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Auto Industry Advocates Cook the Books on Vehicle Standards

By Climate Guest Contributor on June 17, 2011 at 7:31 am

"Auto Industry Advocates Cook the Books on Vehicle Standards"

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by David Friedman, Union of Concerned Scientists

It has been said that “the definition of insanity is doing the same thing over and over and expecting different results.”

That observation holds true for the latest version of a Center for Automotive Research (CAR) report on fuel efficiency and global warming pollution standards, which came out this week, saying new vehicle efficiency standards could destroy up to 260,000 jobs in the auto industry. It contains many of the same or similar flaws found in the first version the center issued last year, and yet CAR somehow expects to be taken seriously when it again claims that reducing the amount of gas we guzzle will hurt—not help—the auto industry and consumers.

Like the original, the revised analysis ignores basic facts and cherry-picks assumptions to support its conclusion. We would file this in the bin marked for “garbage in, garbage out” methodology if the analysis were going to sit on a shelf, but the auto industry has been citing CAR’s shoddy work to lobby against strong fuel efficiency and auto pollution standards being developed by the Obama administration and the state of California.

The auto industry’s “problem” with those standards is that the administration and California’s preliminary analysis found that the strongest standards they are considering would save consumers thousands of dollars, cut millions of tons of global warming pollution , and dramatically reduce U.S. oil dependence. The Union of Concerned Scientists’ (UCS) own analysis came to the same conclusion as the administration.

What did CAR do when faced with such overwhelming evidence? It ignored it.

CAR’s original version, which it issued in December 2010, was riddled with errors and false assumptions. Based on an International Council on Clean Transportation (ICCT) analysis, for example, the analysis misused data and made basic technical and mathematical errors. As a result, the ICCT found that these errors “overstate increases in average vehicle cost and systematically underestimate fuel savings.”

“If CAR had used a more credible analytical approach and representative estimates for technology and cost,” ICCT concluded, “it would have reached exactly opposite projections: positive impacts on industry and growth in U.S. automobile sales, production, and employment.”

The updated version, released on June 13, features several of the same or similar basic mistakes and assumptions to support automaker arguments against stronger fuel efficiency and global warming pollution standards.

According to CAR’s latest analysis, the highest standard under consideration for new vehicles—a 6 percent annual reduction in greenhouse gas emissions from 2017 through 2025, resulting in a fuel economy standard of 56 miles per gallon (mpg)—would not save car owners enough money on gasoline in the first five years of ownership to cover CAR’s inflated vehicle costs. CAR says that would encourage consumers to hold on to their older cars, which would mean fewer jobs in the auto industry.

That is the same kind of tired argument the auto industry made when Congress first set fuel efficiency standards after the 1973 oil embargo.

In fact, correcting only the most significant CAR errors and cherry-picked assumptions in the 6 percent case shows that new car drivers would enjoy a net savings within five years of buying a new car. That actually would encourage them to replace their old cars more quickly, which would generate more auto industry jobs.

How far off is CAR’s most recent study? It overstated the cost of fuel saving technology by more than $8,500 and understated potential fuel savings by $2,100 to $3,800.

The most blatant flaws in the updated CAR analysis include:

Flaw Impact (2025 dollars)
Ignores the difference between fuel economy and greenhouse gas standards and the ability to comply with the latter in part by reducing the leakage of and potency of refrigerants used in air-conditioning systems. $4,100 cost overestimate
Forces greenhouse gas and fuel economy regulations to bear the cost of safety improvements that would be required under separate safety regulations. $2,100 cost overestimate
Assumes significantly inflated costs for high-strength materials that cut weight while protecting occupants. $1,100 cost overestimate
Assumes padded automaker profits instead of competitively priced vehicles. $1,200 cost over estimate
Assumes vehicle owners will drive less than they do today and 29 percent less over the first five years of ownership than the Department of Transportation predicts for 2025. $2,100-$3,800 savings underestimate(low and high gas price scenarios)

Ignoring the flaws, the report’s language reveals a biased position against stronger vehicles standards. For example, the CAR study:

  • Accuses the National Highway Traffic Safety Administration (NHTSA) of “overruling” Congress;
  • Calls standards “extreme” and a “tax on consumers”; and
  • Charges that alternative approaches to valuing fuel savings were “rashly proposed.”

The only thing that would be more absurd than CAR’s attempt to repackage its past analysis would be for the Obama administration to give it credibility as it deliberates on what standard to set for 2017 to 2025 model year vehicles.

The Obama administration should ignore this industry-advocate-propaganda and focus on setting the strongest vehicle efficiency and global warming pollution standards based on credible scientific analysis.

At a gasoline price of $3.50 per gallon, the typical new vehicle in 2025 that complied with the 6 percent per year reduction in global warming pollution and 56 -mpg average fuel efficiency standard would provide savings of about $7,500 over its lifetime compared with today’s vehicles, according to a UCS analysis. This standard also would cut oil consumption by 2.5 million barrels per day in 2030, almost 50 percent more than the amount we imported from the entire Persian Gulf in 2010, and avoid 3.3 billion metric tons of global warming pollution cumulatively between 2017 and 2030.

Doesn’t sound too crazy, does it?

David Friedman, Deputy Director of the Union of Concerned Scientists’ Clean Vehicles Program

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