Economist Mike Walden: The Debate over Fuel Standards

The Trump Administration wants to modify required improvements in fuel standards followed by manufacturers by making them less stringent.   This has sparked a debate over the costs and benefits of higher miles per hour requirements for vehicles.  Give us an outline of the arguments.

  1. Administration makes three points for rolling back the requirements
  2. Higher mph standards encourage more driving, which leads to more deaths
  3. Higher standards increase vehicle costs, causing drivers to take longer to replace older vehicles with safer new vehicles
  4. Last, higher standards will cause manufacturers to lower the weight of vehicles, which make them less safe
  5. Opponents say higher mph do cause people to drive more, but not much
  6. Opponents also say the argument about pricier vehicles causing slower replacements is too simplistic – ignore borrowing costs and income effects
  7. Last, on weight, some experts say what is more important for safety is if vehicles are of similar weight – and past mph standards have reduced truck weights most
  8. Debate will continue

The Economic Perspective is an NC State Extension program from the Department of Agricultural and Resource Economics.