As the Environmental Protection Agency (EPA) moves to weaken federal greenhouse gas (GHG) regulations for light-duty vehicles, Colorado is moving to counter the negative affects to our air quality, reduced consumer fuel savings and the stifling of our budding auto electrification industry, by adopting Advanced Clean Car Standards. When complete, Colorado will join the 13 states that have adopted the Clean Cars standards — which promise to promote technology improvements, create jobs, ensure that American auto manufacturers remain competitive internationally, and lower emissions.

For Colorado, the LEV standard would continue the state’s the path for new passenger cars and light trucks in 2025 to use 37 percent less fuel and emit 35 percent less GHG than cars sold in 2016. Continuing to reduce vehicle emissions is necessary, as the transportation sector is currently the second highest source of pollution in Colorado — and could soon overtake the electricity sector, as our energy is increasingly supplied by renewable sources.

In addition, a recent study by Synapse Energy Economics for the years 2020 through 2035, shows pursuing the ZEV standard would result in a positive, long term economic benefit for the state — to the tune of an increase of about $72 million in consumer spending and 1,700 jobs, annually. Although more modest in the near term, the economic benefits would grow over time, from the cumulative effects of less fuel consumption and as the cost to purchase electric vehicles (EVs) continue to come down.

The study found a key driver in these positive results is due to the fuel savings. The less people spend on fuel, the more they will spend on consumer goods. Table 1 shows, a dollar spent on consumer goods spending results in nearly three times as many in-state jobs as a dollar spent on gasoline. Furthermore, increasing EV adoption and the corresponding shift from gasoline to electricity for fuel causes additional net employment and economic growth, because electrical generation employs more local workers than petroleum production, which is more capital- and import-intensive. Thus, when Coloradans save on gasoline and re-spend their savings elsewhere, they generally increase in-state employment and Gross Domestic Product (GDP).

As expected, when prices for electric vehicles drop — mostly due to reduced cost for the batteries — and the price for gasoline increases, the economic benefits of the Advanced Clean Car Standards increase. Table 2 displays GDP results under various combinations of gas price and EV cost assumptions. Result show there are positive impacts across all sets of gas price assumptions where EV costs are at Base or Low levels.

According to the recent E2 Clean Jobs Colorado report, Colorado is home to more than 2,700 jobs in advanced transportation, including technological innovation in lightweight materials, engine design, aerodynamics, and electric vehicles. With advanced clean car standards, Coloradoans can expect these jobs to increase robustly.

Adopting Advance Clean Cars standards is a smart business-first policy that will drive innovation and jobs, and will save consumers money. The study shows the ever increasing economic benefits would extend to nearly every facet of the Colorado economy. Equally important, the positive economic benefits does not account for any of the emission reduction benefits that are typically a primary goal of fuel economy and EV policies. The good news is these environmental and health benefits can be achieved alongside employment and GDP growth in Colorado.

Susan Nedell is E2’s Rocky Mountains Advocate. Susan has more than 20 years of experience in executive entrepreneurship within the cleantech, aerospace, and software industries.


Advanced Clean Cars Standards Results in Economic Growth for Colorado was originally published in e2org on Medium.