IU Study Focuses on New Fuel Economy Regulations

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Previously-announced fuel economy and greenhouse gas regulations for vehicles are about to go into effect for 2017 to 2021 model years. However, a new study from the Indiana University School of Public and Environmental Affairs says policymakers should reevaluate future regulations.

Researches say conditions have changed since the new regulations were announced in 2012. The report, titled "Rethinking Auto Fuel Economy Policy: Technical and Policy Suggestions for the 2016-17 Midterm Reviews," says regulators should consider other factors including lower gas and oil prices, which the nation is currently seeing.

"Fuel efficiency is a natural selling point for cost-conscious consumers when gas prices are high. When the price of fuel is low, however, evidence shows that drivers find hybrid and electric cars less appealing," said co-author Saba Siddiki.

The study says regulators should also factor in advances in fuel-saving technologies and interaction between federal and state regulations. It also says supplemental policies, such as increasing gasoline taxes or introducing green car subsidies, could stimulate interest in more fuel-efficient vehicles.

"Our study focuses on new vehicle sales because they affect both the environment and the economy," said Siddiki."It is important to consider how the economic impacts of changes in vehicle sales differ by region. A drop in new vehicle sales will likely have a disproportionate effect on the South and the Midwest, which rely heavily on auto manufacturing jobs."

The authors plan to release a second report next January that will show the impact of the new regulations on new vehicle sales, employment and other aspects.