The Slow Progress Towards a national Consensus on CAFE

by Lucas Adin

Among the most reliably contentious issues in the policy arena of late is the topic of global warming and the measures that must be taken to abate it.  Worldwide, the specter of melting icecaps, withering crops, and inundated coastal cities grips the attention of even those only loosely familiar with the mechanics of the climate debate.  Even in the , where a focused national stance on tackling global warming has failed to take hold, policymakers continue to seek the means by which to inject a remedy into the policy stream and start the nation on the road to carbon-free living with minimal impact on economic growth.

Although the targets of global warming related policies cover a variety of energy sources, petroleum has historically attracted the focus of attention for several reasons, not least of which being the fact that the nation depends mostly on imports to satisfy its demand, a situation with considerable economic and national security implications. Since the energy crises of the 1970s, policymakers have wrestled with which methods would reduce dependence on petroleum, although few have been as closely scrutinized as the implementation in 1975 of corporate average fuel economy (CAFE) standards for cars and light trucks.

Opposition to such standards, though ever present over the past three decades, had largely faded to the background as modifications to CAFE have been minimal since the mid 1980s.  However, its detractors assumed a renewed vigor when President Bush announced in his 2007 State of the Union address that he intended to pursue new CAFE standards for passenger cars.  Steady at 27.5 mpg since model year 1985, the President’s stated intention was to raise those standards 37 percent between model years 2010 and 2017 to a new average of 35 mpg and an expected five percent reduction in overall gasoline consumption.  And, as many supporters have pointed out, such an impact would reduce the greenhouse gases emitted from US light-duty vehicles, estimated at 20 percent of total emissions and five percent worldwide. The result was a series of bills proposed in Congress that would achieve new standards to varying degrees, some more aggressively, some substantially less so.

Again the discontent over CAFE has bubbled to the surface, and the arguments against it are familiar.  Many dispute the expected savings in overall fuel consumption, numbers that have been debated since the inception of CAFE.  Opponents have historically argued that any projected gains will be offset by an increase in overall mileage per vehicle.  This phenomenon, usually referred to as the “rebound effect,” essentially states that as drivers buy more efficient vehicles, they’ll tend to increase their driving and the fuel consumed as a result will negate any expected savings from the imposed efficiency standards.  Empirical analysis of driving habits and fuel consumption since 1975 places that offset at an estimated 10 to 20% of expected fuel savings.

However, despite such offsets, there was still a substantial fuel savings between 1975 and 2000, approximately 43 billion gallons based upon an increase of average light-duty fuel economy of 44% during that period according to the National Academy of Sciences 2002 report titled “Effectiveness and Impact of Corporate Average Fuel Economy (CAFÉ) Standards.”  And such a gain could easily be realized again and with no sacrifice to the other elements of concern often addressed by CAFÉ critics, namely sacrifices to vehicle safety and the costs associated with the development of new technologies to meet these standards, which would be passed on in part to the consumers.

On the matter of safety, the dissenters regard CAFÉ as a direct cause of increased highway fatalities since the easiest way to improve fuel economy is to reduce a vehicle’s weight.  Thus, car makers will sell more small cars to improve their fleet standard and consumers will face an increased risk of fatality in a crash.  While this may appear to be a logical argument, since fatality statistics from the National Highway Traffic Safety Administration do show higher fatality rates for small cars than for heavier vehicles, the impact of CAFÉ on the actual number of fatalities is much less clear.  In the section of its 2002 report addressing the safety concern, the NAS stated that “the relationship between fuel economy and highway safety is complex, ambiguous, poorly understood, and not measurable by any known means at the present time.”

The difficulty in establishing this relationship involves such confounding factors as vehicle design, improvements in materials technology, collision avoidance, driver habits, and the relative weights of all vehicles to each other.  Overall, the report concludes that the relationship between fuel economy and safety is tenuous but still must be considered since more drastic measures to improve fuel economy could potentially have significant impacts on vehicle design, which could affect safety.  The President’s proposed standards are not, however, a change extreme enough to present such a risk and can easily be achieved using existing technology without sacrificing changing vehicle weight or potentially sacrificing vehicle safety.

Only a few months after the State of the Union address, the Oak Ridge National Laboratory presented a case based upon data from the 2002 NAS report that such improvements can easily be achieved with proven technology, are cost-efficient at today’s gasoline prices, and will only be aided by other technologies such as hybrids and diesel.  In an effort to create a physical representation of this technological potential, the Union of Concerned Scientists created a theoretical vehicle called the UCS Vanguard that utilizes a combination of all currently existing forms of fuel-saving technologies to reduce fuel consumption.  Although the impetus for the UCS project was to meet the goals of the California Air Resources Board’s proposed reduction in vehicle-related greenhouse gas emissions, the estimated 43 percent reduction in emissions achieved by the Vanguard would be accomplished in large part by achieving fuel economy that exceeds the CAFÉ targets.

The technological methods proposed by the UCS are already utilized in most vehicles in at least one form, if not all.  Most people are probably familiar with many of these features, which include variable valve timing, direct fuel injection, cylinder deactivation, turbo-charging, flexible fuel capability, and advanced transmission designs such as continuously variable transmissions.  Additionally, as computer-aided modeling and simulations have improved, engineers have been able to more accurately determine how to deliver fuel and remove exhaust from an engine in the most efficient manner possible. These advances have done much to reduce vehicle emissions, notably those already controlled by government regulations, such as hydrocarbons and nitrous oxides, and have also contributed to a continual increase in vehicle economy since 1975.

The question then arises as to why the dramatic gains in fuel efficiency that the UCS and others claim have not already been realized.  At the very heart of the answer are the market-driven factors that have influenced the behavior of the automotive industry since its birth.  As key elements of the market changed such as gasoline prices, consumer tastes, and even the demographic makeup of the population itself, the cars and trucks demanded by the market shifted and the automotive industry adjusted to satisfy it, developing technology as necessary to remain within the government’s standards.

The EPA’s annual report “Light Duty Automotive and Fuel Economy Trends” provides an excellent summary of the makeup of the automotive fleet and the specific trends in fuel economy, vehicle characteristics, and technological innovations.  For example, the percentage of the light duty vehicle fleet in the classified as light trucks has increased significantly from 19.4 percent in 1975 to a high of 52.0 percent in 2004, following a trend in declining fuel prices.

However, the best trend analysis can be performed with cars since, unlike light trucks, their fuel economy standard has not changed since 1985.  Since that time, average weight for cars has risen 16 percent and average interior volume by 3 percent while fuel economy per ton and per cubic foot of interior volume have also risen by 19 percent and 5.3 percent respectively, demonstrating that gains in specific efficiency have actually outpaced the growth in vehicle size.  The same trends can be observed with respect to vehicle performance.  From 1985 to 2007, cars on average gained 80 percent more horsepower and were 29 percent faster from zero to 60 miles per hour, all the while remaining within CAFÉ standards.  Overall, cars today are significantly heavier, larger, and faster than they were in model year 1985, all accomplished using important advancements in fuel-saving technology.

Clearly the ability exists to overcome technological hurdles with respect to fuel economy, it is simply a question of how that effort is directed.  Currently fuel economy standards are far lower than those of most other developed nations despite the fact that the automotive industry uses many of the same techniques employed overseas to meet higher standards.  But with a constant standard in the , technology in this market meets the demands of the market and little else.

In the end, the real question is why the US should retain 1985 standards when proposed standards for 2017 could easily be met today and achieving savings in energy that are in the nation’s economic and strategic interests, not to mention the environmental interests of the entire planet.  Now that the stakes are higher than merely the price of a gallon of gasoline, perhaps now is the time that real change can be realized, to the benefit of all concerned.

Email Lucas Adin at



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