In two recent posts (here and here), I examined EPA’s and the National Highway Traffic Safety Administration’s (NHTSA’s) rationale for establishing first-ever fuel-economy standards for trucks. Today’s post provides additional evidence that what the agencies call the trucking industry’s “under-investment” in fuel-saving technology is an unintended (although not unforseen) consequence of EPA’s ever-tightening diesel-engine emission standards. The declining fuel economy of 18-wheelers is a case of government failure, not market failure. Conveniently, EPA’s role in holding back heavy-truck fuel economy is never discussed in the agencies’ proposed rule.
The trucking industry is highly competitive, profit-margins are thin, and fuel is the single biggest operating expense. Consequently, truckers, especially those who haul freight long distances in “combination tractors” (semis), have a strong incentive to purchase vehicles incorporating cost-effective improvements in fuel economy. …
Next year, Republicans will be the majority party in the House of Representatives, which means they’ll hold the committee chairmanships and run the hearings. They’ll have opportunities aplenty to review the Obama administration’s global warming policies and the alarmist “science” that supposedly justifies cap-and-trade, renewable energy mandates, and EPA regulation of greenhouse gases.
They would do well to study how in the 105th and 106th Congresses, a GOP House committee chairman from Missouri single handedly debunked the Clinton-Gore administration’s economic analysis of the Kyoto Protocol.
Kyotoism: Down but Not Yet Out
Politically, the last eighteen months have been remarkable. In June 2009, the House passed H.R. 2454, the “American Clean Energy and Security Act,” popularly known as the Waxman-Markey cap-and-trade bill. Waxman-Markey’s passage was the culmination of a 20-year PR/lobbying campaign waged by U.N.…
Last week the U.S. Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) issued a proposed rule to establish first-ever greenhouse gas (GHG) emission and fuel economy standards for “heavy duty” (HD) motor vehicles.
The proposed standards, which phase in during model-years 2014–2018, apply to three types of HD vehicles: (1) “combination tractors” (semi-trucks), (2) large pickups and vans, and (3) “vocational trucks” (a wide-ranging assortment of trucks and buses). The agencies estimate that the technologies needed to comply with the proposed standards will cost $7.7 billion but that the rule will generate $27 billion or $41 billion in net benefits (depending on whether future benefits are discounted at 7% or 3%).
Here’s the curious thing that jumps out at you from the getgo. Although the ostensible objective of the rule is to reduce GHG emissions and oil imports, the overwhelming share of the claimed benefits (fuel savings for truckers) has nothing to do with either climate change or energy security.…