Making Sense of the Trump Administration's Fuel Economy Standard Rollback

DESCRIPTION: On April 2, 2018, the US Environmental Protection Agency (EPA) announced that planned fuel economy increases for model year 2022–2025 cars and light trucks are too stringent and should be revised.[1] The EPA thus initiated a process to set new standards for 2022–2025, in partnership with the National Highway Transportation Safety Administration (NHTSA).

Although the agencies may eventually ease fuel economy standards less than a full rollback of the standards to 2021 levels would imply, for illustrative purposes we assess the implications of a full rollback for gasoline consumption, oil imports, and carbon emissions. Given that the agencies’ 2016 analysis suggests that a full rollback would harm society on balance, we discuss which changes to the 2016 analysis might lead the agencies to conclude that a rollback benefits society.