What the Repeal of the Endangerment Finding Means and the Economic Ripple Effects
On February 12, 2026, the U.S. Environmental Protection Agency repealed the 2009 “endangerment finding,” which had determined that greenhouse gases pose a threat to public health and provided the legal basis for regulating carbon dioxide emissions from vehicles and other sources under the Clean Air Act. With its repeal, the EPA no longer has authority to regulate greenhouse gas emissions from passenger vehicles under that framework. At the same time, federal EV purchase subsidies and battery production incentives are being scaled back, enforcement of fuel economy standards has weakened, and California and other states (including Maryland) can no longer set EV sales targets.
The shift represents one of the most significant changes to U.S. vehicle policy in more than a decade. In a recent New York Times article examining the rollback, Joshua Linn, professor in the Department of Agricultural and Resource Economics (AREC) at the University of Maryland, described the United States as “an outlier now.” Most industrialized countries continue to tighten vehicle emissions standards and invest heavily in electric vehicles (EVs), while U.S. policy is moving in a different direction. Linn also noted that although trucks and SUVs remain highly profitable for automakers, long-term competitiveness in Europe and East Asia increasingly depends on producing high-quality and low-cost EVs.
The economic implications of these policy reversals were analyzed prior to the repeal in research published on November 3, 2025 by Resources for the Future (RFF). In that study, Linn and coauthor Beia Spiller modeled a scenario in which greenhouse gas standards were weakened (but not eliminated). Their projections showed that weaker standards would reduce vehicle prices and increase manufacturer profits in the short term. However, EV sales would fall substantially, gasoline vehicle sales would rise, and consumers would face higher lifetime fuel costs. When environmental and public health impacts were included, the analysis estimated roughly $33 billion in net societal costs in 2030.
Transportation is the largest source of greenhouse gas emissions in the United States, and vehicle policy shapes fuel costs, manufacturing strategy, air quality, and long-term climate risks that affect agriculture and natural resources. Vehicle standards and related policies influence where companies invest, what technologies are developed, how much households ultimately pay for transportation, and how the United States competes in rapidly evolving global markets. The repeal of the endangerment finding is significant because it reshapes the economic incentives guiding one of the world’s largest industries. It also hampers Maryland’s efforts to accelerate the transition from gasoline vehicles to EVs. As Linn’s research demonstrates, policy design directly influences firm behavior, consumer outcomes, and global competitiveness, and the effects of these decisions will unfold for years to come.
