Fuel Efficiency Standards Don’t Just Help Curb Climate Change, They Also Create Jobs
The Trump administration’s proposal to freeze automotive fuel efficiency and clean vehicle standards was 515 pages long. It’s pretty easy to hide inconvenient information in a stack of papers nearly the size of the Lord of the Rings trilogy. Here’s an embarrassing one: By the administration’s own estimation, freezing fuel efficiency targets will cost the economy 60,000 jobs by 2030. Unfortunately for the two federal agencies behind the rule, it took reporters only two days to find that stat.
The job losses associated with freezing fuel efficiency standards provides a glimpse into the web of technology that makes each new generation of cars run better than the last. These standards drive innovation, and thus economic growth.
To understand why, it’s important to remember that the federal fuel efficiency standards don’t specify the miles per gallon required of any particular model but rather the minimum average fuel economy of a manufacturer’s entire fleet of vehicles. That’s why they’re called Corporate Average Fuel Economy, or CAFE, standards.
The averaging function means that manufacturers can meet tightening standards in different ways. They can continue to produce inefficient cars, as long as they offset those gas-guzzlers with some superefficient models. Or carmakers can increase the efficiency of their whole fleet through the use of new technologies across the board.
This is where the jobs come in. You’re probably familiar with all the major carmakers, but you might not be able to name the many, many companies—like BorgWarner and Nexteer—that design and produce the 30,000 parts that go into an average car. These lesser-known companies are critical in helping car manufacturers hit their efficiency targets.
When the federal government ratchets up fuel efficiency requirements, the big carmakers issue a challenge to the parts manufacturers: Figure out how to improve fuel economy. The parts engineers compete to find the best and most economical ways to reduce a car’s gas consumption. Then they take their ideas to the major car manufacturers, who pick and choose which technologies to incorporate into the next generation of fuel-efficient cars.
Some of the fuel efficiency innovations are easy enough to understand. Lighter cars require less fuel to move, so carmakers have gradually replaced heavy steel parts with those made from less dense materials. Hoods and doors, for example, are now regularly made of aluminum, which is up to 60 percent lighter than steel. Titanium, carbon fiber, and magnesium alloys are other steel alternatives included in many new cars. Most of these changes have come since Congress adopted the CAFE standards in 1975, showing the important role that fuel efficiency rules play in improving technology.
Start-stop technology is another efficiency innovation. For years, engines in hybrid vehicles like the Toyota Prius have turned off when stopped for more than a few seconds, for example at a traffic light. Now, the technology is being integrated into gasoline-only vehicles. The fuel savings vary according to weather and driving conditions—for example, turning off the engine is more useful in city traffic, where frequent stops are necessary. (It also helps pedestrians breathe a little easier.) But generally speaking, drivers in cars built with this mechanism can see up to a 10 percent improvement in fuel economy.
This innovation would have been unlikely without CAFE standards. Although the concept is simple, start-stop technology requires upgrading a wide variety of car components. The starter itself springs to life 10 times more often than in an older model, and so it must be made more robust. It takes more time for oil to be delivered when the car is constantly turning off, which means engineers had to add self-lubricating parts that wouldn’t wear out while they waited for oil to arrive. It’s a fundamentally different way to make a car, and automakers wouldn’t have done it without a reason.
Gear counts are also changing in response to the CAFE standards. In the early days of automatic transmissions, in the 1950s and ’60s, automatic transmissions usually had only two, and eventually three, gears. A couple of decades later, being in “fifth gear” was a metaphor for working at top speed. Today, eight gears are common—and manufacturers are continuing to innovate, even beginning to produce cars with 10 gears. The higher the gear, the less torque it delivers and the less fuel required to turn it. By adding more gears on the high end, engineers avoid unnecessary power at higher speeds, which means improved fuel efficiency. (Click here for a dry but clear explanation of how automotive gears work.)
Some makers of car parts are experimenting with active aerodynamics: Since engines need less air at high speeds, parts can physically shift while the car is cruising on the highway to decrease air entry and improve aerodynamics. Some cars will also disable some of their cylinders at high speed, constantly alternating which ones are disabled to ensure they all wear at an equal rate. And it’s all because of the incentives created by CAFE standards.
There are a staggering number of jobs associated with car parts manufacturing, and fuel efficiency standards support many of them. Since 2012—the year the Obama administration began increasing the CAFE standards—jobs in automotive components manufacturing have risen by nearly 30 percent, from 748,000 to more than 972,000 today. When you add indirect jobs into the mix—for example, making the steel that goes into the car parts—car parts manufacturing employs more than four million people in the United States.
Freezing the fuel efficiency standards is indefensible from an environmental and health perspective. It’s indefensible from a technological innovation perspective. But it’s also a job killer, plain and simple. Even the Trump administration knows that.
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