In the past six months, the price of gasoline in the United States has declined precipitously – from its June peak of $3.63 per gallon to less than $2 in some parts of the country now.
The effect this sharp price decline will ultimately have on greenhouse gas emissions is not yet known, but a reasonable estimate is that emissions will rise as less efficient cars and trucks become popular for the first time in years. Luckily for the climate, stronger federal fuel economy standards will mean that emissions from the transportation sector won’t rise nearly as much as they would have.
Using travel data from the U.S. Energy Information Administration (EIA), monthly vehicle sales data, and fuel economy calculations by Michael Sivak and Brandon Schoetle of the University of Michigan, we calculate that vehicles purchased in last five months will emit 7.8 million more metric tons of greenhouse gases than if car-buying habits before the gas price drop had continued. An average car emits about 43 metric tons of greenhouse gases over its useful life, so the additional emissions are about the same as putting 180,000 new cars and light trucks on the road.
The sudden plunge in gas prices can make it tempting to forget the lessons of the past.
As the U.S. economy began pulling out of the 2008-2010 recession, gas prices rose and $4-plus gasoline became a costly burden for commuters driving a gas guzzler. From October 2007 to June 2014, the fuel economy for the average new car and light truck purchased increased more than 20 percent. This sizeable increase resulted from a number of factors including stronger federal fuel economy standards, stubbornly high gas prices, and consumer awareness.
This last factor can matter most when it comes to the climate. Consumers must value cost savings from more efficient vehicles to achieve serious declines in greenhouse gas emissions from transportation.
The data seemed to indicate we had turned a corner on consumers valuing fuel economy. Unfortunately, the chart below suggests that consumers assume the current fall in gas prices will be sustained for many years.
Once gas prices began to decline in June, following several quarters of strong economic growth and improving jobs reports, Americans rushed to purchase larger and less efficient vehicles. Had previous trends continued, the average new car or light truck sold in December would have gotten 26.2 mpg. Instead we saw a slight drop to 25.1 mpg.
With gas prices expected to be less than $2.60 per gallon in 2015, you can expect more of the same consumer behavior unless the oil market swings the other way. And who can predict which way it will go? As recently as July, EIA forecast that gasoline prices would be $3.38 per gallon in 2015, or 30 percent higher than their current forecast. Uncertainty in the oil market is one of the main reasons policymakers have long tried to encourage consumers to adopt more efficient cars and trucks.
It is difficult for consumers to calculate the total cost of car ownership, especially when it comes to gasoline costs. New fuel economy labels on new cars and trucks try to address this by showing consumers just how much they can save with an efficient vehicle compared to the average new vehicle. And stricter fuel economy standards incrementally improve technology in cars and trucks, saving consumers money in the long run.