This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Two administrations, the Biden administration and the second Trump administration, reached opposite conclusions about whether vehicle emissions standards should be rolled back. These conclusions came from different assumptions, including whether avoiding air pollution has value to society and the degree to which car buyers value future fuel savings from getting a more efficient vehicle.
Both assumptions matter, and disagreement over either accounts for hundreds of billions of dollars in the government's cost-benefit math on vehicle emissions standards—math that, in this year's rollback, also assumes gas prices are lower than what drivers are actually paying at the pump. That's the finding of a new analysis in Science co-authored by Kenneth Gillingham, the Grinstein Class of 1954 Professor of Environmental and Energy Economics at the Yale School of the Environment, along with nine other economists from institutions across the country. When the Trump administration rescinded the EPA's greenhouse gas standards for vehicles this spring, it backed the move with a cost-benefit analysis required for any economically significant federal rule.
It concluded that Americans would be $600 billion to $790 billion better off without the standards. Gillingham and his co-authors show that correcting just one of the analysis's assumptions is enough to turn that benefit into a net cost. "My co-authors and I have been carefully following the regulations affecting vehicle efficiency and fuel type, and we observed enormous swings in the analysis between administrations," Gillingham said.
"If the numbers are being calculated correctly, one or both of the analyses must be incorrect." The authors argue that assigning a zero value to avoided air pollution, as in the latest Trump administration rulemaking, is obviously incorrect, but the assumption about the value of vehicle efficiency is more nuanced. This assumption sounds narrow, but it isn't: How much are car buyers actually willing to pay for a vehicle that saves them money on gas? Research has long shown that buyers pay less than a dollar today for a dollar's worth of future fuel savings.
Economists attribute that gap to two possible causes: consumers who simply don't pay close enough attention to long-run fuel costs, a bias often known as "inattention," and "hidden costs"—attribute trade-offs in which automakers save fuel by compromising on other attributes, such as weight, performance or comfort, that consumers also value. The issue, the authors show, is that the EPA's analyses have assigned that gap to different causes over time. The 2024 rule attributed the entire gap to the behavioral bias of inattention, which means that consumers could be better off in the long run if they invest in more efficiency.
The 2026 rule assumes the opposite, attributing it entirely to hidden costs from attribute trade-offs, so consumers would gain by paying less at the pump through improved efficiency but lose out in other attributes they value. That single modeling choice changes the EPA's estimate by hundreds of billions of dollars. Drawing on a systematic review of the peer-reviewed literature, the authors propose a corrected breakdown: Roughly 55 cents of every dollar in "missing" fuel savings reflects inattention, while about 23 cents reflects genuine attribute trade-offs—based on recent EV studies.
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