December 21, 2019 9:22AM

The Autobahn to Car Consumer Hell Is Paved with the Best Intentions

After bailing out two of the “Big 3” Detroit automakers, President Obama called in his markers during the summer of 2011. That’s when his administration announced an agreement with major car manufacturers to increase federal fuel economy standards to 54.5 miles per gallon (MPG) by 2025.

At the time, fleet averages (including cars and light‐​duty trucks) were about 27 MPG; doubling that figure in 14 years was a tall order requiring technological breakthroughs that might or might not happen.

Accordingly, the 2011 agreement included an escape hatch. The plan stipulated for a “mid‐​term review” process, by which regulatory agencies could revisit their fuel efficiency targets and change course if necessary.

Under the agreement’s terms, the mid‐​term review was due by April of 2018. All the parties to the original accord understood that the mid‐​term review would entail a process that unfolded up to the 2018 deadline in order to best inform the final decision with the latest data.

If Hillary Clinton had won in 2016, the process would have occurred as initially expected. But then Trump won, and the Obama administration scrambled to finish a mid‐​term review during the outgoing president’s lame‐​duck session.

After a six‐​week rulemaking conducted with breakneck speed, Obama’s agencies completed their mid‐​term review with only eight days to spare before Trump occupied the White House. To no one’s surprise, the Obama administration affirmed its original 54.5 MPG (by 2025) target.

About a month after President Trump took office, his administration announced it would reconsider Obama’s lame‐​duck determination. Ultimately, the Trump administration proposed to freeze the fuel efficiency standards at their 2021 targets through 2025. That proposal, however, has yet to be finalized. When it is made final, it will be challenged in court by progressive state attorneys general and environmental groups.

With this context in mind, let’s turn to Europe, which has more stringent fuel efficiency standards than we do. To be precise, the European Union regulates tailpipe emissions of greenhouse gases, the control of which is effectively coterminous with the regulation of fuel efficiency.

Current regulations for the EU translate to fuel efficiency standards that are roughly commensurate with what the Obama‐​era standards would have required by 2023, based on my eyeball approximation of this New York Times chart comparing the two regimes.

So, how’s that working out for Europeans?

Not well, according to last Thursday’s fascinating Big Read in the Financial Times by Peter Campbell. The sub‐​headline says it all: “rather than embrace the new technology, consumers seem more interested in larger, petrol‐​fueled cars.”

The article starts with a charming story about how the European Union’s regulatory framework affected a recent automobile purchase in Spain:

When Blas Arambilet tried to buy an electric car in April, something strange happened.

Months after ordering a white Kia e‑Niro from his local Barcelona showroom, he received a call from the dealership. Kia could not deliver the car this year, a salesman explained, because it needed to book the sale in 2020 in order to help meet tough new targets for [fuel economy].

In sum, car companies are delaying delivery of their least polluting cars, and their purpose is to game compliance with the European Union’s fuel economy regulations. Perversely, emissions‐​conscious consumers — the very buyers whom the EU’s fuel efficiency rules are supposed to favor — are the first to feel the unintended consequences.

But it’s not just environmental‐​minded buyers who stand to lose out. According to the Financial Times, sports car enthusiasts might be denied their need for speed:

[Daimler] is expected by many dealers to cut production of its most polluting models. In its crosshairs is the Mercedes AMG range, its highest specification models that have supercar acceleration and the body of a family saloon. A reduction of 75 percent in the availability of some [of these] models … is expected by several retail executives … 

More broadly, the general car‐​buying public is in for a bumpy ride. Per the FT:

“There is going to be an imbalance between what consumers want and what manufacturers want to sell them,” say Robert Forrester, chief executive of the dealership group Vertu … [V]anishingly few buyers are turning to electric cars … [they’re instead] switching to heavier sports utility vehicles.

For their part, carmakers are playing a dangerous game of chicken with regulators. The FT reports that manufacturers would be on the hook for $27 billion in fines were they to sell the same mix in 2021 as they did last year.

In an understatement, one anonymous industry insider told the newspaper that “the regulation is not aligned with what is happening in the market.”

Inconvenient delivery dates for super fuel‐​efficient cars are merely the first mile of a long and uncomfortable road trip, but what’s the destination? A dramatic and government‐​imposed scarcity of what the Financial Times calls “American‐​style SUVs” — that is, the cars that buyers want — seems likely unless either consumer preferences or EU regulators pull a u‑turn. 

Because these “American‐​style SUVs” engender higher profit margins, they are essential to many automakers’ bottom lines. To the extent manufacturers are not permitted to sell these “gas guzzlers,” there will be pileups in the sector, in the short term at the very least, as the industry is compelled to change lanes to a new business model.

The upshot is that consumers and automakers will be left in the dust if EU regulators keep their pedal to the metal with fuel efficiency requirements that remain grossly out of “alignment” with what buyers want. Could it happen here? 

June 10, 2019 9:17AM

EPA Co‐​benefits Are Fine, But the Agency Must Tell the Whole Story

Should you be worried about mercury emitted from power plants?

Sure, but only if you are a pregnant woman, who during gestation consumes about 220 pounds of fish caught from exclusively the top ten percent most polluted fresh waters of the United States, despite all the signs along these rivers and lakes warning “DO NOT EAT THE FISH!

Don’t take my word for it. I’m simply relaying EPA science. And not the ‘bad” kind produced by the Trump administration; rather, I’m talking about virtuous EPA science as practiced by the Obama administration.

A little background: mercury emissions aren’t a direct threat to humans, but instead settle onto water bodies, and then make their way up the aquatic food chain. Because mercury is a neurotoxin, the fear is that pregnant women can engender developmental disorders in their offspring by eating fish that have bio-accumulated the toxin.

In the course of promulgating the Obama-era Mercury and Air Toxics Standards for power plants, the EPA stated that it considers “IQ loss estimates of 1-2 points as being clearly of public health significance,” even though this low a number rests comfortably within the error of measurement inherent to an IQ test. According to the EPA’s analysis, the Mercury Rule was necessary to prevent an IQ loss of 1.1 points supposedly suffered by children born to a putative population of pregnant women from substance families, who during their pregnancies eat 220 pounds of self-caught fish reeled in from the most polluted bodies of fresh water. Notably, the EPA failed to identify a single member of this supposed population. Instead, these women were modeled to exist.

Even under EPA’s ultra-accommodating analysis of its rules’ benefits, the agency pegged the benefits of the Mercury Rule at a mere $6 million. In stark contrast, the agency estimated that the rule would cost about $10 billion annually, making it one of the most expensive regulations ever.

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July 11, 2018 5:12PM

Climate Change: What Would Kavanaugh Do?

In a 2012 dissent from a District of Columbia Appellate Court opinion, Supreme Court nominee Brett Kavanaugh acknowledged that “dealing with global warming is urgent and important” but that any sweeping regulatory program would require an act of Congress:

But as in so many cases, the question here is: Who Decides? The short answer is that Congress (with the President) sets the policy through statutes, agencies implement that policy within statutory limits, and courts in justiciable cases ensure that agencies stay within the statutory limits set by Congress.

Here he sounds much like the late justice Antonin Scalia, speaking for the majority in the 2014 case Utility Air Regulatory Group v. EPA:

When an agency claims to discover in a long‐​extant statute an unheralded power to regulate “a significant portion of the American economy” we [the Court] typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign to an agency decisions of vast “economic and political significance.”

Scalia held this opinion so strongly that, in his last public judicial act, he wrote the order (passed 5 – 4) to stay the Obama Administration’s sweeping “Clean Power Plan.” Such actions occur when it appears the court is likely to vote in a similar fashion in a related case.

This all devolves to the 2007 landmark ruling, 5 – 4, in Massachusetts v. EPA, that the EPA indeed was empowered by the 1990 Clean Air Act Amendments to regulate emissions of carbon dioxide if the agency found that they endangered human health and welfare (which they subsequently did, in 2009). Justice Kennedy, Kavanaugh’s predecessor, voted with the majority.

Will Kavanaugh have a chance to reverse that vote? That depends on what the new Acting Administrator of the EPA plans to do about carbon dioxide emissions. If the agency simply stops any regulation of carbon dioxide, there will surely be some type of petition to compel the agency to continue regulation because of the 2009 endangerment finding. Alternatively, those already opposed to it might petition based upon the notion that the science has changed markedly since 2009, with increasing evidence that the computer models that were the sole basis for the finding have demonstrably overestimated warming in the current era. It’s also possible that Congress could compel EPA to reconsider its finding, and that a watered‐​down version might find itself at the center of a court‐​adjudicated policy fight.

Whatever happens, though, it is clear that Brett Kavanaugh clearly prefers Congressional statutes to agency fiat. Assuming that he is confirmed, he will surely exert his presence and preferences on the Court, including that global warming is “urgent and important,” but it is the job of Congress to define the regulatory statutes.

March 2, 2017 2:27PM

How Does One Justify One of the Most Expensive Regulations in American History?

In an effort to justify its massive global warming regulations, the Obama Administration had to estimate how much global warming would cost, and therefore how much money their plans would “save.” This is called the “social cost of carbon” (SCC). Calculating the SCC requires knowledge of how much it will warm as well as the net effects of that warming. Needless to say, the more it warms, the more it costs, justifying the greatest regulations. 

Obviously this is a gargantuan task requiring expertise a large number of agencies and cabinet departments. Consequently, the Administration cobbled a large “Interagency Working Group” (IWG) that ran three combination climate and economic models. A reliable cost estimate requires a confident understanding of both future climate and economic conditions. The Obama Administration decided it could calculate this to the year 2300, a complete fantasy when it comes to the way the world produces and consumes energy. It’s an easy demonstration that we have a hard enough time getting the next 15 years right, let alone the next 300.

Consider the case of domestic natural gas. In 2001, everyone knew that we were running out. A person who opined that we actually would soon be able to exploit hundreds of years’ worth, simply by smashing rocks underlying vast areas of the country, would have been laughed out of polite company. But the previous Administration thought it could tell us the energy technology of 2300. As a thought experiment, could anyone in 1717 foresee cars (maybe), nuclear fission (nope), or the internet (never)? 

On the climate side alone, there’s obviously some range of expected warming, often expressed as the probabilities surrounding some “equilibrium climate sensitivity” (ECS), or the mean amount of warming ultimately predicted for a doubling of atmospheric carbon dioxide. In the UN’s last (2013) climate compendium, their 100+ computer runs calculated an average of 3.2°C (5.8°F). A rough rule of thumb would be that this is also an estimate of the total temperature change predicted from the late 20th century to the year 2100.

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December 30, 2016 11:11AM

You Ought to Have a Look: Panic Among Alarmists

You Ought to Have a Look is a regular feature from the Center for the Study of Science. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.


As the time towards Trump’s inauguration closes, panic mounts in the climate change-agenda community as evinced by their hyperventilation about what a Trump Administration might unleash on President Obama’s Climate Action Plan. This includes ventilation about blocking access to climate data, data manipulation, investigating climate scientists, squashing dissent, selective science, end runs around Congressional intent, etc...sort of like a catalog of what they have been doing since climate change went prime time in 1988.

Many of these bloviations are completely unfounded—for example, a particular favorite of the press during recent weeks has been that “Scientists [are] Rac[ing] To Preserve Climate Change Data Before Trump Takes Office.” This is nonsense—despite the hand-wringing and (faux) concern raised by some folks. And while we, like everyone else should be, are opposed to deleting government datasets (paid for with our tax dollars), there is simply no evidence that such an action is in the works or even being contemplated.

Many of the other fears are overblown as well, but there are, in fact, some things that should bother climate campaigners (and no one else). These include efforts to retract the Clean Power Plan, to eliminate the use of the social cost of carbon as currently constituted in federal cost/benefit analyses, and acknowledgement the current generation of climate models has no utility with regard to policy.

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November 11, 2016 5:36PM

Some Climate Realities for the Incoming Administration to Consider

While the twitterverse is chirping with concern over Donald Trump’s handling of the global warming science, we offer a few realities that should be key parts of any transitional team’s synthesis.

1. Carbon dioxide is a greenhouse gas that by itself will result in a slight warming of the lower atmosphere and surface temperatures, as well as a cooling of the stratosphere.

     a. All of these have been observed.

 2. Additional warming is provided by a complicated feedback with water vapor. If it were large and positive, so would be future warming.

     a. The observed warming is far below values consistent with a high temperature sensitivity. Therefore future warming will run considerably below any high-sensitivity estimate.

     b. The disparity between observed and forecast warming continues to grow.

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November 11, 2016 5:33PM

You Ought to Have a Look: Advice for Trump’s Transition Team

You Ought to Have a Look is a regular feature from the Center for the Study of Science. While this section will feature all of the areas of interest that we are emphasizing, the prominence of the climate issue is driving a tremendous amount of web traffic. Here we post a few of the best in recent days, along with our color commentary.

In this You Ought to Have a Look, we hope that some of the “You” are members of, or influencers of, President‐​elect Trump’s transition teams.

With so much talk about the Trump’s plans on killing the Clean Power Plan, withdrawing from the Paris Climate Agreement, reversing the Keystone XL pipeline rejection, removing energy subsidies and reigning in the EPA (all good ideas in our opinion), we want to make sure the transition team doesn’t overlook other, invasive, burdensome, costly, and climatologically‐​meaningless regulations that were put in place in President Obama’s Climate Action Plan.

Here’s a rundown of some of the more significant of them.

Energy Efficiency Regulations from the Department of Energy. 

The DoE and put forth a seemingly endless string of regulations governing the energy efficiency of all manner of power‐​consuming appliances large and small, from industrial boilers and refrigeration systems, to microwave ovens, and ceiling fans (and most things in between). The reason?

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We have repeatedly submitted public comments as to why the climate change angle should be a non‐​starter (our latest in this long line is here). But besides that, the DoE standards result in appliances that work less well, cost more, and reduce consumer choice. Our big brother government thinks it’s doing us all a favor because we aren’t savvy enough to value long‐​term cost saving from energy consumption over other values. Not everyone agrees. Sofie Miller, senior policy analyst at the George Washington University Regulatory Studies Center, recently wrote:

This line of reasoning overlooks the possibility that consumers may have legitimate preferences for less‐​efficient appliances based on household characteristics or other observable product qualities (such as size, durability, reliability, or noise level). Also, the assumptions underpinning the DOE’s analyses may not be accurate; for instance, some consumers may have high discount rates, making future energy savings less important than immediate purchase savings. By regulating away the option for consumers to purchase less efficient appliances, the DOE claims to be improving consumers’ choice structure by removing choices. These rules aren’t technology‐​forcing, they’re consumer‐​forcing.

…the fact that consumers choose not to purchase efficient appliances indicates only that they do not value these attributes as much as the DOE does. As a result, these rules impose huge net costs on consumers, rather than benefits.

Yet the DoE has a lot more of these efficiency standard regulations in the offing (the public comment period is currently open for two more proposed regulations — governing walk‐​in refrigerators and residential furnaces).

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