The EPCA (Energy Policy and Conservation Act) is required to issue “maximum feasibility” standards for manufacturers’ fleets that the NHTSA (National Highway Traffic Safety Administration) must adhere to. The EPCA must balance factors including technological feasibility, economic practicability, the effect of motor vehicle standards of the Government on fuel economy, and the need for the United States to conserve energy.
The REMI model was utilized to examine the potential changes in vehicle sales from both state and federal vehicle standards as well as possible changes in employment, GDP, and income. Overall, the REMI model found that the direction of the long-term macroeconomic impacts from vehicle standards is positive, primarily a result of fuel savings and industry investment outweighing increased vehicle technology costs, even with lower projected fuel prices than anticipated in 2012 and higher technology cost assumptions which do not reflect the most current estimates.
Union of Concerned Scientists – Comments Concerning the Proposed Rulemaking to Revise Light-Duty Vehicle Greenhouse Gas Emissions Standards and Corporate Average Fuel Economy Standards Technical Appendix [Full PDF]