Trump Flunks Econ 101 in Auto Mileage Rollback, Researchers Say

(Bloomberg) -- President Donald Trump may boast that he’s a graduate of the prestigious Wharton School at the University of Pennsylvania but a new study questions his administration’s application of basic economics, at least as it concerns vehicle emissions standards.

The study says that the Trump administration’s analysis underpinning its proposal to freeze fuel economy mileage rules at 2020 levels is “misleading” and has significant flaws that undermine its argument for easing the rules.

The agencies erred, according to the study, by concluding that freezing mileage rules in 2020 would result in fewer cars on the road -- to the tune of some six million vehicles.

“This is inconsistent with basic economic principles,” according to the study whose authors were cited throughout the proposal to ease mileage rules.

The U.S. Transportation Department and Environmental Protection Agency estimated that freezing mileage rules in 2020 would save roughly 1,000 lives a year by reducing the cost of cars, allowing more people to buy new, safer models, a key source of the societal benefits underpinning the push for weaker standards.

Instead, the researchers said, “economic theory predicts” that tougher standards would reduce the fleet over time, not the other way around.

“It’s a massive mistake,” said Antonio Bento, a professor of public policy and economics at the University of Southern California Sol Price School of Public Policy, and the study’s lead author. “In other words, the safety impact of the rollback would actually be to reduce safety, because with the rollback, the total number of vehicles in the fleet would likely be higher.”

Correcting the smaller fleet estimate would likely eliminate $90.7 billion in societal benefits linked to fewer fatalities and property damage claims, the authors found.

“These independent researchers are demonstrating what we’ve long suspected: the Trump administration used every trick it could to try and justify its plan to halt progress on tailpipe pollution,” Luke Tonachel, clean vehicles director at the Natural Resources Defense Council, said in a statement.

The EPA and Transportation Department are reviewing comments as they evaluate whether to finalize the rule. The Trump administration has also proposed revoking California’s authority to regulate greenhouse gas emissions from vehicle tailpipes. The state currently has rules in place through 2025, and has vowed to defend its pollution-fighting powers in court, setting up a legal battle between Washington and Sacramento if a compromise can’t be reached.

EPA and Transportation Department didn’t immediately respond to a request for comment.

Federal officials are in talks with California regulators on whether nationwide standards can be maintained, but it’s unclear if progress has been made.

©2018 Bloomberg L.P.