It isn't hard to recognize an example of false economy in the average household budget. The vegetable gardener who spends $500 on supplies to produce $12 in produce, the inexpensive home repair that falls apart in a month or the avid shopper who saves $5 online but pays an extra $20 in shipping and handling.
Yet for some reason many of us are blind to the false economy of providing gasoline at the cheapest price possible regardless of its impact on our lives and society. To put it bluntly, humans have been subsidizing the cost of gas by accepting — without direct charge — the air pollution gas-burning vehicles generate.
That's why the draft rules governing the sulfur content of gasoline recently announced by the U.S. Environmental Protection Agency ought to be welcome news regardless of what modest uptick on prices at the pump they may generate. The EPA estimates they will result in 2,400 fewer premature deaths, 23,000 fewer respiratory ailments in children and total annual health care savings anywhere from $8 billion to as much as $23 billion.
The requirements are overdue. The Tier-3 standards as they are known will conform to existing California vehicle emission standards (as well as those widely used in Europe and Asia), which should bring conformity that actually makes it easier on the automobile industry to compete. Reducing the standard of sulfur concentration in gasoline from 30 parts per million to 10 ppm by 2017 is expected to clean the air by as much as taking 33 million cars off the road, according to the Union of Concerned Scientists.
The changes will, however, place additional costs on oil refiners, but exactly how much is a matter of considerable disagreement. The EPA estimates the cost at about a penny a gallon while the oil industry has suggested the number could be closer to 9 cents.
Neither is insignificant — until one considers that air pollution is a real cost, too. The new standard will at least mean that the costs of sulfur in gasoline will no longer be hidden and people will have less of an economic incentive to pollute.
As one might expect, the initial reaction to the regulations fell along partisan lines with Republicans like Rep. Fred Upton, chairman of the House Energy and Commerce Committee, fretting that they will disproportionately hurt the working class. Others even suggested that they will pose a problem for the confirmation of Gina McCarthy, President Barack Obama's nominee to head the EPA.
Please. No doubt there are GOP senators anxious to attack the EPA nominee regardless of who she is or where she stands on most any issue because it fits that party's narrative that EPA regulations are bad for business. The tears shed for the poor also seem to be of the crocodile variety as the working class are the least likely to have health insurance to treat asthma and the other ailments that develop as a direct consequence of high-sulfur gasoline.
While the rules won't find many allies in the oil industry or in the GOP, they are strongly supported by consumer groups, car manufacturers, scientists, labor groups and environmentalists. They are also expected to create jobs — more than 24,000 new jobs supporting the people who make, install and maintain the equipment required by the refineries.
Should consumers relish the prospect of paying slightly more for a gallon of gas? The reality, of course, is that they'll hardly notice it. Price volatility is such the a penny or even two or three is the kind of swing consumers already experience in a day or week. And some predict that what little cost is created won't be passed along to consumers anyway.
Meanwhile, there's a good chance that Americans will be buying less at the pump in the near future. The EPA rules on sulfur in gasoline dovetail nicely with the Obama administration's push for higher fuel efficiency standards and lowered greenhouse gas emissions. Not only will gasoline soon be cleaner but most Americans will be burning less of it, too.
Consumers aren't dummies. Just as keeping down state and federal gas taxes creates a false economy when it causes highways to fall into disrepair, ignoring the health effects of tailpipe emissions has a real cost, too. That you don't see the charge on your monthly credit card bill doesn't make it any less real.Copyright © 2015, CT Now