On July 29th, the Environmental Protection Agency (EPA) announced plans to repeal the Endangerment Finding—the determination that greenhouse gases endanger public health and welfare. That finding is the legal backbone for a range of climate policies, including the limits EPA sets on pollution from vehicles, commonly known as tailpipe standards. New modeling analysis from Energy Innovation shows that removing tailpipe standards alongside the Endangerment Finding shifts the makeup of vehicles on the road, which has cascading effects on fuel demand, gas prices, and even health and employment statistics in a consistent upward trajectory. Below we take a closer look at some of these key takeaways.
EV market trajectories
Under today’s rules, electric vehicles (EVs) were on a path to exceed 70 percent of new passenger vehicle sales by 2035 but that could fall to around 55 percent without current standards, according to the analysis. For other vehicle types – vans, buses, and heavy trucks – the drop is even steeper, from roughly half of new sales to just under one-fifth by 2035.
Household energy and fuel prices
That slower EV adoption increases demand for gasoline and petroleum products, and higher demand increases prices. The study notes that if tailpipe standards are repealed, gas prices would rise moderately in the near team ($.06/gal in 2030) but balloon up to $.46/gal in 2045, meaning households with gas vehicles will spend, on average, up to $400 more per year on gas alone by the same time period. Americans would spend approximately $310 billion more on energy between 2025-2050, an average increase of $83 per household per year over the next 25 years.
Pollution and Public health
More gas cars on the road increases emissions of harmful air pollutants like particulate matter and nitrogen oxides, whose elevated levels can cause increased rates of bronchitis, asthma, heart attacks, and other health problems. Using the Environmental Protection Agency’s benefit-per-ton approach, Energy Innovation estimates that an additional 700 premature deaths per year on average would likely occur between 2026-2050 as a result of the repeal of tailpipe standards.
U.S. manufacturing and jobs
Weaker standards also affects industry and long-term job potential. The study projects that a repeal of tailpipe emissions standards would hamper new growth and investment in EV manufacturing, reducing national GDP by $33 billion annually within ten years and $710 billion cumulatively through 2050. In addition, this repeal would cost an average of 110,000 jobs each year between 2025-2050 (see Figure 1).
Figure 1. Change in Domestic Jobs due to Tailpipe Standard Repeal
The study notes that job losses peak in 2039 with approximately 175,000 jobs lost domestically as a result of tailpipe standards being repealed.
The results from the study are only estimates, not outright forecasts. Outcomes will depend largely on future fuel prices, technology costs, consumer behavior, and policy. However, the key message of the study remains: removing tailpipe standards leads to slower EV adoption, higher household spending on fuel and energy, impacts on public health, and dampening of domestic manufacturing and the economy at large compared to maintaining the current rules in place.
The next regulatory steps for repealing the Endangerment Finding include action taken by the EPA to move through notice and comment periods, and any potential litigation to keep standards in place. In the meantime, we’ll continue to update readers of EV Hub’s Digests as the regulatory process around tailpipe standards evolves and as new data becomes available.
