How Would the Proposed EPA Passenger Vehicle Greenhouse Gas Emissions Standards Affect New-Vehicle Consumers?

The Environmental Protection Agency (EPA) recently proposed passenger vehicle greenhouse gas (GHG) emissions standards that would reduce new-vehicle emissions rates by about half between 2026 and 2032. EPA estimates the standards would reduce US GHG emissions by about 10 percent by midcentury, helping the administration achieve its overall GHG emissions objectives, and yield large consumer, air quality, and climate benefits. However, EPA does not quantify how those benefits would be distributed across consumers. This report uses the Resources for the Future (RFF) light-duty vehicle model to estimate overall benefits and costs of the proposed standards and to describe how new-vehicle consumers would be affected by income group. For vehicles sold in 2030, tighter standards improve social welfare by $128 billion (2022$) over the lifetimes of those vehicles. Lower-income households enjoy larger fuel cost reductions than other households and thus receive a disproportionately large share of the overall benefits.