Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
The Competitive Enterprise Institute (CEI) and Consumer Alert hereby submit these comments on NHTSA’s proposal to increase its light truck CAFE standards. In our view, NHTSA’s proposal would unjustifiably restrict the ability of consumers to choose the vehicles that are best suited to their needs. NHTSA has made no showing that consumers are somehow incapable of adequately assessing how much importance to give to fuel economy in making their purchase decisions, nor has it shown that automakers are failing to meet consumer needs.
The focus of the comments below deals with one specific aspect of NHTSA’s proposal—namely, its failure to adequately consider the lethal impact that higher light truck standards would have on automotive safety. Contrary to NHTSA’s analysis, it is likely that the standards would in fact lead to further downsizing. Even if they did not, they would still restrict the clear upsizing trend of recent years in light trucks. In either case, the result would be more traffic deaths, above and beyond those that are already occurring under the current standard.
BACKGROUND OF CEI AND CONSUMER ALERT
CEI is a non-profit research and advocacy organization dedicated to reducing government overregulation. Consumer Alert is membership organization involved in protecting and expanding consumer choice in the marketplace. Both of these organizations have been extensively involved in the CAFE issue for over a decade. As described below, in 1989-95 they undertook a series of court challenges to NHTSA’s treatment of the CAFE-safety issue. This litigation resulted in the only judicial overturning of a CAFE standard in the program’s history. Yet despite these court rulings, NHTSA is still unjustifiably downplaying the general safety implications of CAFE and the specific safety implications of its current proposal.
I. IN EVALUATING ITS PROPOSED STANDARD,
NHTSA SHOULD BE MINDFUL OF ITS PAST FAILURE TO ADEQUATELY ASSESS CAFE’S LETHAL EFFECTS ON SAFETY
Quoting the first of CEI’s CAFE cases in its proposal, NHTSA claims that it “always has considered the impact of [CAFE] on motor vehicle and passenger safety.” 67 FR 77019, quoting CEI v. NHTSA, 901 F.2d 107, 121 n.11 (D.C. Cir. 1990). But in fact the two CEI cases that followed this decision show that NHTSA’s past treatment of the CAFE-safety issue was far from adequate. 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) (“CEI II”). It characterized NHTSA as “attempt[ing] to paper over the need to make a call” and engaging in “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.
The court 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.
This ruling, however, did not change NHTSA’s approach. After more than a year of reconsideration, NHTSA developed a new rationale for its claim that CAFE has no safety effects. Among its new arguments was the claim that automotive downsizing was a natural trend unrelated to CAFE. To support this, NHTSA gave the following incredible example: "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. It totally ignored the fact that, at the same time, such non-portable objects as new homes and television sets were increasing in size. Given NHTSA's desperation to justify CAFE, this inconvenient fact was dismissed as 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 judicial deference owed to an agency. 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.
NHTSA’s approach becomes even more troubling in light of the National Academy of Sciences 2001 report, Effectiveness and Impact of Corporate Average Fuel Economy Standards, http://books.nap.edu/books/0309076013/html/3.html  (hereinafter referred to as NAS Report) (incorporated by reference). That report essentially found that CAFE’s downsizing effect has a clear, adverse impact on traffic safety, and contributes to approximately 2,000 traffic fatalities per year. Finding 2, id. at 3, cited at 67 FR 77,016. Yet NHTSA rarely emphasized this point in conducting the program, and none of its CAFE proposals ever mentioned that its program was putting this many lives at risk. NHTSA has also ignored the fact that this lethal effect is ongoing, and that CAFE’s human toll continues to mount with each passing year. This, it seems, is a clear dereliction of duty, especially for an agency whose middle name is safety.
For the reasons explained below, NHTSA’s latest proposal continues this unfortunate pattern.
II. BECAUSE THE NAS REPORT INDICATES
THAT RECENT DECREASES IN FUEL ECONOMY HAVE SAVED LIVES,
ANY PROPOSAL TO REVERSE THAT TREND CARRIES A HEAVY BURDEN OF PROOF ON THE SAFETY ISSUE
NHTSA’s CAFE proposal is popularly portrayed as an attempt to stem the recent decline in fuel economy of the on-the-road fleet. The NAS Report, however, makes it clear that this trend has been positively beneficial from the standpoint of traffic safety. In its words, “the indications are that recent increases in vehicle weight, though detrimental to fuel economy, have saved lives in return.” NAS Report at 29.
NHTSA claims that its proposed CAFE increases will not result in any vehicle downsizing. This proposition is extremely questionable. As the court noted in CEI II, the “historical fact is … that carmakers respond to CAFE standards by reducing the size of their fleets.” 956 F.2d at 325. Similarly, the NAS Report states that “it would be shortsighted to ignore the possibility of future vehicle weight reduction in response to increases in CAFE standards.” NAS Report at 70.
Even if NHTSA’s claim were true, moreover, it is clearly likely that higher standards will restrict the extent to which light truck producers can upsize their vehicles. This is the real criterion against which CAFE’s impacts must be measured. In the court’s words, the “appropriate comparison, which NHTSA must … address, is between the world with more stringent CAFE standards and the world with less stringent standards.” 956 F.2d at 325.
The most appropriate comparison is not between the proposed light truck standard and the current standard, but between it and no constraining standard at all. Even the current standard has a lethal safety effect, because it prevents the light truck fleet from being upsized. NHTSA’s decision not to consider lowering rather than raising the standard, especially in light of the NAS Report’s safety findings, should be reexamined.
III. NHTSA’S PROPOSAL DISREGARDS THE NAS REPORT’S RECOMMENDATIONS AGAINST AGGRESSIVE INCREASES IN CAFE
The NAS Report states that “raising standards too steeply over too short a period of time” is risky for both the auto industry and the public. NAS Report at 69. Such increases “lead to sharp increases in costs to manufacturers (and thus to consumers).” Id.. When new, still-developing technologies are commercialized to meet such standards, there are a number of heightened risks. Vehicles incorporating such technologies may face unexpectedly high repair costs, as well as unexpectedly quick obsolescence as improved versions of these technologies are developed. Id.
In addition, there is the risk that such new technologies will simply fail. One unappreciated example of this is the Ford-Firestone tire fiasco. As a detailed report on this event by Public Citizen demonstrates, this defectively designed tire resulted from Ford’s attempt to increase the fuel economy of its Explorer. Ford requested a redesigned, more fuel-efficient tire from Firestone, and that redesign proved to be disastrously defective. Public Citizen, The Real Root Cause of the Ford-Firestone Tragedy, April 2001, http://www.citizen.org/documents/rootcause.pdf .
According to the report, Ford first decreased the tire’s inflation to reduce rollover risk. However,
“the decreased inflation and increased rolling resistance also lowered the Explorer’s fuel efficiency. To correct the fuel economy problem, Ford changed the tire design to make the tire lighter in weight, less durable, and more prone to the stresses created by use on an Explorer at Ford’s recommended inflation pressure.”
Id. at 8 (emphasis added); see also id. at 1, 16-17, 30 (cited pages attached hereto).
NHTSA claims that its proposed CAFE increases are not aggressive, but this view is apparently not shared by the chairman of the committee that wrote the NAS Report. “Paul R. Portney, a senior fellow at the Resources for the Future think tank who headed the National Academy of Sciences study, said that while the proposed increase in the mileage standard may seem small to some, it is ‘an aggressive move’ because it will force auto manufacturers and their suppliers to make significant changes in engine designs for the next three model years with little lead time.” Washington Post, “U.S. Seeks Modest Increase in SUV Fuel-Efficiency”, Dec. 13, 2002, p. A9 (emphasis added).
In short, NHTSA’s proposal raises precisely those risks that the NAS Report warned about.
IV. ANY DOWNSIZING OF SUVS WOULDCLEARLY REDUCE AUTOMOTIVE SAFETY
The NAS Report also makes it clear that, when it comes to the safety-enhancing effects of greater mass, SUVs are no different than passenger cars. Occupant death rates for passenger cars improve as size increases, and the same is true of SUVs. See Table 2-2, NAS Report at 28. The smallest SUVs (under 3000 pounds) have an occupant death rate that is more than twice that of the largest SUVs (above 5000 pounds). (Those smallest SUVs, by the way, have apparently disappeared from the new-car market; Consumer Reports latest auto issue (April 2002), for example, lists no SUVs below 3000 pounds.) In addition, the largest SUVs have a lower occupant death rate than any other class of vehicle in the table.
If the light truck CAFE standard were made more stringent, it would very likely encourage sales of the smaller, less crashworthy SUVs, at the expense of the larger, safest SUVs. Even if there were no literal downsizing of actual models, and even if there were no mix-shifting of sales toward smaller models, a higher CAFE standard would clearly diminish the ongoing market trend toward larger, safer SUVs; that is, such a standard would reduce or eliminate future upsizing. For this reason, the lethal safety effects of such a standard are unavoidable. NHTSA’s proposal, however, fails to acknowledge, let alone analyze, these effects.
For the foregoing reasons, NHTSA should abandon its assumption that a higher light truck standard would not reduce automotive safety, and should instead examine whether the standard should be reduced rather than raised.
Competitive Enterprise Institute
1001 Conn. Ave. NW, Suite 1250
Washington DC 20036
February 14, 2003