02/19/2014 02:41 pm ET Updated Apr 21, 2014

President Obama's Truck Efficiency Is W6: Win-Win-Win-Win-Win-Win

When it comes to climate mitigation opportunities, there is a simple reality: "Benefits outweigh costs ... enormously."

And, when it comes to climate mitigation and adaptation investments, we should be striving to achieve multiple wins from the same action wherever and whenever possible.

When looking at President Obama's announcement, yesterday, of new truck energy efficiency standards, it is clear that the measure meets the criteria of multiple wins.  The fact sheet (see after the fold) title clearly points to this: "Opportunity For All: Improving the Fuel Efficiency of American Trucks - Bolstering Energy Security, Cutting Carbon Pollution, Saving Money and Supporting Manufacturing Innovation"

And, President Obama emphasized that this was a "win-win-win" opportunity in his speech this morning in Maryland.

"...improving gas mileage for these trucks are going to drive down our oil imports even further.  That reduces carbon pollution even more, cuts down on businesses' fuel costs, which should pay off in lower prices for consumers.  So it's not just a win-win, it's a win-win-win.  You've got three wins."

Looking at the fact sheet, there is a quadruple win space laid out:
  • Energy efficient vehicles lower the nation's vulnerability to unstable global oil markets ;
  • Reduced fuel use, by definition, will contributing to lowering greenhouse gas emissions (compared to a business-as-usual case);
  • The upfront investment in more efficient vehicles will be more than compensated for in reduced fuel costs; and,
  • The drive for more efficient trucks, as is happening with automobiles, will spur innovation and increase American competitiveness.
This sounds tremendous... however, as is the case far too often, the proponents of action are yet again understating the full value of action.

This quadruple win actually significantly understates the full value streams as this move is actually a W6: a Win to the Sixth Power climate mitigation action.

As we strive to stop digging the holes deeper and climb our way out, we can seek to deal with these challenges in a stove-piped manner or address them with W6 solutions that have wins across multiple arenas:
  • Support energy independence
  • Create and protect jobs
  • Foster economic activity (cost effectively)
  • Strengthen long-term economic prospects
  • Address negative environmental impacts (from local pollution to acidification of the oceans)
  • Help mitigate climate change
As some are wont to say, crises create opportunities. One good piece of news, amid all the serious concerns that that list above should create for all of us, is the reality that many Win-Win-Win-Win-Win-Win (Win to the Sixth) opportunities lie before us, if we choose to seize them.
Let's look at just a few additional value streams from the move for more fuel-efficient vehicles:
  • Improved health and reduced health care costs:
    • Diesel fumes are directly linked to numerous health problems from irritated eyes, to asthma, to cancer, to ...
      • "Health studies show that exposure to diesel exhaust primarily affects the respiratory system and worsens asthma, allergies, bronchitis, and lung function. There is some evidence that diesel exhaust exposure can increase the risk of heart problems, premature death, and lung cancer."
      • "About 70 percent of the cancer risk that the average Californian faces from breathing toxic air pollutants stems from diesel exhaust particles".  One California study found that "diesel-particle levels measured in California's air in 2000 could cause 540 "excess" cancers (beyond what would occur if there were no diesel particles in the air) in a population of 1 million people over a 70-year lifetime."
    • The National Academy of Sciences estimated in the range of $0.16 per gallon of liquid fuel burnt in health care costs (which includes, by the way, gasoline which has lower health care implications).
      • The White House is estimating 530 million barrels of total fuel savings. Working with the NAS figure, $0.16 per gallon, this translates to $6.72 per barrel or roughly $3.6 billion in health care benefits.
  • Job creation
    • The improved fuel efficiency is an investment -- an investment in 'capital' value.  That additional upfront investment translates into work in design facilities to get to the improved vehicles and in factory jobs to build better trucks.
  • Reduced fuel prices
    • Very basic economic principle: the law of supply and demand.  Reduced demand leads to lower prices.  Lowering US oil demand by 1 million barrels per day will, by definition, foster lower prices than what might have been the case with greater demand. If this is $2.50 per barrel and total US oil use were  15 million barrels per day, then this would have roughly $10 billion in reduced crude oil costs.
  • Economic strength
    • Even amid booming U.S. oil production, there is a simple reality: the United States imports oil.  Reduced oil demand translates directly to an improved balance-of-payments as every barrel of oil saved is, nowadays, roughly $100 less of import costs.
  • Improved trucking efficiency
    • Simply put, keeping all other factors the same, a more energy efficient system will have other efficiency benefits that build on the fuel efficiency. For truckers, this will mean greater flexibility as to when and where to refuel as they will not have to refuel as often.
  • And ...
In his speech today, President Obama highlighted that this is a "win-win-win" opportunity.  In fact, the president and the White House press release left out many wins from the discussion.

PS: As an aside, if there is a single choice, a far better path would be to invest in Steel Interstates and to reduce the need for trucking. See, for example, here, here, and here.