This month, the Environmental Protection Agency (EPA) is expected to finalize new emissions standards for cars and light trucks, the latest achievement in the agency’s long history of reducing pollution and protecting public health under the Clean Air Act. Once final, the EPA’s new emissions standards will apply to model years 2027 through 2032 and, depending on the details of the final rule, are likely to deliver up to $280 billion in public health benefits, including reducing premature deaths and asthma attacks, decreasing carbon dioxide emissions by 6,570 to 8,120 million metric tons, saving consumer $680 billion to $870 billion, and driving innovation and technological advancement here in the United States.
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1. The updated pollution standards will provide major public health benefits
The EPA’s vehicle emissions standards have dramatically reduced vehicle pollution for nearly 50 years, contributing to an estimated $2 trillion in environmental and public health benefits. The newest standards, if finalized as proposed, are expected to reduce local pollutant emissions from vehicles by 60 percent relative to current standards, lowering instances of asthma, heart disease, lung cancer, and other health issues; these public health benefits would amount to between $140 billion and $280 billion by 2055.
The updated standards would achieve these health benefits by cutting pollutants such as nitrous oxide, particulate matter, and ozone. Between 2008 and 2017, these harmful tailpipe emissions were responsible for an estimated 17,000 to 20,000 deaths per year, the vast majority from fine particulate matter. Pollutants from fossil fuels have a heavy toll on public health: The American Lung Association estimates that eliminating all emissions from light-duty vehicles and electricity generation would yield public health benefits of $978 billion by 2050.
2. Cleaning up vehicle pollution is critical to slowing climate change
The transportation sector is the country’s largest source of greenhouse gas emissions, accounting for 29 percent of total U.S. emissions in 2021, with light-duty vehicles alone accounting for 17 percent. This means the United States must reduce emissions from cars and light trucks in order to achieve its climate commitment to reach net-zero emissions by 2050, including the near-total decarbonization of the transportation sector. The EPA’s proposed standards would bring the United States significantly closer to this goal, reducing greenhouse gas emissions from light-duty vehicles by 56 percent relative to the current standards, which expire in 2026. In total, the EPA estimates that the updated standards would cut carbon dioxide emissions by 7,300 million metric tons through 2055, equivalent to four years’ worth of U.S. transportation sector greenhouse gas emissions.
3. Consumers will save billions of dollars at the pump due to technological advances and vehicle efficiency improvements
The EPA’s vehicle standards focus solely on reducing the amount of pollution that comes from tailpipes; however, because most automakers comply with the standards by making their vehicles more efficient, higher standards have also saved consumers billions of dollars at the pump. The new standards would have the same effect, with the EPA estimating that consumers are likely to save up to $770 billion on fuel expenses through 2055.
Many manufacturers may also meet the upcoming new standards by making more electric vehicles (EVs), which pollute far less and are more efficient than the most efficient gasoline vehicles. EVs save drivers money on both fuel and maintenance. For example, according to Consumer Reports, EV owners spend 60 percent less on fuel than owners of gas-powered vehicles—that amounts to savings of $1,800 to $2,600 per year when gasoline prices are high, or from $470 to $790 when prices are low. Consumer Reports also found that EVs cost their owners 50 percent less on maintenance than gasoline-powered vehicles. Combined, Consumer Reports estimates that owning an EV would save the typical driver $6,000 to $12,000 over the lifetime of the vehicle. EV purchase prices have also been declining, with the International Council on Clean Transportation estimating that EVs are likely to achieve price parity with gasoline vehicles no later than 2025, partly as a result of Inflation Reduction Act incentives.
4. Strong standards will combine with Inflation Reduction Act investments to drive further technological advances
EPA standards have historically played a crucial role in driving innovation, such as the mass adoption of catalytic converters, and the agency’s new standards would build on the success of the Inflation Reduction Act to promote further advances. The Inflation Reduction Act’s investments in clean technology manufacturing are already creating thousands of jobs and fueling an American vehicle manufacturing renaissance. These clean technology incentives, including tax credits and loan and grant programs such as the Advanced Technology Vehicles Manufacturing Loan Program and the Domestic Manufacturing Conversion Grants Program, lower costs for consumers and automakers and encourage automakers to manufacture clean vehicles domestically. Investments through the Inflation Reduction Act helped spur more than $49 billion in private investments and the announcement of more than 84,000 new jobs in EV and battery manufacturing. Surging investment in battery production has also driven down average battery costs, making EVs cheaper to build. Between September 2022 and September 2023, the average cost of an EV decreased by more than $14,000. A strong emissions standard sends a clear signal to automakers that they must invest in cleaner and more affordable vehicles, and targeted support for domestic manufacturing supports innovation to help domestic automakers keep up with—or, in some cases, catch up to—foreign competitors.
Ensuring new auto jobs are good jobs
The recent victory of the United Auto Workers (UAW) in securing historic worker contracts with the Big Three American automakers supports progress toward ensuring that jobs created by a growing domestic automotive industry will be good jobs. Critically, the Big Three agreed to open pathways for the UAW to represent workers at future battery plants, a fast-growing component of EV supply chains. Following that victory, the union has launched a campaign to organize Tesla and foreign nonunion auto manufacturers operating in the United States, a critical step to ensure the prosperity of America’s manufacturing and technological boom is shared by all.
Conclusion
The EPA’s proposed standards are set to provide historic benefits to public health, the climate, and the economy, with net benefits of up to approximately $1.6 trillion. The Biden administration’s finalization of updated light-duty vehicle standards, combined with the climate and jobs-focused investments from the Inflation Reduction Act, will set the transportation sector on a path toward a clean future that benefits all Americans by providing healthier air, good jobs, and a more stable climate.
Methodology
The author used data reported by Argonne National Laboratory to construct Figure 1 and Figure 2. Argonne reports monthly historical sales data for battery electric, plug-in hybrid, and hybrid light-duty vehicles from December 2010 through January 2024 as of the time of this column’s publication. Argonne also reports total light-duty vehicle sales for the same time period. Figure 1 and Figure 2 classify battery electric and plug-in hybrid vehicles as EVs and aggregate the monthly sales of those vehicles to determine annual EV sales. The author calculated annual internal combustion engine (ICE) vehicle sales by subtracting monthly battery electric and plug-in hybrid sales from monthly total light-duty vehicle sales.