In 2011, the U.S. Department of Transportation (DOT) and Environmental Protection Agency (EPA) proposed joint fuel economy and greenhouse gas pollution standards for new cars and light trucks.

These proposed standards would reach the equivalent of 54.5 miles per gallon (mpg) and 163 grams of carbon dioxide per mile (g/mi) for the average new vehicle in 2025. Hereafter we refer to these proposed joint fuel economy and greenhouse gas pollution standards simply as “the proposed standards.” In this report, we analyze the macroeconomic impacts of the proposed standards with particular attention to the net gain in U.S. employment.

Our analysis finds that the proposed standards will create an estimated 570,000 jobs (full-time equivalent) throughout the U.S economy, including 50,000 in light-duty vehicle manufacturing (parts and vehicle assembly) by the year 2030. Real wages are projected to increase even faster than job growth. This implies that the proposed standards will both lead to new jobs and, on average, higher-paying jobs across the U.S. economy. By 2030, we also find a net increase of about $75 billion in annual Gross Domestic Product (all monetary values in 2010 dollars).

The proposed standards create jobs by helping to save drivers money on transportation fuel through improved average fuel economy over time and increased variety of more fuel-efficient vehicles. These new, more fuel-efficient vehicles are incrementally more expensive due to technology upgrades, but fuel savings are expected to more than outweigh the added cost. Fuel and cost impacts and other assumptions are harmonized with the assessments of the relevant federal agencies to the greatest extent possible.

Listen to audio from the call announcing the report.

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