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Using an open-source predictive modeling software, the Energy Policy Simulator, Energy Innovation found that although at first the freeze on emissions standards will lead to household savings since less fuel efficient cars are cheaper, it would ultimately increase costs as less fuel efficient cars also use more fuel. BY 2050, these are estimated at the hefty US$400 billion in 2018 dollars.
Of course, it won’t be just higher costs that will be the problem but also higher emissions with a freeze on standards. According to Energy Innovation, these will increase most in the 2030s, as after that, the company assumes EV sales will increase considerably, reducing the market share of cars with internal combustion engines, fuel efficient or not.
This future is dire but, in all fairness, it is highly uncertain it will pan out. For starters, carmakers themselves are not on board with the administration’s proposal. Four major companies—Ford, Volkswagen, Honda, and BMW—struck a deal with California regarding stricter fuel efficiency requirements last month, and they did it in secret as Washington is seeking to strip the nation’s biggest car market of the right to set its own rules.
Others might follow suit, not just with California but with raising their fuel efficiency standards amid changing public perceptions of what is acceptable in emissions and what isn’t. That’s despite an effort by the administration to motivate laxer fuel efficiency rules by suspending an Obama-era rule regarding penalties for excess fuel consumption.
Under the original rule, the companies making cars consuming more fuel than allowed under the emissions standards, would have to pay up to US$14 for every 0.1 mile per gallon of excessive fuel consumption. That, the industry calculated at the time, would cost it US$1 billion annually. Now, Trump plans to do away with those penalties and keep them at the current, much more modest level of US$5.50 for 0.1 mile per gallon.
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