On December 13, the Supreme Court allowed several petrochemical and alternative fuel companies to receive “standing” to challenge the California Air Resources Board’s (CARB) ability to obtain a waiver from the Environmental Protection Agency (EPA) to enact stringent greenhouse gas standards. The waiver would allow CARB to force automakers to zero out the sale of gasoline-powered “light duty” cars, trucks, and SUVs in California starting in model year 2035.

The outcome is moot, for now. President-elect Trump will almost certainly withdraw the waiver. However, a future Democrat president almost certainly will grant the waiver if the Supreme Court rules against the plaintiffs, just as President Biden did on December 18. What’s at issue is CARB’s “ACC II,” all-electric, zero emissions vehicle (ZEV) mandate for the sale of light duty vehicles. CARB would be joined by 11 blue states, altogether currently accounting for 30 percent of national automobile sales.

The mandate would not reduce global greenhouse gas emissions because the national standards would remain in place, a standard the Biden EPA has on course to be the equivalent of 41 mpg by that time. Of course, CARB hopes to lead by example, encouraging a future Democrat administration to adopt its mandate. 

But that would mean more, not fewer, carbon dioxide emissions for California and the nation if the EPA were to adopt it as its own. It would make the air dirtier and forestall important advances in vehicle safety. Better to dispense with the regulations altogether and leave consumers free to choose the vehicles that best suit their needs.

That’s partly because stringent fuel economy mandates add thousands of dollars to the cost of a new vehicle, which encourages potential buyers to hold on to their older, more fuel-consuming vehicles. This is what economists call the Gruenspecht effect, named after Howard Gruenspecht, the former head of the nonpartisan Energy Information Administration (EIA).

It’s also because less fuel-consuming vehicles lower the cost of each mile driven, incentivizing their owners to put more miles on them than on the more fuel-intensive vehicles they’ve been driving, a phenomenon economists call the rebound effect.

In a subsequent study titled “Zero Emissions Vehicles: A Dirty Little Secret,” Gruenspecht found that EV mandates “increase rather than reduce emissions while imposing substantial costs on California consumers,” and that “even a small increase in their use will generate extra emissions that will more than offset emissions reductions from ZEVs.”

The higher EV costs would force many consumers to go without the latest driver assistance systems, not to mention the performance, carrying capacity, driving range, and numerous other features that they can afford in a lower-priced gasoline-powered vehicle. The Biden mandates already add nearly $200 billion a year to the cost of federal regulation, thirty percent of the aggregate.

Suppose instead that CARB would be unable to persuade a future Democrat-led EPA to go all electric in 2035, a mandate the Biden EPA rejected, instead favoring a 41-mpg mandate for that year. CARB’s ZEV mandate would mean the auto companies would be free to sell vehicles averaging 33.6 mpg in the other 39 states, mostly red states, if the 2035 vehicles averaged the EPA-rated 85-mpg that the highest mileage Rivian SUVs and pickup trucks currently achieve.

The mostly red state mandated averages would fall to 32.2-mpg per vehicle were the mandate set at the 115-mpg for the standard size Audi electric SUV. The current new-vehicle mandate is 27-mpg. (The fuel economy standards are set according to a “harmonic average” of gallons per mile instead of an arithmetic average of miles per gallon.)

Under either scenario, the costs and (lack of) benefits of the California, not to mention federal mandate, would become plain for everyone to see. CARB’s “win” might become a win for everyone everywhere. CARB and a Democrat-led EPA could no longer get away with cost/benefit analyses that assume ignorant and stupid auto buyers can’t figure out what’s best for themselves.

The air would be cleaner, cars would be safer, and people would have more money to spend on the features that are best for them, best for the economy, and best for the environment. Everyone would come out a winner.

Perhaps we should hope CARB gets its way after all.

Tom Walton is a Heartland Institute Policy Adviser and was General Motors Director of Economic Policy Analysis before retiring in 2008.

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