Free to Choose: US automobile market

I find myself from time to time reflecting on the words of economist Milton Friedman when I’m going about my work as a member of Congress. The Trump administration’s action to correct the national automobile fuel economy and greenhouse gas emissions standards is one of those times. I’m reminded of Friedman saying in his brilliant Free to Choose video series that “the U.S. government has been increasingly muscling in on buyer and seller.” “There are agencies all over Washington where bureaucrats decide what’s good for us,” he would continue. Making “products more expensive and less variety” all sound applicable to the Obama administration’s Corporate Average Fuel Economy (CAFE) and greenhouse gas emission standards for our nation’s vehicle fleet.

A Midterm Evaluation of the 2022-2025 standards was a designed opportunity to review the 2012 Obama standards, but was needlessly expedited and the realities of the marketplace ignored. The hope was to lock in standards designed for aggressive development and sale of electric vehicles, therefore locking out automaker and consumer’s freedom to choose. Thankfully, the Trump administration’s proposed Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule opens a transparent process with a wide range of regulatory options to enhance safety and continue environmental improvement while not ignoring low- and middle-income families and changes in energy marketplace. Note, even the least restrictive option doesn’t lower or reverse the path of efficiency or emission standards.

{mosads}As the Trump proposal describes, the standards have already driven the cost of new vehicles higher and left unchanged would add another $2,340 per car, which has and would further contribute to Americans keeping their vehicles longer. While continuing to increase standards on paper may make some feel better, the reality to achieve greater fleet efficiency and improved environmental outcomes is fleet turnover dependent on willing buyers and sellers. A zero emission vehicle in a showroom does little improvement when 12-year-old vehicles continue to cruise down the road or sit in traffic, depending on where you choose to live.

Further, not only since CAFE was enacted in 1975, but since the Obama standards were finalized in 2012 the United States has reversed its liquid transportation fuel production trends and is on track to even become a net energy exporter by 2022. My home state of North Dakota has been at the forefront of this domestic production increase in not only crude oil, but also ethanol, which has reduced our dependence on unfriendly foreign sources and created numerous American jobs.    

Despite the attacks on the Trump administration’s regulatory reform, we can balance continued environmental leadership, choice, affordability, safety and a strong economy. Free to choose, even electric vehicles, for those who want to build them and buy them.

Cramer represents North Dakota’s at large district and is a member of the Energy and Commerce Committee.