WTF! Eventual costs of $11 billion to enforce something that doesn't work and they admit this in writing? How are you supposed to pump out the proper narrative when one of your underlings tells the truth in writing? I hope they fire that bastard.
Shocking Candor on Fuel Standards
Bureaucrats admit that ‘net benefits for passenger cars remain negative.’
By Michael Buschbacher and James Conde
Aug. 23, 2023 5:56 pm ET
For decades, bureaucrats in Washington have argued that fuel-economy mandates pay for themselves. Billions of dollars in upfront investments now, they say, are well worth the money drivers will save over their cars’ lifetimes. And because the mandates reduce carbon emissions too, it’s a win-win for environmentalists and drivers. Better than a free lunch.
That gig is up. Reality has finally made it impossible to churn out such self-aggrandizing propaganda with a straight face. But we didn’t actually expect bureaucrats to say the quiet part out loud.
We read the Transportation Department’s newly proposed fuel economy regulations so you don’t have to. Buried deep on page 56,342 of volume 88 of the Federal Register, the agency makes this concession about its latest proposed rules: “Net benefits for passenger cars remain negative across alternatives.” In plain English, this means that mandating ever-more-stringent fuel economy for passenger cars will harm society.
How much? The department estimates that its plan of increasing passenger-car standards by 2% each year will reduce private welfare by $5.8 billion over the life of the cars. After accounting for alleged social benefits, such as reduced climate-change damages in foreign countries, the standard reduces total public welfare by $5.1 billion. You should be relieved, though: The other “alternatives” the Transportation Department is considering would have net costs of about $11 billion, so bureaucrats tell us they are exercising admirable self-restraint.
By Washington standards, such candor is admirable. A former White House regulatory czar we spoke to couldn’t recall a proposal conceding that it would impose such enormous costs on society.
But this is Washington, so even this candor is too rosy. The predictions are full of gimmicky assumptions designed to understate costs. As Table V-6 shows, the Transportation Department assumes that investing in fuel economy somehow has no opportunity costs. This flunks basic economics and engineering. To improve fuel economy, carmakers sacrifice other improvements drivers like, such as towing capacity, safety features, trunk space, acceleration and even the increasingly rare spare tire (cut to reduce weight and cost, of course). They also add features consumers hate—such as stop-start systems. But modeling these trade-offs is hard, so the department’s pseudo-economists pretend the trade-offs don’t exist, as the proposal explains in footnote 187.
Simply put, the Transportation Department bureaucrats have no real basis for claiming they make better choices than drivers and fleet managers. They literally are making it up. But unlike in previous rulemakings, the costs are now so comically high that regulators can no longer pretend that mandating greater fuel economy for passenger cars is good for society.
The job of the White House Office of Information and Regulatory Affairs is to stop regulatory proposals that would harm society, so this proposal should never have seen the light of day. But the proposed rule says this White House’s not-so-secret password: climate change.
What about it? Without a hint of sarcasm, page 5-39 of the department’s accompanying environmental assessment estimates that in 2060 the proposal would reduce average global temperatures by 0.000%. The modeled effect is so trivial that the bean counters ran out of decimals in their spreadsheets. Chinese Communist Party officials must be reading our wonderful environmental assessments for comic relief as they ramp up coal production.
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Mr. Buschbacher is a partner at the law firm Boyden Gray PLLC and served in the Justice Department’s Environment Division (2020-21). Mr. Conde is counsel at Boyden Gray PLLC.
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