Dr. Nicholas Reksten is an environmental economist at the University of Redlands who can speak with authority about the economic impact of the Trump Administration's new fuel economy standards.
"There is simply no way to justify the administration's new fuel economy standards as anything other than a short-term giveaway to the auto industry. While administration officials claim the move will save consumers money, the government's own analysis contradicts that," Reksten says.
"While cars will be somewhat cheaper up-front, consumers will spend more on gasoline over the life of the car. This matches findings by other economists. For example, a 2017 study by David Greene and Jilleah Welch at the University of Tennessee estimated that the average household in the lowest income quintile would save about $509 because of fuel economy standards (4.3% of average income in this group), while the average household in the richest quintile would save about $1,500 (0.9% of average income in this group). Not only have fuel economy standards saved both rich and poor households money, they have proportionately saved poor households more.
"Additionally, we know that less efficient cars pollute more, and poor households are more likely to live near major highways and thus see adverse health effects from mobile source air pollution. The proposed fuel standards are also far behind those in other rich countries. We have ample evidence that carmakers can meet stricter standards when they are required to. This is also supported by the fact that several carmakers have reached a deal with authorities in California to pursue stricter requirements.
"Because there seems to be no real justification for lowering the standards, it seems unlikely that the new rules will survive a court challenge that asserts the move is arbitrary and capricious. Even before that happens, if the next administration is Democratic, the rule change will almost surely be abandoned. I suspect that carmakers know this and will not change their production plans much as they look to the 2020s as a decade of re-tooling factories to make far more electric cars and fewer with internal combustion engines."