ECONOMIC, EMISSIONS IMPACT OF TRUMP ADMINISTRATION FUEL ECONOMY AND GHG EMISSIONS STANDARDS FREEZE; IMPLICATIONS FOR U.S., CALIFORNIA, “SECTION 177” STATES, CANADA

This research note by Energy Innovation analyzes the economic and environmental consequences of the Trump administration's proposal to freeze federal fuel economy and greenhouse gas (GHG) emissions standards for light-duty vehicles at 2020 levels for model years 2021 through 2026. The analysis focuses on the impact on the U.S. economy, California, 'Section 177' states, and Canada, utilizing the Energy Policy Simulator (EPS) to project costs, emissions, and fuel consumption through 2050.

• Freezing fuel economy and GHG emissions standards at 2020 levels would cause light-duty vehicle fuel economy to stagnate at 37 mpg instead of rising to 51.4 mpg. This policy is projected to cost the U.S. economy up to $400 billion in real 2018 dollars (discounted at three percent annually) through 2050 and increase transportation emissions by up to 10 percent during the year of maximum impact.
• The freeze would lead to significant increases in fuel consumption and GHG emissions, peaking in the 2030s. By 2035, a nationwide freeze would increase gasoline use from 2,000 to 2,400 million barrels per year (a 20 percent increase) and raise transportation sector emissions to 1,510 MMT of CO2e, compared to 1,370 MMT under current policy.
• The impact on U.S. consumers varies depending on whether California and the 'Section 177' states (which represent over 35 percent of the automobile market) retain their authority to set more stringent standards. If these states maintain their standards, the cost to U.S. consumers could range between $240 billion and $400 billion, depending on how automakers manage their fleets across different markets.
• The freeze would have negative global implications for Canada. If Canada continues to mirror U.S. federal standards because California loses its authority to set independent standards, Canadian consumers would lose $67 billion (or $70 billion Canadian dollars) through 2050, gasoline use would increase by 19 percent, and transportation GHG emissions would rise by 11 percent, adding 13 MMT CO2e in 2035.
• The proposal is projected to harm U.S. business competitiveness and employment. The Trump administration's own analysis predicted the proposal could result in the loss of 60,000 jobs, and 17 major automakers have indicated it would reduce the competitiveness of U.S. vehicle manufacturing against foreign manufacturers.

APA

Mahajan, M., & Orvis, R. (2019). ECONOMIC, EMISSIONS IMPACT OF TRUMP ADMINISTRATION FUEL ECONOMY AND GHG EMISSIONS STANDARDS FREEZE; IMPLICATIONS FOR U.S., CALIFORNIA, “SECTION 177” STATES, CANADA. Energy Innovation. https://energyinnovation.org/wp-content/uploads/2019/08/Impacts-of-Trump-Fuel-Economy-Standard-Rollback-on-US-Section-177-States-Canada-8.7.19.pdf

Chicago

Mahajan, Megan, and Robbie Orvis. ECONOMIC, EMISSIONS IMPACT OF TRUMP ADMINISTRATION FUEL ECONOMY AND GHG EMISSIONS STANDARDS FREEZE; IMPLICATIONS FOR U.S., CALIFORNIA, “SECTION 177” STATES, CANADA. Energy Innovation, 2019. https://energyinnovation.org/wp-content/uploads/2019/08/Impacts-of-Trump-Fuel-Economy-Standard-Rollback-on-US-Section-177-States-Canada-8.7.19.pdf.

Wikipedia

{{cite report |last1=Mahajan |first1=Megan |last2=Orvis |first2=Robbie |title=ECONOMIC, EMISSIONS IMPACT OF TRUMP ADMINISTRATION FUEL ECONOMY AND GHG EMISSIONS STANDARDS FREEZE; IMPLICATIONS FOR U.S., CALIFORNIA, “SECTION 177” STATES, CANADA |publisher=Energy Innovation |date=August 2019 |url=https://energyinnovation.org/wp-content/uploads/2019/08/Impacts-of-Trump-Fuel-Economy-Standard-Rollback-on-US-Section-177-States-Canada-8.7.19.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mahajan2019economic, author = {Mahajan, Megan and Orvis, Robbie}, title = {{ECONOMIC, EMISSIONS IMPACT OF TRUMP ADMINISTRATION FUEL ECONOMY AND GHG EMISSIONS STANDARDS FREEZE; IMPLICATIONS FOR U.S., CALIFORNIA, “SECTION 177” STATES, CANADA}}, institution = {Energy Innovation}, year = {2019}, month = aug, url = {https://energyinnovation.org/wp-content/uploads/2019/08/Impacts-of-Trump-Fuel-Economy-Standard-Rollback-on-US-Section-177-States-Canada-8.7.19.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }