The Natural Resources Defense Council (NRDC) was ecstatic over the recent appellate court ruling, upholding the EPA’s power to regulate carbon dioxide emissions under the Clean Air Act. Yet the NRDC’s description misleads the innocent reader on several crucial points. Contrary to their claims, federal regulations in the energy and transportation sectors won’t help the economy, and the EPA’s own projections of climate benefits are quite humorous.
Here’s the gist of the NRDC reaction:
“This is a huge victory for our children’s future. These rulings clear the way for EPA to keep moving forward under the Clean Air Act to limit carbon pollution from motor vehicles, new power plants, and other big industrial sources,” said David Doniger, senior attorney for the Climate and Clean Air Program at the Natural Resources Defense Council.
The three-judge panel also upheld the Obama administration’s first set of clean car and fuel economy standards, issued jointly by EPA and the Transportation Department in 2009. This gives EPA the green light to finalize a the second round of clean car standards later this summer that will cut new cars’ carbon pollution in half and double their fuel efficiency to 54.5 mpg by 2025.
These historic agreements with the auto industry, auto workers, states and environmental group will cut carbon pollution, create jobs, and save consumers thousands of dollars at the pump.
These claims are very misleading. As we have stressed repeatedly, the government does not promote job-creation or consumer welfare by imposing new regulations that restrict product variety. Consumers of new vehicles value many things besides fuel economy, such as the purchase price of the vehicle and its safety in a crash. By artificially raising the fuel economy standards of new vehicles, the government will raise sticker prices—making new cars unaffordable altogether for some poorer motorists—and indirectly lead to more traffic fatalities.
Yet if government regulation of carbon dioxide emissions has hidden costs that the NRDC fails to mention, even the alleged benefits are much lower than the NRDC’s triumphant claims would suggest. By their very nature, federal mandates (such as fuel economy standards) are an incredibly blunt instrument to attack the alleged dangers of manmade climate change, meaning that even in theory they will achieve very little.
Indeed, the EPA itself projected that its new standards for light duty trucks and cars would reduce global temperatures by at most 0.02 degrees Celsius in the year 2100. That’s right, the EPA itself says that its latest batch of CAFE standards—part of the suite of powers that will allegedly do such wonders for our grandchildren—will, 90 years from now, render the earth two one-hundredths of a degree Celsius cooler than it otherwise would be.
We have entered an Orwellian world with climate regulations, where carbon dioxide—what trees breathe—has been classified as a harmful pollutant, where federal regulations on energy and transportation are supposedly going to make citizens wealthier, and where infinitesimal climate benefits in computer simulations are trumpeted as monumental achievements. We are not legal experts, but the economic impacts of the appellate court ruling on the EPA will be harmful indeed.