August 7, 2012

Federal Motor Vehicle Safety Standards; Electronic Stability Control Systems for Heavy Vehicles

Summary

Score: 33 / 60

Additional details
Agency
Department of Transportation
Regulatory Identification Number
2127–AK97
Agency Name
Department of Transportation
Rule Publication Date
05/23/2012
Comment Closing Date
08/21/2012
Dollar Year
2010, millions

RULE SUMMARY

Regulation establishes a new Federal Motor Vehicle Safety Standard No.136 to require electronic stability control (ESC) systems on truck tractors and certain buses with a gross vehicle weight rating of greater than 11,793 kilograms (26,000 pounds). Electronic Stability Control systems in truck tractors and large buses are designed to reduce untripped rollovers and mitigate severe understeer or oversteer conditions that lead to loss of control by using automatic computer-controlled braking and reducing engine torque output.

COMMENTARY

The standard is recommended based on a benefit-cost study of three different command-and-control options without any serious discussion of why all heavy vehicles have not previously come equipped with Electronic Stability Control technology in recent years or why the industry would not have evolved to make this technology the norm or even come up with better technology. The NPRM has an engineering focus and does not address behavioral responses particularly well.

MONETIZED COSTS & BENEFITS (AS REPORTED BY AGENCY)

Dollar Year
2010, millions
 
Time Horizon (Years)    
Discount Rates
3%
7%
Expected Costs (Annualized)
$113.6
$113.6
Expected Benefits (Annualized)
$341.9 - $422.8
$268 - $336.1
Expected Costs (Total)
Not Reported by Agency
Not Reported by Agency
Expected Benefits (Total)
Not Reported by Agency
Not Reported by Agency
Net Benefits (Annualized)
$228.3 - $309.2
$154.4 - $222.5
Net Benefits (Total)
Not Reported by Agency
Not Reported by Agency

METHODOLOGY

There are twelve criteria within our evaluation within three broad categories: Openness, Analysis and Use. For each criterion, the evaluators assign a score ranging from 0 (no useful content) to 5 (comprehensive analysis with potential best practices). Thus, each analysis has the opportunity to earn between 0 and 60 points.

Criterion Score

Openness

1. How easily were the RIA , the proposed rule, and any supplementary materials found online?
Proposed rule, but not the PRIA, came up immediately on regulations.gov. RIA came up immediately upon search at DOT.gov and on NHTSA.gov .
4/5
2. How verifiable are the data used in the analysis?
Data are mostly documented by naming studies. Safety impacts based on commissioned research (e.g., U of Mich., U of Iowa, Va. Tech) and reports available. CBA data are more assumptive but based on 2009 Value of Statistical Life (VSL) guidelines.
3/5
3. How verifiable are the models and assumptions used in the analysis?
Models and assumptions are clearly laid out with references to many relevant studies. Yaw rates and so forth are detailed for the FR reader along with test maneuvers.
3/5
4. Was the analysis comprehensible to an informed layperson?
Complex models detracted from readability even if the conclusions were clear; models quite complex; engineering approach.
3/5

Analysis

5. How well does the analysis identify the desired outcomes and demonstrate that the regulation will achieve them?
3/5
Does the analysis clearly identify ultimate outcomes that affect citizens’ quality of life?
Analysis identifies reduction in target rollover and LOC (loss of directional control) crashes as a result of the regulation. Proposal results in monetary savings as a result of prevention of property damage, travel delays, and value of life (VSL used) saved. No fuel impact expected; elasticity calculations in RIA for impact on trucking costs and demand for freight services. Modest attention to regulatory management costs reduces score here.
4/5
Does the analysis identify how these outcomes are to be measured?
Agency believes ESC systems could prevent 40 to 56 percent of untripped rollover crashes and 14 percent of loss-of-control crashes. By requiring that ESC systems be installed on truck tractors and large buses, this proposal would prevent 1,807 to 2,329 crashes, 649 to 858 injuries, and 49 to 60 fatalities. Also measures travel delay and damage savings.
4/5
Does the analysis provide a coherent and testable theory showing how the regulation will produce the desired outcomes?
Based on 2006-2008 General Estimates System (GES) and Fatality Analysis Reporting System (FARS), annually, truck tractors and large buses were involved in 201,600 crashes (198,800 non-fatal and 2,800 fatal crashes). These crashes caused 3,721 fatalities and 60,400 non-fatal police-reported injuries. Of these truck tractor and large bus crashes, 13,200 crashes (5,700 first event rollover and 7,500 LOC crashes) would be reduced in impact by the proposal. Consequently, the proposal would potentially further reduce the 415 fatalities and 5,400, non-fatal police-reported injuries that were associated with these rollover and LOC crashes. Surprisingly, there is little to no mention of driver error such as fatigue, or other factors, as possible causes of crashes. Well quantified in its engineering, but many rebuttable assumptions enter, especially cost-benefit projections over population.
3/5
Does the analysis present credible empirical support for the theory?
Rollover and LOC crashes made up a significant portion of truck tractor and bus crashes. In 2006, NHTSA initiated programs to evaluate performance of heavy vehicle stability control systems and to develop objective test procedures and performance measures. NHTSA concluded evidence demonstrates ESC is a crash avoidance countermeasure that would prevent crashes. The Agency tentatively determined that ESC systems can be 28 to 36 percent effective in reducing first-event untripped rollovers and 14 percent effective in eliminating loss-of-control crashes caused by severe oversteer or understeer conditions. Surprisingly, there is little to no mention of driver error such as fatigue as causal factors behind crashes.
3/5
Does the analysis adequately assess uncertainty about the outcomes?
Benefits for target rollover crashes are presented as a range from using a range of ESC effectiveness against the target rollover crashes. By contrast, at the time of publication, there is only one available effectiveness estimate for LOC. Therefore, benefits for LOC are presented as a single point estimate. Considers a range of results from lab-type research. Does not have a keen sense of possibility of random events or changes in freighting unrelated to vehicle rollover.
2/5
6. How well does the analysis identify and demonstrate the existence of a market failure or other systemic problem the regulation is supposed to solve?
1/5
Does the analysis identify a market failure or other systemic problem?
Analysis does not directly identify or discuss a market failure problem but indirectly implies too few vehicles are equipped with ESC technology. No discussion of why so many more cars are equipped with EST technology than heavy trucks and buses. Seems determined to support adoption of ESC rather than analyzing need for regulation.
1/5
Does the analysis outline a coherent and testable theory that explains why the problem (associated with the outcome above) is systemic rather than anecdotal?
Analysis does point out that more vehicles are being equipped with ESC but does not explain why this trend is insufficient to remedy the supposed market failure. Coherency therefore lacking.
1/5
Does the analysis present credible empirical support for the theory?
Analysis presents credible evidence that ESC technology results in fewer crashes, does not directly address what is the optimal level of ESC adoption, and indirectly assumes that it is 100 percent since this is what the regulation proposes.
1/5
Does the analysis adequately assess uncertainty about the existence or size of the problem?
Estimates percentages of vehicles without ESC technology that would be affected by regulation but does not assess it as a range of percentages. Focus is on certainty.
0/5
7. How well does the analysis assess the effectiveness of alternative approaches?
3/5
Does the analysis enumerate other alternatives to address the problem?
The proposal examines three alternatives, including the proposal. Alternatives proposed require less-expensive RSC technology but are variants on stability control.
3/5
Is the range of alternatives considered narrow (e.g., some exemptions to a regulation) or broad (e.g., performance-based regulation vs. command and control, market mechanisms, nonbinding guidance, information disclosure, addressing any government failures that caused the original problem)?
All are command-and-control regulations. No discussion of insurance premiums, fines, or other incentive-structured ways that might reduce crashes.
2/5
Does the analysis evaluate how alternative approaches would affect the amount of the outcome achieved?
Yes.
4/5
Does the analysis adequately address the baseline? That is, what the state of the world is likely to be in the absence of federal intervention not just now but in the future?
Projected model year 2012 installation rates serve as baseline compliance rates, and NPRM assumes these ESC-equipped vehicles would all comply with the proposed test. Benefits and costs of the proposal reflect increasing ESC installation rates from 26 percent in truck tractors and 80 percent in large buses to 100 percent in both vehicle types. Although analysis indicates that more vehicles have been equipped with ESC technology over time, this analysis assumes all will be in compliance when the regulation takes effect. Baseline is an extrapolation showing continued adoption at current rates rather than modeled or tested profile.
3/5
8. How well does the analysis assess costs and benefits?
4/5
Does the analysis identify and quantify incremental costs of all alternatives considered?
The ESC system cost is estimated to be $1,160 (in 2010 dollars) per vehicle, which includes all the components for ESC and the ESC malfunction telltale. The total incremental cost of the proposal (over the MY 2012 installation rates and assuming 150,000 unit truck tractors and 2,200 large buses sold per year) is estimated to be $113.6 million to install ESC and malfunction indicator lamps. The average incremental cost is estimated to be $746 per vehicle. Similar cost estimates are made relating to two alternatives to the ESC proposal.
4/5
Does the analysis identify all expenditures likely to arise as a result of the regulation?
Adoption of ESC technology is estimated for case of 100 percent adoption and compliance, but direct costs of regulation inadequately considered as there is no attention to the administrative agency's costs of running the regulation.
3/5
Does the analysis identify how the regulation would likely affect the prices of goods and services?
Costs are assumed to be entirely passed onto buyers of new vehicles, but analysis does not indicate if buyers of vehicles will pass on their costs to their customers. Discusses change using a range of elasticity measures for vehicle costs and freight use, but "identify" is a bit too strong a description. "We don’t have a specific elasticity for large buses."
2/5
Does the analysis examine costs that stem from changes in human behavior as consumers and producers respond to the regulation?
NHTSA believes costs are insignificant, thus leading to little to no behavioral changes other than perhaps lowering new vehicle sales by less than 400 units. Annual basis for calculations is itself a giveaway that behavioral changes neglected.
2/5
If costs are uncertain, does the analysis present a range of estimates and/or perform a sensitivity analysis?
Range of costs (e.g., incremental ESC and ESC) are estimated under two discount rates, different relative fatality ratios, and low and high estimates. Alternative engineering assumptions explored. Loss of control impacts effectively treated as certain: "at the time of publication, there is only one available effectiveness estimate for LOC."
4/5
Does the analysis identify the alternative that maximizes net benefits?
The proposed rule exhibits the largest net benefit range of the three alternatives, but benefit calculations are poor owing to the use of economic variables borrowed from other studies.
4/5
Does the analysis identify the cost-effectiveness of each alternative considered?
Range of net cost per equivalent life saved are shown for proposed regulation and for two alternatives not proposed; Alternative 1 is slightly more cost-effective and lower in total costs than the proposal, but would save fewer lives and accrue lower net benefits. Alternative 2 would save even fewer lives than Alternative 1 and is significantly less cost-effective than both the proposal and Alternative 1 and would produce negative net benefits. Really a cost-effectiveness study anyway and so better here.
5/5
Does the analysis identify all parties who would bear costs and assess the incidence of costs?
Reasonably comprehensive in identifying impacts on manufacturers, operators, and users such as bus passengers. The agency assumes costs fully passed on to consumers, which are trucking companies and bus transit companies of vehicles. Agency believes additional cost per vehicle of $1,160 for ESC is a business expense having little bearing on the demand for new trucks or large buses. The added weight from ESC, which consists primarily of electronic sensors and wiring, is insignificant relative to the 11,793 kg (26,000 pounds) plus weight of the truck tractors and large buses. Consequently, the increase in fuel use is considered to be negligible. Compliance costs are assumed to not exert a significant impact on a significant number of small businesses.
4/5
Does the analysis identify all parties who would receive benefits and assess the incidence of benefits?
Reasonably comprehensive and identifies impacts on manufacturers, operators, and users such as freight customers: examines saved lives, reduced property damage, and travel delay associated with crashes. Overall, the rule would save $13.9 to $17.8 million at a 3 percent discount rate or $11.0 to $14.1 million at a 7 percent discount rate in property damage and travel delay. The proposal is expected to have positive economic impacts on ESC manufacturers.
4/5

Use

9. Does the proposed rule or the RIA present evidence that the agency used the analysis?
PRIA has been used by agency to choose proposed regulation over two other options, but there is a sense of pressing on from the finding that electronic stability control saves lives to the conclusion that it should be mandated.
3/5
10. Did the agency maximize net benefits or explain why it chose another alternative?
Its proposed rule is the one with highest net benefits of the three considered; however, options other than command-and-control were not considered, thus bringing into question if it chose the optimal regulation. Benefit cost analysis poor in places though.
4/5
11. Does the proposed rule establish measures and goals that can be used to track the regulation's results in the future?
The rule requires manufacturers to equip their vehicles with ESC and to certify that their products comply with the standard. PRIA states that there is no record keeping for this proposal. However, agency should be able to examine if perfect compliance results in significant reduction in crashes over time. But nothing explicit here.
1/5
12. Did the agency indicate what data it will use to assess the regulation's performance in the future and establish provisions for doing so?
No mention, but data will be available for a retrospective evaluation.
1/5
 
Total 33 / 60