Fuel stan­dards law­suit is about pol­i­tics, not con­sumers

The Oklahoman (Sunday) - - OPINION -

LIB­ERAL politi­cians in five states are su­ing be­cause the Trump ad­min­is­tra­tion isn’t do­ing enough to in­crease the price con­sumers pay for cer­tain ve­hi­cles. That’s not how they phrase their ar­gu­ment, of course, but it’s their tacit mes­sage.

Of­fi­cials in New York, Cal­i­for­nia, Ver­mont, Mary­land and Penn­syl­va­nia ar­gue that the fed­eral gov­ern­ment must im­pose higher penal­ties for au­tomak­ers that don’t meet fed­eral fuel econ­omy stan­dards.

Last year, un­der the Obama ad­min­is­tra­tion, the U.S. De­part­ment of Trans­porta­tion more than dou­bled civil penal­ties for fuel econ­omy vi­o­la­tions. That ap­peared ex­ces­sive be­cause Congress had or­dered agen­cies to ad­just their fines only for in­fla­tion. Given that in­fla­tion has been rel­a­tively low for some time, dou­bling a fine seems out of line with the di­rec­tive given to the de­part­ment.

Un­der the agency’s new fine sys­tem, au­tomak­ers would have paid $14 for ev­ery tenth of a mile per gal­lon of fuel a ve­hi­cle con­sumes over its min­i­mum fuel econ­omy, mul­ti­plied by the num­ber of ve­hi­cles sold. Au­tomak­ers said the change would cost $1 bil­lion an­nu­ally.

Two points are worth noth­ing here. First, the cars that vi­o­late fed­eral fuel stan­dards wouldn’t be sell­ing if con­sumers didn’t want them. Many peo­ple have valid rea­sons for trad­ing off lower mileage in ex­change for some other ben­e­fit, such as in­creased pas­sen­ger space or safety. Sec­ond, the ex­tra $1 bil­lion is not re­ally paid by au­tomak­ers. It’s paid by con­sumers who buy the cars.

The Trump ad­min­is­tra­tion has since de­layed the rule, say­ing the agency failed to con­sider the cost to au­tomak­ers.

The five afore­men­tioned states sued to force the fines to take ef­fect re­gard­less. New York At­tor­ney Gen­eral Eric Sch­nei­der­man de­clared, “Fuel ef­fi­ciency stan­dards are com­mon sense, pro­tect­ing Amer­i­cans’ pock­et­books and re­duc­ing the emis­sions that un­der­mine public health and drive cli­mate change.”

The courts will de­ter­mine if Sch­nei­der­man’s le­gal ar­gu­ment is sound or not, but his logic re­gard­ing fuel econ­omy stan­dards is cer­tainly faulty.

As we noted, the fines he’s seek­ing would ul­ti­mately raise the price of some ve­hi­cles, which is hardly “pro­tect­ing Amer­i­cans’ pock­et­books.” But even if the fines lead au­tomak­ers to stop sell­ing such ve­hi­cles and in­stead sell higher-mileage cars, Sch­nei­der­man’s logic is still ques­tion­able.

In a 2009 pa­per, Yizao Liu, a pro­fes­sor whose re­search em­phases in­clude en­ergy eco­nomics, summed up the mat­ter sim­ply. “When ve­hi­cles be­come more fuel-ef­fi­cient, the cost of driv­ing is lower, thereby pro­vid­ing an in­cen­tive to drive more and longer, which may ac­tu­ally in­crease to­tal fuel con­sump­tion,” she wrote.

That state­ment isn’t con­tro­ver­sial among those who have stud­ied the is­sue se­ri­ously, a group that ad­mit­tedly won’t in­clude many politi­cians. Put sim­ply, con­sumer sav­ings from higher-mileage ve­hi­cles are at least partly off­set by in­creased driv­ing that also negates associated re­duc­tions in emis­sions.

It’s also con­ceded that higher fuel econ­omy stan­dards re­quire au­tomak­ers to use tech­nolo­gies that in­crease the price to car buy­ers, an­other hit for con­sumers.

So Sch­nei­der­man and his fel­low lit­i­gants aren’t fil­ing a law­suit to ben­e­fit con­sumers, nor are they su­ing to ben­e­fit the en­vi­ron­ment. They’re su­ing in or­der to preen for the me­dia and make an empty po­lit­i­cal state­ment.

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