recoup the higher cost of the new vehicles, yet many people prefer to lease cars. Those who own cars but don’t drive them much may never rack up enough mileage to realize the potential fuel savings. And some car buyers may not even be able to afford to pay extra up front.

Given the draconian fuel economy standards CAFE would impose, in practice, the new standards would force most American drivers to buy electric vehicles such as the Chevy Volt, conveniently produced at the bailed-out General Motors.

Not only do tough CAFE standards restrict choice, they can kill. A 2002 report by the National Academies of Sciences found that the increase in fuel economy standards in the 1970s and 1980s boosted the production of lighter-weight vehicles that can’t handle collisions as well as heavier vehicles. As a result, 1,300 to 2,600 more people died in auto accidents in the year they studied (1993) than would have otherwise.

 

Philip Klein is a senior editorial writer for The Washington Examiner.

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Monday, Sep 15, 2014

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