Fuel economy labels for new cars
The feds (Environmental Protection Agency and National Highway Traffic Safety Administration) are designing new fuel economy labels for cars, for the first time in 30 years, and they want you to help them with the design. (My two-cents worth, elaborated below, is cross-posted on Legal Planet.)
The draft design includes the following elements:
- A big prominent letter grade for fuel economy and emissions performance, on a scale of A+ to D (with B- being more-or-less average)
- Five-year savings relative to an “average” vehicle (whatever that is)
- Fuel consumption and fuel economy (city and highway mpg; gallons per 100 miles)
- Emissions (CO2 grams per mile)
- Annual fuel cost
If that’s not enough data for you, the label will also provide a web link with more detailed information.
What is missing in this short list is the one factor that is most important to someone making a long-term vehicle investment decision: How many dollars worth of fuel will the vehicle consume over its entire expected lifecycle? This should technically be a discounted present value, but looking at where the economy and fuel price inflation might be headed after 2012 (when the new labeling rules will take effect), a negative discount factor might be appropriate.
In the interest of truth in advertising, the web info referenced on the label should indicate the Energy Information Administration (EIA) fuel price projections underlying the lifecycle cost estimate, and should provide a comparison of past EIA projections with actual historical fuel prices to give a sense of their reliability. The analysis underlying the new federal CAFE standards assumed a price projection (from EIA) of $3.18/gallon (2007 dollars) in the 2010 to 2030 time frame. To get a sense of the assumptions underlying this estimate, look at Craig Severance’s recent Grist article on peak oil. (Look for “Unidentified Projects” after 2012.)
Disclosing lifecycle fuel costs to consumers is especially important because even with the EIA’s rose-colored $3.18/gallon long-term price projection, the fuel-saving incentive of efficient vehicles could alone be over twice the regulatory incentive of new CAFE standards if lifecycle costs were fully considered. By only giving people information on short-term costs and savings, the fuel-economy labels will just reinforce short-sighted and ill-informed preference choices.
Lifecycle fuel costs should replace item 2 — savings relative to an average vehicle — which is pretty meaningless because you won’t see any vehicle model designated “Average” in the new-car lot. It is also redundant because the letter grade basically tells you whether the car is relatively “Good” or “Bad”.
The emissions value in CO2 grams-per-mile is not likely to impress many buyers. As an average (American) consumer, I can’t relate to grams. I just know that a “gram” is really tiny, so anything measured in grams must be pretty insignificant.
Emissions, like fuel costs, should be reported as a lifecycle aggregate, in tons of CO2. Consumers have a good sense of what “a ton” of something is, so they will get it. A typical car’s lifecycle emissions are on the order of 50 tons.
Comments? Suggestions? Don’t just comment here; cross-post your ideas on the EPA/NHTSA blog, where they might motivate someone to actually do something. Tell them to disclose total lifecycle fuel costs and GHG emissions on fuel economy labels.