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  • EPA’s New Rating System Encourages Poor Decisions

    The EPA recently proposed a new grading requirement for new car stickers. The A–D grading system would rank cars according to their fuel efficiency and carbon dioxide emissions to help consumers make better choices. In the new grading scheme, the Ford Focus gets a B and the Toyota Prius gets an A–. What does this tell consumers? As it turns out, not much.

    Already on the new car sticker are two more useful bits of information. The first is the EPA’s estimate of annual fuel cost. For the Focus it is $1,435 per year, and for the Prius it is $804 per year. The second bit of information is the price of the car. Though critical to virtually every consumer, the EPA gives no weight at all to the purchase cost in its grading system. If it did, the grades would be different.

    According to Edmunds.com the expected price, net of discounts, in Washington, D.C., is $14,731 for a Focus SE and $22,451 for the base model Prius. Financing these cars for five years at 5 percent gives a monthly payment of $278 for the Focus and $424 for the Prius. The difference in cost works out to about $1,750 more per year for the Prius. Since the Prius saves only $631 in gasoline per year, the Prius costs the consumer $1,121 more per year.

    But, some would complain, this does not take into account the external cost of the carbon dioxide emissions as they warm the world. Without getting into the global warming debate, we note that those who are worried about carbon dioxide emissions and who make estimates of the costs get values of between about $5 and $30 per ton. Since the EPA estimates that driving a Focus emits 2.9 tons per year more than driving a Prius, the additional carbon dioxide has a cost of $14.50 to $90.00 per year. Even with this bit of environmental bookkeeping, the Prius is still over a $1,000 per year more costly.

    According to the EPA, its new scheme is necessary because the information on fuel use is too difficult for consumers to understand. That seems a very dubious proposition. But suppose the EPA has a target audience too dimwitted to determine whether or not $1,435 is more than $804. It is unlikely this group would be better able to compare prices or to calculate differences in monthly payments. If the EPA is trying to help these consumers, the grading system flunks spectacularly, as it can give a higher grade to worse deal.

    If, on the other hand, the EPA grading scheme is intended to funnel consumers to the preferred choices of environmental wonks, it makes perfect sense.

    Posted in Economics [slideshow_deploy]

    12 Responses to EPA’s New Rating System Encourages Poor Decisions

    1. David Brunjes Lake F says:

      We need less government, especially less bad government. Stop it already!!

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    3. Andrew McDowell, Geo says:

      I find it absurd that the EPA, who is supposed to help us with guidance on protecting the environment, is abdicating the implementation of propulsion systems which will actually be worse for our environment in the long run. Worse they are misleading consumers in their choices concerning automobiles.

      Hybrid vehicles need to be accurately named multi-propulsion vehicles, since they use multiple systems to propel the vehicle. Why is this important? Because all to often the only propulsion system on the vehicle which the EPA addresses is the fossil fuel driven system. They do not provide data related to the environmental impact of non fossil fuel propulsion systems.

      The EPA needs to provide to the prospective purchaser of multi-propulsion vehicles, all the data required to make an effective decision. They need to identify the environmental impact associated with electric propulsion systems, including the replacement and disposal of electronic motors, electronic controllers, and batteries.

      1) Electronic motors may be able to be reclaimed since most of their components are metals, however there are coatings on those metals to protect them from weather conditions, which would pose an impact on the environment during the reclaim process, and currently there is no know cure for this issue.

      2) Electronic controllers are exactly like computers in their assembly and pose the same environmental impact as computer components. They do not degrade as land fill and most contain extremely high amounts of lead solder. The components can not be reclaimed and the support boards are usually coated with a compound for which there is currently no known safe environmental process for de-lamination. The end result for the controllers is that there is no known safe environmental method for their reclamation. They will most likely wind up as simple land fill, which is not an effective method for disposal.

      3) Batteries have some internal components which can be reclaimed, however the processes are far from perfected. Further the costs for reclaim is extremely expensive. Batteries contain large amounts of lead, which if disposed of in land fill could pose a very serious threat to potable water supplies and crop growth.

      Now imagine these issues if they are allowed to grow to a rate of 200 to 400 million over a period of 5 – 10 years, with an annual replacement rate of 20 million per year. The cost of replacement of these components is not mentioned ether. Some estimates I have seen establish the battery cost well in excess of $5000 each, controllers are in the multi thousand dollar range, motors remain in the several hundred dollar range. This means that aging multi-propulsion vehicles, which are using Electronic propulsion systems, will not be attractive as purchase alternatives to the average consumer as they will not posses the means necessary to maintain or repair them. The result will be vehicles which must be scrapped at the end of a life span of less than 7-10 years. The EPA is just not serving the public honestly by not addressing these issues with consumers who wish to purchase multi-propulson vehicles.

      Where the EPA has completely failed the citizens of the United States, is in the relationship of vehicle emissions vs population, and further energy use in general vs population. Its common sense that the more dense the population, the higher the vehicle emissions. Cities are the worst offenders, suburbs are second and rural areas the least. The focus on solutions therefore should follow these lines of logic. The EPA however is currently using a one size fits all solution for the entire country, which is completely ineffective. There is not need to focus on such a vast spectrum as the entire of the United States. The EPA needs to focus on the highest risks first. A simple risk analysis will indicate that the highest risk areas are our densely populated cities. This is where all the focus of the EPA should reside immediately. Further the EPA needs to learn to partner with businesses and municipalities in order to foster lasting solutions to energy and emissions issues. Its not simply enough for them to pass out regulations and sit back and expect results, they must become involved as players in the game, even partial owners in the solutions to the issues. Here are some examples.

      First and foremost the EPA needs to work with private business partners and city municipalities in an effort to redesign how cities integrate and use energy systems. These activities should start immediately and consume 75% of the EPAs focus for the next 10-20 years There simply is no one size fits all solution for each city due to there geographical location and climatic conditions. The transportation systems for these areas needs to integrated with the energy solutions of the respective area.

      Second the EPA needs to work with private industry and local municipalities to help foster energy systems solutions within suburban areas. This focus needs to consume 20% of the EPAs focus rising to 75% after the solutions to cities are completed and implemented. Again the transportation solutions for these areas needs to be in lock step with the energy solutions, however these will be more independent and rely on confidence in the individual more than city solutions.

      Since rural areas provide the least impact to the environment, their focus should be last and least, however they should not be ignored. After solutions have been implemented and shown to be effective in Cities and suburban areas, then the EPA needs to turn its focus toward rural solutions which make effective common sense.

      A long article related to just vehicle sales information, I know, but it is the current shotgun approach by the EPA to energy solutions and transportation solutions within energy solutions that created the initial article. If the EPA stays its current course, we will make little headway as a country in improving our energy solutions for the future. We can not simply turn off one energy source and replace it with solutions country wide who's effectiveness is untried. Our EPA must focus on those areas which make the most logical sense and which reduce the risks to our environment in the most cost effective and reliable ways. A gold mine of opportunity is being ignored by the EPA in not taking this approach to energy and transportation.

    4. Andrew, Rochester NY says:

      Neither the grading system nor your analysis mentions the large amount of CO2 produced by battery production. Including this piece of information in the analysis would show that the initial carbon footprint of a prius is greater than that of a focus. It may produce less carbon dioxide but it has a deeper hole to climb out of.

    5. Jeanne Stotler, Wood says:

      Amen, David, makes you wonder how we lasted all those years when "Big Brother" wasn't telling you what to eat, wear or drive. We managed to get through the depression, WWII and no one told us how, we managed to eat with ration stamps for food, some foods were not available regardless, gas was rationed so we combined our trips and no vacations, we recycled our "Tin cans", papers and magazines, we didn't have plastic our milk came in glass bottles and they were put out for the milkman and taken back to the stores for a deposit refund. These were done for the "War effort". Now we have a gov't agency for everything. Let's go back to what the Gov't was, get rid of all this extra fra fra., just think of the money it'll save.

    6. Randall Holland, Ari says:

      The good socialist government, stepping in to tell me what I must know without actually telling me the truth. Oh, thank you president Obama.

    7. Robert Budach, Wichi says:

      Our government is made up of many people all having good intentions. Look were it has gotten us! We are broke. We have proven good intentions will break our bank. Time to cut government by 5% each year for the next 20 years. This country can no longer afford the EPA, OSHA, and the IRS. Lets buckle down and get back to making our own products.

    8. Bill, Charleston WV says:

      Watch out for the future when this grading system will be used to limit car use in cities, HOV lanes, taxes on fuel, miles driven, etc. This system was used during World War II for good purposes but it can also be misused by government. As is the wont of this present government, it is advancing its agenda by small steps since people would rebel if it tried to reach its true goal all at once.

    9. Billie says:

      EPA’s New Rating System Encourages Poor Decisions”

      Of course it does. And poor decisions lead to crisis, which leads to more government.

      I disagree anything this government is doing is for good intentions. That's just the way they want YOU to see ti. Many solutions and ways to prevent continue to be ignored.

    10. Pingback: The Greenroom » Obama wants to grade your car – and your lifestyle

    11. dannyroberts Phoenix says:

      remember this [ all together now children, um um um Obama ]

      if it wasn't so sad, it would be funny. imagine the mind set of the teachers,that would encourage this ? God help us and our kids

    12. emilyhines1989 says:

      Because all to often the only propulsion system on the vehicle which the EPA addresses is the fossil fuel driven system. They do not provide data related to the environmental impact of non fossil fuel propulsion systems.
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