EPA Rules on Car Pollution Will Save Americans Trillions of Dollars » Yale Climate Connections

Electric vehicle (EV) sales are increasing in many countries around the world, including the United States. According to the Department of Energy, EVs accounted for just 1% of new car sales in the US in 2017. That share will exceed 3% in 2021 and approach 6% in 2022. Although the US remains well below the global EV share in new car sales, which exceeded 14% in 2022, the US market is catching up quickly. According to an analysis of global markets by Bloomberg, a 5% share appears to be the tipping point at which EV sales take off in most countries.

Amidst this rapidly growing adoption of electric vehicles, the Biden administration, in an August 2021 executive order, directed the Environmental Protection Agency to extend its regulations on vehicle tailpipe pollution for vehicle model years 2027 to at least 2030. The EPA’s previous rules, revised at the end of 2021, applied only to model years through 2026. Those rules set the average amount of carbon and other air pollutants that vehicles sold by automakers can emit. spend in a given year on sales.

With sales of electric vehicles on the rise, their prices falling rapidly, and their net pollutant emissions significantly lower than fossil fuel vehicles, the EPA saw an opportunity to issue much stricter regulations on vehicle emissions without creating undue economic burdens associated with the cost of car ownership. Quite the opposite, in fact—in the 758-page proposed rules for vehicle model years 2027-2032, the EPA conservatively estimates that climate, health and vehicle cost savings for Americans will significantly exceed $1 trillion* over the next three decades.

* Note that the expected benefits in this article are present values ​​using a 3% discount rate.

Electric cars will save car owners money

Many automakers have announced aggressive EV sales targets. For example, GM, which has the largest share of the U.S. car sales market, aims for 100% of car sales to be electric vehicles by 2035. If all automakers’ targets are met, electric cars will make up nearly 50% of new US car sales in 2030

In its proposed exhaust rules, the EPA estimates that the US auto market is on track for electric vehicles to account for 30-60% (most likely around 40%) of new car sales in 2030, depending on factors such as the prices of batteries and the cultural acceptance of the technology. The agency estimates that to meet its proposed vehicular pollution rules, automakers would have to reach the upper end of the expected range, with electric vehicles accounting for 60 percent of new car sales in the U.S. in 2030 and 67 percent in 2032

EV share of US new car, SUV, and light truck sales to date (black), in the most likely business-as-usual scenario (gray), and if the EPA’s proposed new vehicle pollution regulations are adopted (green) . Created by Dana Nuccitelli from data in EPA’s proposed new rules.

Until now, sticker prices for EVs have tended to remain higher than their gasoline counterparts, although some EV models are approaching price parity. As a result, the EPA estimates that growing EV adoption will increase the average purchase price of a new vehicle by about $1,000 in the early 2030s. But that doesn’t account for tax credits of up to $7,500 for new EVs included in the Inflation Reduction Act or their fuel savings and maintenance costs.

Based on average U.S. electricity and gasoline prices over the past decade and average vehicle efficiency, it costs about 5 cents per mile to refuel an EV, compared to more than 12 cents per mile for a gasoline-fueled vehicle. For the average American who drives over 14,000 miles per year, the fuel savings for an EV alone will add up to nearly $1,000 per year. And because EVs have far fewer parts that can wear out and break, the EPA estimates that EVs will save car owners more than $1,100 a year in fuel, maintenance and repair costs.

Overall, even when accounting for the cost of installing many more EV charging stations, the EPA estimates that increased EV adoption as a result of the new rules will reduce U.S. vehicle ownership costs by a total of more than $1 trillion over the next three decades.

Electric cars will reduce climate pollution and damage

The EPA’s proposed exhaust rules would require automakers to cut average carbon pollution from cars, SUVs and light trucks by more than half between 2027 and 2032. Automakers’ sales of light-duty vehicles would be able to average no more of 82 grams of carbon dioxide per mile driven in 2032, down from 186 grams per mile in 2026.

chart shows grams of carbon dioxide per mile falling between 2026 and 2032 under a number of similar scenarios
Average carbon dioxide emissions per mile of the light truck fleet under existing rules (dotted line), EPA’s proposed new rules (black line), and three similar EPA alternative proposals (gray lines). Source: EPA’s proposed new rules.

While automakers can meet these carbon pollution standards as they choose, accelerating EV sales is likely to be the primary solution. This is because electric motors are much more energy efficient than petrol internal combustion engines, which lose a lot of energy as waste heat, and because the electricity grid is rapidly decarbonising.

Read: Electrifying transport cuts emissions AND saves huge amounts of energy

The economic benefits of reduced climate damage caused by carbon pollution are assessed using what is known as the ‘social cost of carbon’. An interagency task force is in the process of updating the federal government’s estimate of that number. During the Obama administration, it was estimated at about $51 per ton of carbon dioxide pollution, but recent research incorporating the latest climate science and economics literature puts the value closer to $185 per ton.

Using the $51 per ton figure, the EPA estimated that its proposed vehicle tailpipe rules would result in $330 billion in avoided climate damage globally over the next three decades. But using an updated social cost of carbon would increase that value to about $1 trillion.

Electric cars will reduce air pollution and health care costs

EPA’s proposed rules also limit tailpipe emissions of other air pollutants. They would reduce vehicle emissions of fine particulate matter (often called PM2.5) by more than 95% and emissions of nitrogen oxides and non-methane organic gases by 60% by 2032. As the EPA notes in its proposed rules, “PM2.5 is associated with premature death and serious health outcomes, such as hospital admissions for respiratory and cardiovascular disease, non-fatal heart attacks, worsening asthma and reduced lung function.

As a result, the expected health benefits of reducing these tailpipe air pollutants are significant. The EPA estimates that they will avoid about 1,000 premature deaths over the next three decades and bring health benefits totaling between $140 billion and $280 billion.

Read: The number of lives clean energy could save, by US state

Climate and health modeling expert Drew Schindel of Duke University’s Nicholas School for the Environment described the EPA’s estimates of health benefits as “reasonable and probably too low.”

Shindell can review the proposed new tailpipe regulations as a member of the EPA’s Science Advisory Board, but provided his personal opinion on the rules via email.

In his own research, Shindell included data from a wider range of countries than the EPA thought — the agency focused on studies from the US and Canada. His team’s results suggest that the effects of air pollution may be roughly twice as bad as previously estimated. Shindell also noted that the EPA only includes health effects for which there is clear evidence of a causal effect, but the evidence suggests that air pollution causes significantly more illness and death in ways that are not yet well understood.

“Again, it is a prudent choice on EPA’s part to include only those endpoints for which the data are extremely clear,” Schindel wrote, “but are likely to result in underestimation.”

Finance, climate and health win winners

Adding it all up, the EPA estimates that its rules would save about $1.6 trillion in vehicle costs, climate damage and health impacts between 2027 and 2055. Updating the social cost of carbon would add to those savings to over $2 trillion, and as Shindell noted, the health savings could also be significantly higher than EPA estimates, bringing the total benefits of the rule close to $2.5 trillion.

In short, by accelerating the transition to electric vehicles, the EPA’s new tailpipe pollution rules could benefit Americans’ bank accounts and health while helping to curb the climate crisis.

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