| Regulation Regulation
| Policy Briefs Policy Briefs
February 27, 2013

National Highway Traffic Safety Administration Federal Motor Vehicle Safety Standards; Minimum Sound Requirements for Hybrid and Electric Vehicles

Jerry Ellig

The Pedestrian Safety Enhancement Act requires NHTSA to establish a noise standard, so NHTSA could not adopt an alternative approach without a change in the law. Office of Management and Budget Circular A-4, however, instructs executive branch agencies that they should analyze alternatives outside the scope of current law if a better alternative would require a change in the law: If legal constraints prevent the selection of a regulatory action that best satisfies the philosophy and principles of Executive Order 12866, you should identify these constraints and estimate their opportunity cost. Such information may be useful to Congress under the Regulatory Right-to-Know Act.19 Even if NHTSA does not develop a more cost-effective alternative, Congress and the public deserve an accurate assessment of the likely benefits and costs of the proposed rule. An accurate assessment of benefits would (1) acknowledge that benefits to blind and vision-impaired individuals are just a fraction of the figure in the preliminary RIA, (2) recognize that there are no benefits to pedalcyclists at the speeds covered by the regulation, and (3) base any benefit estimates for people with normal vision on research that identifies the causes of hybrid vehicle collisions with such individuals.

The proposed regulation reflects a concern that blind, visually impaired, and perhaps other pedestrians and pedalcyclists are more likely to have collisions with hybrid vehicles when noise from a running internal combustion engine is absent. The Pedestrian Safety Enhancement Act of 2010 requires the National Highway Traffic Safety Administration (NHTSA) to establish minimum noise requirements for hybrid and electric motor vehicles.1 The required “alert sound” must be sufficient for blind and other pedestrians to discern the “presence, direction, location, and operation of the vehicle.”2 The regulation requires that hybrid vehicles produce noise meeting certain standards in scenarios when the internal combustion engine is often not running, such as when the vehicle is turned on but standing still, backing up, or operating at speeds of 18 miles per hour or less.3

The Regulatory Impact Analysis (RIA) calculates monetized benefits of $106.6 million for avoided pedestrian injuries and $115.1 million for avoided pedalcyclist injuries, for total monetized benefits of $221.1 million (plus unquantified benefits resulting from the fact that the sound will aid navigation of visually impaired pedestrians not involved in accidents).4 Since the total cost is estimated at approximately $25 million, the RIA concludes that the benefits exceed the costs at either a 3 percent or 7 percent discount rate.5 Unfortunately, the calculations substantially overstate the prospective benefits of this regulation, for several reasons:

The RIA estimates a reduction in accidents for all pedestrians and pedalcyclists, even though the primary purpose of the regulation is to protect the blind and vision-impaired. Approximately 3.3 percent of the US population is blind or vision-impaired.6 Unless these individuals are a much higher percentage of the population involved in accidents than they are of the general population, the RIA substantially overestimates the number of beneficiaries.
The RIA further overstates benefits for the blind and vision-impaired by including a figure for pedalcyclist injuries. While it is plausible that some pedestrians involved in accidents are blind or vision-impaired, it is unlikely that any appreciable number of pedalcyclists are blind or vision-impaired.
The RIA calculates a reduction in crash rates with pedalcyclists even though it acknowledges that the difference in crash rates with pedalcyclists at the slow speeds covered by the regulation is not statistically significant.
Even if the regulation’s purpose is to protect all pedestrians and pedalcyclists, the RIA assumes without justification that all of the difference in accident rates involving pedestrians and pedalcyclists who are not vision-impaired is caused by the fact that hybrid vehicles are quieter than conventional vehicles.

It is quite possible that the costs of this regulation outweigh the benefits once these factors are taken into account. The Pedestrian Safety Enhancement Act requires NHTSA to establish minimum noise standards, but the accompanying RIA gives Congress and the public a misleading impression of the regulation’s likely effects. NHTSA should correct the RIA to provide more accurate benefit estimates and explore more cost-effective ways of protecting the blind and visually impaired from the danger posed by hybrid vehicles.