A single fix reverses the case for rolling back vehicle emissions standards
Two administrations, the Biden administration and the second Trump administration, reached opposite conclusions about whether vehicle emissions standards should be rolled back. These conclusions came from different assumptions, including whether avoiding air pollution has value to society and the degree to which car buyers value future fuel savings from getting a more efficient vehicle. Both…
The Biden administration's decision to roll back vehicle emissions standards has been met with criticism, with a new analysis in Science suggesting that the calculation behind the move may be incorrect. The analysis, co-authored by Kenneth Gillingham and nine other economists, highlights the discrepancy in assumptions made by the Trump administration's cost-benefit analysis.
While the Trump administration concluded that Americans would be better off without the standards, assigning a zero value to avoided air pollution, Gillingham and his co-authors argue that this assumption is incorrect. They point out that assigning the value gap between immediate and future fuel savings to inattention by consumers is too simplistic, as it fails to account for hidden costs due to attribute trade-offs.
By correcting these assumptions, the analysis suggests that the rollback of emissions standards could actually lead to a net cost of $600 billion to $790 billion for Americans.
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