Study: Flawed cost-benefit math undercuts EPA vehicle emissions rollback

A new study published in the journal Science argues that the Trump administration's economic justification for scrapping federal vehicle greenhouse gas emissions standards is built on fundamental analytical errors. A dozen economists from institutions including Yale, MIT, and the University of Pennsylvania say that correcting these mistakes overturns the administration's case for the rollback.

The administration revoked the emissions standards earlier this year by eliminating the so-called endangerment finding, the legal basis for regulating greenhouse gases. The White House framed the move as a cost-saving deregulatory step, with an EPA analysis estimating that rescinding the rules would save Americans between $600 billion and $790 billion over the coming decades.

The researchers, however, found that the EPA's analysis contains errors in how it accounts for fuel savings, the cost of technology, and vehicle mileage. They argue that correcting these flaws reduces the estimated benefit by $1.5 trillion, meaning the rollback would actually cost the country roughly $670 billion.

One key error, the authors say, is that the EPA credits car buyers with receiving only $0.23 of every $1 in fuel savings, omitting billions of dollars in benefits. They also fault the agency for making faulty assumptions about how long it takes for fuel savings to offset upfront vehicle costs, and for how it accounts for the impact of efficiency improvements on vehicle prices and how gas prices influence driver behavior.

“When you rollback the standards, you’re basically forcing consumers to having higher fuel costs than they otherwise would have if they were to buy cleaner cars,” said Antonio Bento, a study author and professor at the University of Southern California. “The administration is not protecting consumers. The administration is actually not protecting carmakers either.”

The EPA defended its analysis in a statement, saying it used established models and updated assumptions reflecting changes in consumer demand for EVs, fuel-price projections, and market conditions since the 2024 vehicle rules. The agency said it will not attempt to push an EV mandate based on “facially implausible projections.”

The study also notes that the EPA did not include the economic value of key environmental benefits, such as reduced pollution. Jason Schwartz, regulatory policy director at NYU's Institute for Policy Integrity, who was not involved in the study, said the research effectively proves the rollback is based on fundamental flaws. “Any one of these mistakes alone is enough to change the sign of the cost benefit analysis and show that this is a bad deal, not just for the environment, but a bad deal for drivers,” he said.

The administration is currently facing legal challenges over its repeal of the endangerment finding.