Investor Group: 54.5 MPG Means 484,000 Jobs
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President Obama has announced an agreement for the next round of fuel efficiency improvements for model year 2017-2025 cars and light duty trucks at 54.5 mpg by 2025.
Now, Ceres, a Boston-based national coalition of investors and public-interest organizations, has released “More Jobs Per Gallon,” an economic analysis by the independent firm Management Information Services Inc. that quantifies what stronger fuel economy and greenhouse gas standards would mean for the U.S. economy.
Obama’s announcement of 54.5 mpg by 2025 means cars would be required to average a 5 percent improvement in fuel economy each year from 2017 through 2025, while trucks would need to rise 3.5 percent a year through 2021. This most closely aligns with the 4 percent per year improvement for CAFE mileage and GHG emission reduction in the Ceres report.
Key findings from the 4 percent scenario are:
* Approximately 484,000 jobs would be created by 2030 (as opposed to nearly 700,000 jobs under 60 mpg).
* 43,000 of those jobs would be in the auto sector (as opposed to 63,000 auto sector jobs under 60 mpg).
* Consumers would save approximately $107 billion at the pump under 54.5 mpg as opposed to $152 billion under 60 mpg.
* Net job gains in 49 states, and greatest job gains under strongest standards.
“We commend the Obama Administration on today’s important step to boost fuel economy and reduce vehicle emissions, which will create jobs, drive innovation, save consumers money and reduce our dependence on foreign oil,” said Mindy S. Lubber, president of Ceres. “Our report makes clear that the stronger the standards, the greater the economic benefits, and we urge the Administration to ensure a strong national program.”
Ceres’ new report, available at www.ceres.org, evaluated different regulatory scenarios under consideration for CAFE mileage and GHG emissions improvements – specifically, improvements of 3, 4, 5 and 6 percent per year for model years 2017-25.
Among the report’s key findings:
* The 6 percent scenario (roughly 60 mpg) would generate an estimated $152 billion in fuel savings for consumers in 2030 compared to business as usual. Of the $152 billion saved at the pump, $59 billion would be expected to be spent in the auto industry as drivers purchase cleaner, more efficient vehicles. The remaining $93 billion will be spent across the rest of the economy, boosting consumers’ discretionary income for everything from retail purchases to restaurant trips to increased spending on health care.
* Nearly 700,000 new full time jobs would be created under the six percent scenario, compared to only about 350,000 jobs under the 3 percent (roughly 47 mpg) scenario.
* 63,000 new, full-time domestic auto industry jobs would be created in 2030 under the 6 percent scenario; more than double the 31,000 jobs under the 3 percent scenario.
* States seeing the biggest gains in terms of relative impact on their job markets also have some of the largest auto industry sectors. Again, job growth would be significantly higher under the six percent scenario. The top 12 states in terms of percentage job increases include Indiana, Michigan, Alabama, Kentucky, Tennessee, Ohio, North Carolina, New Hampshire, Vermont, Oregon, New York and Missouri.
* Net jobs gains in 49 states, and greatest job gains under strongest standards. Each of the four regulatory scenarios analyzed would bring substantial economic and job benefits for the U.S. economy in 2030.
* Effects on state GDPs would be overwhelmingly positive. States seeing the biggest percentage GDP gains under the strongest fuel efficiency standard have large auto industry sectors. The biggest gainers would be Michigan and Indiana, followed by Kentucky, South Carolina, Tennessee, Wisconsin, Iowa, Ohio, Alabama and Oregon. Compared to the three percent scenario, the six percent scenario would bring 382,000 more jobs, a $15.7 billion increase in gross economic output (sales), $10.3 billion more in personal income, and $9.5 billon more in tax revenue for cash strapped federal, state and local governments.
For more details and to read the full report, visit: www.ceres.org/more-jobs-per-gallon
Ceres is a national coalition of investors, advocacy groups and other public interest organizations working with companies to address sustainability challenges such as climate change.