Testimony Before The Transportation Research Board in 2001

Testimony Before The Transportation Research Board in 2001

February 05, 2001

TESTIMONY BEFORE THE TRANSPORTATION RESEARCH BOARD

ON THE EFFECTIVENESS AND IMPACT OF

CORPORATE AVERAGE FUEL ECONOMY STANDARDS

Presented By

Sam Kazman, General Counsel

1.      The basic question:  Has CAFE constrained safety in the past?

Is CAFE likely to do so in the future, especially if CAFE standards are made more stringent?

 

The answer to both questions is yes.  In general, there is a positive correlation between vehicle size and safety, and between vehicle weight and safety.  Fuel economy, on the other hand, is negatively correlated with size and weight.  Perhaps the foremost analysis of the connection between these two issues, and of CAFE’s adverse effect on safety, is contained in R.W Crandall & J.D. Graham, The Effect of Fuel Economy Standards on Automobile Safety, 32 J. Law & Econ. 97 (1989).  A summary of other, more recent studies on this issue is contained in Attachment A.  CEI has estimated, on the basis of the Crandall-Graham study, that in 1997 CAFE was responsible for between 2,600 and 4,500 traffic fatalities in passenger cars; under a 40 mpg CAFE standard, the death toll would have ranged from 3,800 to 5,700.  Attachment B.

 

2.      Some widespread, but incorrect, claims about why CAFE supposedly does not reduce safety:

 

a)      Past gains in fuel economy have been achieved without downsizing

 

NHTSA has long recognized the importance of downsizing to improved fuel economy.  At the outset of the CAFE program, it characterized weight reduction as the “most obvious method for improved fuel economy.” 42 Fed. Reg. 33,537 (1977).  A decade later, its opinion had not changed; it characterized weight reduction as “probably the most powerful technique for improving fuel economy”, and it estimated that “each 10 percent reduction in fuel weight improves the fuel economy of a new vehicle design by approximately 8 percent.  MY 1989 Final Regulatory Impact Analysis at IV-15.  In its annual Automotive Fuel Economy Program reports to Congress, NHTSA repeatedly touted the weight-saving advantages of new materials and new vehicle designs.  Thus, even these new technological approaches often involved weight reduction in their quest for higher fuel economy.

 

b)      The traffic death rate has improved despite downsizing

 

In fact, the vehicle traffic death rate, whether measured in deaths per billion miles traveled or in deaths per million vehicles, has been improving since the early 1900s.  Its continued improvement since the advent of CAFE-induced downsizing cannot be used as a basis for evaluating the safety impact of that downsizing.  The important point is that the death rate would have fallen even more in the absence of such downsizing.

 

c)      While fuel economy gains in the past may have involved downsizing, new technologies can now give us higher fuel economy without reducing safety.

 

This is simply false, even if such technologies do not themselves involve downsizing.  Consider some future hi-tech car capable of meeting a CAFE standard of 75 mpg. Imagine that you then increase this car’s size and weight by adding several cubic feet of trunk space and occupant space.  The result would be an even safer car.  This larger car, however, would be less fuel-efficient.  CAFE might well restrict, or prevent, its availability.  In short, as long as we have a constraining CAFE standard, we will have less vehicle safety.  This will be true regardless of what new technologies are utilized. 

 

3.      A clear statement from this panel on CAFE’s safety impact is essential.

 

a)      NHTSA has failed to publicly address CAFE’s safety effects.

 

Throughout CAFE’s history, NHTSA has consistently refused to admit that any specific CAFE standard has an adverse safety effect.  While it has occasionally mentioned t possible long-term relationship between CAFE and safety, it has never attempted to quantify it.  This failure to address the issue led CEI and Consumer Alert to challenge this agency in court. In 1992, a federal appeals court ruled that the agency’s approach was so capricious as to be illegal.  CEI and Consumer Alert v. NHTSA, 956 F.2d 321 (D.C. Cir. 1992).   The court ruled that NHTSA's failure to assess CAFE's lethal effects was an "attempt to paper over the need to make a call.  We cannot defer to mere decisional evasion."  956 F.2d at 323.  Using exceptionally harsh language, the court found that NHTSA had

 

"fudged the analysis ... and, with the help of statistical legerdemain, made conclusory assertions that its decision had no safety cost at all. ...  The people petitioners represent, consumers who do not want to be priced out of the market for larger, safer cars, deserve better from their government."  Id. at 324.

 

One of NHTSA's defenses was that downsizing was not an important means of CAFE compliance and that, even if consumers could not find affordable domestic large cars, they could always turn to foreign cars.  The court rejected this argument as a "lame claim"; given the high prices of large foreign cars, it found NHTSA's argument about their availability to be "in the spirit of Marie Antoinette's suggestion to 'let them eat cake'."  Id. at 325 & n.1.  It concluded with these words:

 

“When the government regulates in a way that prices many of its citizens out of access to large-car safety, it owes them reasonable candor.  If it provides that, the affected citizens at least know that the government has faced up to the meaning of its choice.  The requirement of reasoned decisionmaking ensures this result and prevents officials from cowering behind bureaucratic mumbo-jumbo."  Id. at 327.

 

Because NHTSA had illegally refused to confront the CAFE-safety issue, its decision was remanded.  For the first time in CAFE's history, a fuel economy standard had failed to pass judicial review.

 

The court's ruling, however, did not change NHTSA’s approach.  After more than a year of reconsideration, NHTSA finally developed a new rationale for its claim that CAFE has no safety effects whatsoever.  Among its new arguments for the notion that CAFE has no downsizing effect was this unbelievable line of reasoning:  "the size and weight of many other products, ranging from SLR cameras to computers, was reduced during the same period ...."  58 Fed. Reg. 6,946 (1993). 

 

NHTSA was thus claiming, in total seriousness, that size trends for objects that consumers carry around their necks or place on their desks were somehow indicative of what might happen to car size in the absence of CAFE.  At the same time, of course, such non-portable objects as new homes and television sets were increasing in size; given NHTSA's desperation to justify CAFE, however, this was irrelevant. 

 

CEI and Consumer Alert sued NHTSA once again.  This time we did not succeed; a new panel of judges upheld NHTSA's decision, noting the high degree of deference to which agency rulemaking is entitled.  CEI and Consumer Alert v. NHTSA, 45 F.3d 481 (D.C. Cir. 1995).  Nonetheless, even this panel pointed out that the agency's approach to the CAFE size-safety issue was questionable; in its words, "NHTSA's failure to adequately respond to the Crandall and Graham study is troubling ...."  Id. at 486.          

 

b)      Advocates of higher CAFE standards refuse to acknowledge any safety costs whatsoever, despite their past statements to the contrary on this issue.

 

A Sierra Club brochure (Attachment C) is typical of the approach taken by proponents of higher CAFE standards.  It asks: “Can we improve fuel economy without sacrificing safety?”  Its answer: “Absolutely.  Long time safety advocates such as the Center for Auto Safety and Ralph Nader support increasing CAFE to 45 mpg and point out that we can do so safely.”

 

In the past, however, before the size-safety issue became politicized, both Mr. Nader and the Center for Auto Safety repeatedly stated that larger size means more safety.  In a 1989 interview regarding what type of car he would buy, Mr. Nader stated:  “Well, larger cars are safer‑-there is more bulk to protect the occupant.  But they are less fuel efficient ....”   As to the question of which cars are least safe, Mr. Nader replied: “The tiny ones such as the Corvette, Yugo, Hyundai."  “Be Safer in the 90’s: New Warnings From Ralph Nader,” Woman’s Day, Oct. 24, 1989, p.32.

 

The Center for Auto Safety once took the same position as well.   In 1972 it published a book entitled Small on Safety‑-The Designed-In Dangers of the Volkswagen, with an introduction by Ralph Nader and with Clarence Ditlow as one of its authors.  Page after page in this book dealt with the reduced safety inherent in small vehicle size, as the following excerpts demonstrate:

 

·        According to one cited study, “the likelihood of serious or fatal injury goes up exponentially as the weight of the car decreases” (p. 1);

·        "Because of the Beetle's small size, there is little space between the occupant and the windshield ....” (p. 5);

·         "In shorter cars, the gas tank is necessarily closer to the occupant than in larger cars.”  (p. 5);

·        "Yet another hazardous result of the Beetle's small size is the lack of effective collapse distance, which is necessary to absorb some of the forces generated by a crash." (p. 5);

·        "Small size is supposed to have one compensating advantage: according to a prevailing myth, cars like the Beetle are less likely to become involved in accidents, because they are more maneuverable than large cars.  This myth is not supported by the facts." (p. 13, italics added);

·        "Small size and light weight impose inherent limitations on the degree of safety that can be built into a vehicle.  All known studies relating car size to crash injury conclude that occupants of smaller cars run a higher risk of serious or fatal injury than occupants of larger cars." (p. 87).

 

c)      Popular sources of automotive information, such as Consumer Reports, are omitting the size-safety issue from their car-buying advice.

 

Consumer Reports annual auto issue, published in April of each year with widespread media coverage, is perhaps the most widely used source of car-buying information.  Its extensive discussion of selecting a safer car, however, contains absolutely no mention of the fact that larger, heavier models are generally safer than smaller, lighter ones.  Attachment D.  By comparison, in the Insurance Institute for Highway Safety’s website guide on “Shopping For A Safer Car,” size and weight are among the very first factors mentioned.  Attachment E.

 

There is a similar problem regarding the Star Ratings from NHTSA’s New Car Assessment Program.  Many consumers mistakenly use these without realizing that NHTSA has warned against comparisons across size classes.  According to one study, there is widespread consumer confusion on this issue, and NHTSA’s warning has been “contradicted by other NHTSA statements”.  Attachment F.

 

d)      Public understanding of CAFE’s safety effects is essential to an informed debate on this issue.

 

Most people are simply unaware of CAFE’s impact on traffic safety, especially given the improvements in overall vehicle safety and the new introduction of new safety technologies.  However, once people learn about CAFE’s safety effect, their opinion of the CAFE program changes drastically.  A 1999 CEI poll (Attachment G) found that, without information of CAFE’s safety effects, the public favors the program by a slim majority of 51%, with 23% opposed.  Support begins to drop when CAFE’s safety effects are described in general terms.  When people are informed of actual quantitative estimates of these effects (based the 1989 Crandall-Graham study), their support plummets to less than 20% in favor, with 57% opposed.

 

Conclusion

 

Regardless of whether the CAFE program is left unchanged or made more stringent, there is overwhelming evidence that it has an adverse impact on vehicle safety.  At the same time, this issue has been inadequately addressed by many of the very organizations that much of the public looks to for auto safety information.  Until the public has a clear understanding of CAFE’s safety impact, there can be no informed public debate regarding CAFE.  For this reason, it is of the utmost importance that this panel make a clear statement regarding CAFE’s impact on safety.

Respectfully submitted,

Sam Kazman

General Counsel

Competitive Enterprise Institute

 

February 6, 2001