Puget Sound Clean Air Agency

Consumer Savings and
Economic Benefits from the New Washington Motor Vehicle Standards

By adopting California’s clean car standards, Washington will benefit from more than just cleaner air, but also:

  • Consumer savings of approximately $2 billion by 2020, and

  • Economic growth throughout Washington and the Pacific Northwest.

A number of new studies show significant consumer savings from regulations requiring automobile manufacturers to use more advanced technologies, many of which are already available and in commercial use. These regulations, referred to as the California Motor Vehicle Program, include both Low Emission Vehicle (LEV II) standards as well as new Greenhouse Gas Emission Standards.

A consortium of businesses, local governments and non-profit organizations recently estimated a savings of over $1.1 billion by 2020 for the Puget Sound region by adopting the California Motor Vehicle Program.1 The state of Washington used calculations similar to California’s to estimate a savings of over $2 billion by 2020 for our entire state.2 These savings are due primarily to fuel savings from the increased fuel efficiency afforded by the new technologies.

Many of the new technologies are already used in cars such as the Chrysler 300, Ford Freestyle, Honda Accord and many more3, enabling these cars to emit less greenhouse gas pollution, particularly carbon dioxide (CO2). These technologies include components like continuously variable transmissions, electric power steering, variable valve timing/lift, cylinder cutout and more efficient air conditioners. The new regulations do not require auto manufacturers to produce vehicles with these or any specific technologies, but cars and light duty trucks must meet strict emission limits on greenhouse gas pollution. Cleaner diesel vehicles could also be used by manufacturers to reduce average fleet CO2 emissions.
The state of California estimates the average consumer will save approximately $2,500 over the lifetime of the vehicle, which will outweigh the additional $1,029 to $1,064 average cost on new cars4. Assuming a new car is financed through a loan, California estimates monthly consumer savings of $3.50 to $7 per month. These estimates assume a gasoline price of $1.74 per gallon, well below expected fuel costs.

Auto manufacturers have argued higher prices for the new technologies with lower return on investments for consumers, but many reviewers do not find their position persuasive. California extensively reviewed the auto manufacturers’ analyses and only slightly adjusted the overall fuel savings from new vehicles5. The savings due to the new standards still far outweigh the costs of additional technologies.

Similarly, history shows that auto manufacturers have consistently overestimated costs regarding new automobile regulations in California. Final costs of regulations are even below government estimates. These conclusions are illustrated in the chart below6:

Chart: costs regarding new automobile regulations in California

Finally, many Washington businesses manufacture advanced electronics and aerospace-related products used in clean car technologies. A study in California shows companies selling semi-conductors, pollution control equipment and information technology have much to gain from the new regulations.7 Similar to the California high-tech industries, Washington companies can expect to benefit from increasing the market for clean car technologies.

Clean car regulations are an overall economic benefit to Washington state and the Puget Sound region. They reduce consumer spending on gasoline, allowing those funds to promote other goods and services, and increase business opportunities for Washington high-tech companies.

1 The Puget Sound Clean Air Agency Climate Protection Advisory Committee (CPAC). Roadmap for Climate Protection: Reducing Greenhouse Gas Emissions in Puget Sound. December 29, 2004.
2 Washington State Office Community Trade and Economic Development. Spreadsheet from G. Nothstein, received January 25, 2005.
3 State of California Air Resources Board. Regulations to Control Greenhouse Gas Emissions from Motor Vehicles. Presentation by C Witherspoon to STAPPA/ALAPCO, October 2004.
4 State of California Air Resources Board. Staff Report: Initial Statement of Reasons for Proposed Rulemaking, Public Hearing to Consider Adoption of Regulations to Control Greenhouse Gas Emissions from Motor Vehicles. August 6, 2004.
5 State of California Air Resources Board.  ARB Staff Testimony Regarding the Greenhouse Gas Standards for Emissions from Motor Vehicles.  Sept. 24, 2004.
6 Data adopted from Hwang R. Comments on the Proposed Adoption of Regulations by the California Air Resources Board (CARB)to Control Greenhouse Gas Emissions from Motor Vehicles. Natural Resources Defense Council. Sept. 23, 2004.
7 Calstart. California’s Clean Vehicle Industry.