New EPA Car Labels Should Stick to Facts – Pacific Research Institute

New EPA Car Labels Should Stick to Facts

Vol.4 No.9 September 21, 2010

New EPA Car Labels Should Stick to Facts
By Amy Kaleita, Ph.D., Senior Fellow in Environmental Studies, Pacific Research Institute

Last month, the U.S. Environmental Protection Agency and the Department of Transportation jointly announced that they are considering an upgrade of the energy and environmental information on new-car labels. Potential buyers, unfortunately, won’t find the whole story on the new labels, even though the timing is right.

Major new plug-in electric cars like the Chevy Volt and Nissan Leaf are set to hit the market this fall, and that makes a good case for a labeling change, the first in 30 years. All the factors that go into the total energy and environmental footprints, however, are complicated, interconnected, and often difficult to determine.

One EPA-DOT option is to assign each car a letter grade and the other is to update the current label design to include comparisons of fuel economy and tailpipe emissions of CO2 and smog-related compounds. While the new labels would add information on only some aspects of a car’s environmental impact—energy efficiency and tailpipe emissions—even that is not totally straightforward. For instance, comparing emissions and fuel economy between a plug-in electric and a conventional automobile is difficult. An electric car may have low emissions at the vehicle level, but it still must be charged and therefore contributes to emissions at the power-plant level. That is not true of conventional automobiles, which do not need to be charged but have higher emissions at the vehicle level.

A literal interpretation of fuel economy in miles per gallon of gasoline, which current labeling uses, doesn’t apply to fully electric vehicles, and only captures part of the energy efficiency picture for plug-in hybrids. Better labeling will allow consumers to compare the efficiency of non-traditional vehicles. In order to compare fuel economy for plug-in vehicles, the new labels would convert energy consumption into an equivalent of MPG by considering the kilowatt hours required for a full charge and the miles that could be driven on that charge. In this way, the new labels could provide useful and consistent information to potential buyers. The new labeling, however, would not address the issue of vehicle emissions in the same way.

The federal agencies are proposing that the label include only information about vehicle tailpipe emissions, and in this respect the proposal is decidedly old-fashioned. So-called “upstream emissions” associated with electricity generation or refining fuel would not be on the label. Instead of making the label inclusive, the EPA and DOT say they would develop a website to give consumers more information on non-tailpipe emissions. It’s doubtful that this will really be useful to consumers, given the difficulty of assessing emissions across vehicle categories and the unlikeliness of high consumer interest in checking out a federal government website.

Of the two proposals for redesign, the letter grade approach, in which each vehicle is given an overall efficiency and emissions grade ranging from D- to A+, is the least informative. Given the cross-comparison problem with vehicle emissions, the letter grades are not without an element of subjectivity, since they can’t really reflect a true comparison.

The letter grades would be assigned based on a bell curve of today’s vehicle fleet, centered around a B-. As fuel economy increases with technological improvements, either the average grade goes up, compressing the scale and rendering it less useful, or the rating must be regularly readjusted, making the rating itself too fluid to be of much value. Assigning a letter grade, furthermore, comes across as a value judgment, and in this way the EPA and DOT offer preachiness instead of useful, inclusive information. For the purpose of comparison to current vehicle fleet average and range, numerical values are clearer, more informative, and less subjective.

The two proposals are currently in a 60-day comment period, after which a decision will be made on the new labels. With plug-in cars now on the scene, the EPA and DOT should be commended for their efforts but good motives do not always translate to practical results. To truly inform consumers, any new labeling system should be inclusive, up to date, and stick to the facts.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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