In December 2021, the Environmental Protection Agency finalized a regulation to strengthen its greenhouse gas emission standards for light-duty vehicles. Although regulated automakers support EPA’s approach, a group of states and oil-and-gas companies have challenged the standards in the U.S. Court of Appeals for the D.C. Circuit, claiming that the standards misapply economic principles and violate the major questions doctrine.
In our amicus brief, we explain that EPA’s regulation is consistent with sound economics and established practice. Our brief focuses on three issues. First, we show that EPA’s approach in this regulation—including its use of averaging and trading and the regulation’s effect of increasing electric-vehicle sales—is consistent with prior EPA tailpipe standards. Second, we explain that EPA appropriately relied on the energy efficiency gap to fully value the rule’s consumer fuel savings. And third, we explain that EPA reasonably valued climate damages using the social cost of greenhouse gases estimates developed by a federal interagency working group.