November 16, 2017

Auto Regulations & the Economy

Researchers from Indiana University analyzed the combined effects of three regulatory programs aimed at reducing greenhouse gases through rules for new cars and light trucks: the U.S. Department of Transportation’s corporate average fuel economy (CAFE) standards for model years 2017-2025; the Environmental Protection Agency’s greenhouse gas (GHG) emissions standards for model years 2017-2025; and the California Air Resources Board’s Zero-Emission Vehicle (ZEV) requirements for 2018-2025.

You can access the full report by clicking here.

The study, titled “Macroeconomic Study of Federal and State Automotive Regulations with Recommendations for Analysts, Regulators, and Legislators,” was authored by Sanya Carley, Denvil Duncan, John D. Graham, Saba Siddiki, and Nikolaos Zirogiannis. REMI recognized their work this year with George I. Treyz Award for Excellence in Economic and Demographic Analysis.

Using REMI’s modeling software, the researchers found that the overall annual impact is negative in the near term but positive in the longer term. They looked at the price effects of the increasingly more stringent standards and related economic impacts; the economic benefits of innovations inspired by the regulations; and reallocation of spending as the result of savings on gasoline spending.