More stringent standards will save drivers big money

Will President Barack Obama's mandate requiring automakers to achieve a 54.5 mpg fleetwide average by model year 2025 spur economic growth?

As is the case with other environmental and energy regulations, conservatives generally say no, citing high compliance costs and burdens placed on business.

A balanced assessment, though, should consider that fuel economy standards, like other regulations, bring benefits as well as costs.

Reducing fossil fuel use by raising gasoline taxes and creating a carbon fee would be more economically efficient than regulation, especially with our current low gasoline prices. However, there is too little political support to adopt either of these options.

The only viable alternative is regulation, which is why the Obama administration negotiated agreements with auto companies on new fuel efficiency standards. Passenger vehicles were to get an average 34 mpg by this model year and then increase upward to 54.5 mpg by 2025.

The rules also set greenhouse gas emission limits for cars, trucks and SUVs.

Along with the administration's clean power plan affecting coal-fired power plants, the fuel efficiency standards are an integral component of climate change policy.

About one-third of U.S. greenhouse gas emissions come from transportation, second only to power plants. Half of that, about 16 percent, comes from light duty vehicles.

These fuel efficiency rules were adopted only after extensive consultation with the auto industry, auto workers, consumer groups, environmental and energy experts and state governments.

Thirteen major automakers supported the initiative to develop a consistent nationwide standard and create regulatory certainty going forward.

Moreover, the Environmental Protection Agency and the Department of Transportation continue to work closely with auto companies on how the rules will be applied. So the new standards should be recognized for the consensus they reflect. They are not some irresponsible edict from unaccountable bureaucrats in Washington.

The results already are impressive, with much more to come.

Anyone who has driven a newer vehicle cannot help but notice the improved fuel economy, the biggest jump since adopting the standards in 1975. It should be clear as well that the fuel economy rules are a good deal for us and will improve economic growth across the nation.

People will pay a little more for their vehicles, but they also will save a lot of money on gas.

The EPA says that savings for purchasing a typical 2025 car will be about $8,000 during its useful life. Moreover, the agency's regulatory impact analysis for the 2017 through 2025 model years show benefits are about three times the anticipated costs - even though many benefits were not taken into account or were not fully measured.

Simply put, improved fuel economy translates into important gains in public health, since burning less fuel improves urban air quality while the risk of climate change lessens, and improved energy security flows from lowering the nation's dependence on imported oil. These benefits are both important and substantial.

It is also not surprising that a 2015 comprehensive, peer-reviewed study found that the new fuel efficiency standards “would lead to increased U.S. economic and job growth, both within the auto industry and throughout the economy.”

Why is that? Consider transportation innovation. We are at the forefront of major technological change in vehicle design, from automatic braking systems to self-driving vehicles.

To meet the new fuel economy standards, vehicle manufacturers will explore new engineering designs, from lighter weight components to greatly improved battery technologies.

And there will be profitable markets globally for such batteries beyond electric and hybrid vehicles, including storage for electricity generated from wind and solar power facilities.

These kinds of developments are likely to help the U.S. become more economically competitive and resilient in a shifting and uncertain world economy. Such changes are very much in our economic interest even as they improve our health and well-being and reduce greenhouse gas emissions.

Michael E. Kraft is a professor emeritus of political science and public and environmental affairs at the University of Wisconsin at Green Bay. From Tribune News Service.