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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / <strong>Rule</strong>s and Regulations 25345 TABLE I.C.1–6B—NHTSA DISCOUNTED BENEFITS ($BILLION) UNDER THE CAFE STANDARDS (WITH FFV CREDITS, USING A 7 PERCENT DISCOUNT RATE)—Continued 2012 2013 2014 2015 2016 Total Combined .......................................... 11.2 19.3 27.0 36.4 46.9 140.7 NHTSA attributes most of these benefits—about $143 billion (at a 3% discount rate and excluding consideration of FFV credits), as noted above—to reductions in fuel consumption, valuing fuel (for societal purposes) at the future pre-tax prices projected in the Energy Information Administration’s (AEO’s) reference case forecast from the Annual Energy Outlook (AEO) 2010 Early Release. NHTSA’s Final Regulatory Impact Analysis (FRIA) accompanying this rule presents a detailed analysis of specific benefits of the rule. TABLE I.C.1–7—SUMMARY OF BENEFITS FUEL SAVINGS AND CO 2 EMISSIONS REDUCTION DUE TO THE RULE (BEFORE FFV CREDITS) Amount Monetized value (discounted) 3% discount rate 7% discount rate Fuel savings ......................................... 61.0 billion gallons ............................... $143.0 billion ....................................... $112.0 billion. CO 2 emissions reductions ................... 655 mmt .............................................. $14.5 billion ......................................... $14.5 billion. NHTSA estimates that the increases in technology application necessary to achieve the projected improvements in fuel economy will entail considerable monetary outlays. The agency estimates that incremental costs for achieving its standards—that is, outlays by vehicle manufacturers over and above those required to comply with the MY 2011 CAFE standards—will total about $52 billion (i.e., during MYs 2012–2016). TABLE I.C.1–8—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER THE CAFE STANDARDS (BEFORE FFV CREDITS) 2012 2013 2014 2015 2016 Total Passenger Cars ....................................... 4.1 5.4 6.9 8.2 9.5 34.2 Light Trucks ............................................. 1.8 2.5 3.7 4.3 5.4 17.6 Combined .......................................... 5.9 7.9 10.5 12.5 14.9 51.7 NHTSA estimates that use of FFV credits could significantly reduce these outlays: TABLE I.C.1–9—NHTSA INCREMENTAL TECHNOLOGY OUTLAYS ($BILLION) UNDER CAFE STANDARDS (WITH FFV CREDITS) 2012 2013 2014 2015 2016 Total Passenger Cars ....................................... 2.6 3.6 4.8 6.1 7.5 24.6 Light Trucks ............................................. 1.1 1.5 2.5 3.4 4.4 12.9 Combined .......................................... 3.7 5.1 7.3 9.5 11.9 37.5 The agency projects that manufacturers will recover most or all of these additional costs through higher selling prices for new cars and light trucks. To allow manufacturers to recover these increased outlays (and, to a much lesser extent, the civil penalties that some companies are expected to pay for noncompliance), the agency estimates that the standards would lead to increases in average new vehicle prices ranging from $457 per vehicle in MY 2012 to $985 per vehicle in MY 2016: mstockstill on DSKB9S0YB1PROD with RULES2 TABLE I.C.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS (BEFORE FFV CREDITS) 2012 2013 2014 2015 2016 Passenger Cars ................................................................... 505 573 690 799 907 Light Trucks ......................................................................... 322 416 621 752 961 VerDate Mar2010 20:30 May 06, 2010 Jkt 220001 PO 00000 Frm 00023 Fmt 4701 Sfmt 4700 E:\FR\FM\07MYR2.SGM 07MYR2
25346 Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / <strong>Rule</strong>s and Regulations TABLE I.C.1–10—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS (BEFORE FFV CREDITS)—Continued 2012 2013 2014 2015 2016 Combined ...................................................................... 434 513 665 782 926 NHTSA estimates that use of FFV credits could significantly reduce these costs, especially in earlier model years: TABLE I.C.1–11—NHTSA INCREMENTAL INCREASES IN AVERAGE NEW VEHICLE COSTS ($) UNDER CAFE STANDARDS (WITH FFV CREDITS) 2012 2013 2014 2015 2016 Passenger Cars ................................................................... 303 378 481 593 713 Light Trucks ......................................................................... 194 260 419 581 784 Combined ...................................................................... 261 333 458 589 737 NHTSA estimates, therefore, that the total benefits of these CAFE standards will be more than three times the magnitude of the corresponding costs. As a consequence, its standards would produce net benefits of $130.7 billion at a 3 percent discount rate (with FFV credits, $138.2 billion) or $94.5 billion at a 7 percent discount rate over the useful lives of vehicles sold during MYs 2012–2016. 2. Summary of Costs and Benefits of EPA’s GHG Standards EPA has analyzed in detail the costs and benefits of the final GHG standards. Table I.C.2–1 shows EPA’s estimated lifetime discounted cost, benefits and net benefits for all vehicles projected to be sold in model years 2012–2016. It is important to note that there is significant overlap in costs and benefits for NHTSA’s CAFE program and EPA’s GHG program and therefore combined program costs and benefits are not a sum of the individual programs. TABLE I.C.2–1—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS ASSUMING THE $21/ TON SCC VALUE abcd [2007 dollars] 3% Discount rate $Billions Costs ....................................... 51 .5 Benefits ................................... 240 TABLE I.C.2–1—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME DISCOUNTED COSTS, BENEFITS, AND NET BENEFITS ASSUMING THE $21/ TON SCC VALUE abcd —Continued [2007 dollars] 3% Discount rate $Billions Net Benefits ............................ 189 7% Discount rate Costs ....................................... 51 .5 Benefits ................................... 192 Net Benefits ............................ 140 a Although EPA estimated the benefits associated with four different values of a one ton GHG reduction ($5, $21, $35, $65), for the purposes of this overview presentation of estimated costs and benefits EPA is showing the benefits associated with the marginal value deemed to be central by the interagency working group on this topic: $21 per ton of CO2e, in 2007 dollars and 2010 emissions. The $21/ ton value applies to 2010 CO 2 emissions and grows over time. b As noted in Section III.H, SCC increases over time. The $21/ton value applies to 2010 CO 2 emissions and grows larger over time. c Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same discount rate used to discount the value of damages from future emissions (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency. Refer to Section III.H for more detail. d Monetized GHG benefits exclude the value of reductions in non-CO 2 GHG emissions (HFC, CH 4 and N 2O) expected under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO 2 emissions, the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO 2 GHGs will contribute to this rule’s climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference between the social cost of non-CO 2 emissions and CO 2 emissions, and specifies a goal to develop methods to value non-CO 2 emissions in future analyses. Table I.C.2–2 shows EPA’s estimated lifetime fuel savings and CO 2 equivalent emission reductions for all vehicles sold in the model years 2012–2016. The values in Table I.C.2–2 are projected lifetime totals for each model year and are not discounted. As documented in EPA’s Final RIA, the potential credit transfer between cars and trucks may change the distribution of the fuel savings and GHG emission impacts between cars and trucks. As discussed above with respect to NHTSA’s CAFE standards, it is important to note that NHTSA’s CAFE standards and EPA’s GHG standards will both be in effect, and each will lead to increases in average fuel economy and reductions in CO 2 emissions. The two agencies’ standards together comprise the National Program, and this discussion of costs and benefits of EPA’s GHG standards does not change the fact that both the CAFE and GHG standards, jointly, are the source of the benefits and costs of the National Program. mstockstill on DSKB9S0YB1PROD with RULES2 TABLE I.C.2–2—EPA’S ESTIMATED 2012–2016 MODEL YEAR LIFETIME FUEL SAVED AND GHG EMISSIONS AVOIDED 2012 2013 2014 2015 2016 Total Cars .................. Fuel (billion gallons) ...................................... 4 .0 5 .5 7 .3 10 .5 14 .3 41 .6 Fuel (billion barrels) ...................................... 0 .10 0 .13 0 .17 0 .25 0 .34 0 .99 CO 2 EQ (mmt) .............................................. 49 .3 68 .5 92 .7 134 177 521 VerDate Mar2010 20:30 May 06, 2010 Jkt 220001 PO 00000 Frm 00024 Fmt 4701 Sfmt 4700 E:\FR\FM\07MYR2.SGM 07MYR2
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