US NEWS & WORLD REPORT 3/27/17
By Michael Shank
President Donald Trump is missing a major market opportunity in loosening fuel economy standards, a direction decided in Detroit last week. Trump, apparently, wants America to miss out on the global growth of energy efficient vehicles.
The numbers speak for themselves. Five years ago, just over 52,000 plug-in hybrid and electric vehicles were sold internationally. Fast forward to 2016 when over 777,000 plug-ins were purchased. And in 20 years, we’ll have over 150 million electric vehicles on the road, over 100 times the nearly 1.5 million we have today, according to the International Energy Agency.
Each year is seeing massive growth. People everywhere want more efficient cars. There is global demand and it’s rising. China’s electric vehicles sales grew by 300 percent between 2014-2015. The United Kingdom’s sales grew by a similar amount between 2013-2014. And during those time periods, Denmark, Netherlands and Sweden were averaging 200 percent growth in sales.
In order to meet this market demand, the world’s economic powerhouses are moving all auto manufacturing towards higher overall efficiency, not just plug-in vehicles. Japan and Canadian carmakers, for example, are planning for and producing cars that travel, on average, 55 miles per gallon, while European Union carmakers are the trend setters, closing in on targets for vehicles to hit 60 miles per gallon in the next four years.
In letting American automakers be apathetic about efficiency, not only is Trump is missing out on market share, he’s making Americans pay more for their transportation, not less. There are two ways Americans will pay more with Trump’s decision. First, Americans are losing out on thousands of dollars in personal savings. Had we stuck with the standards, Americans would’ve saved nearly $5,000 in fuel purchases (and over $8,000 if fuel prices increase). It doesn’t take a brain surgeon to realize that fewer trips to the gas pump are good for the pocketbook.
Second, with the increased consumption of fossil fuels, American taxpayers will have to foot an even higher government subsidy. Americans are already footing an annual $20 billion, the figure that fossil fuel companies receive in subsidies from the U.S. government. This is on top of the nearly $10 billion that American taxpayers lost – i.e. it was never recovered – when the U.S. government bailed out the auto industry. This far-from-a-free-market industry, propped up by American taxpayers, is about to be outcompeted by automakers elsewhere.
The only U.S. industry that will benefit from this decision is the fossil fuel industry. Automakers in America will be outpaced again by innovators overseas, a trend that is happening in almost every clean energy industry. For example, we’re being outpaced by Asian and European markets in solar and wind energy. America is not even in the top twenty nations controlling the vast share of variable renewable energy generation. And now with Trump’s Detroit decision, we can add energy efficient vehicle innovation to this not-making-America-great list.
The irony in all of this is that reducing waste and reducing inefficiency is an inherently conservative concept. Ten years ago, conservative Republicans in the House of Representatives and I were publicly calling for stronger vehicle efficiency standards. We noted then that European Union and Japan vehicle efficiency goals were outpacing America’s. We noted then that lower-emission, higher-mileage vehicles, such as hybrids, were gaining in popularity. We noted then that this was a key reason Toyota surpassed the U.S. Big Three as the world’s top manufacturer.
We did so because no one likes waste, no one likes inefficiency and no one likes to be outpaced by others – not conservatives, not progressives, not independents and not libertarians. This issue is about as multi-partisan as you can get. Set aside the sizeable reductions in greenhouse gas emissions that come with more efficient vehicles. Set aside the fact that we’re witnessing the hottest years on record and the highest emissions on record and that American cars have to get cleaner if we’re going to survive the extreme weather that comes with climate change.
Sizing up this decision on conservative and competitive principles alone, it’s clear that Trump is making a huge mistake. In deciding Detroit’s dirtier direction, America is about to be out-paced in every new energy-related, record-shattering innovation and market share. American manufacturers will lose, taxpayers will lose, and efficiency will lose. Waste will win. And this – to quote Trump – is sad.