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Is More CAFE Good for Us?
Some say yes, some say no. For an impartial and thoughtful answer to this
question, Congress turned to the National Academy of Sciences and it just
recently responded with its report on July 31, 2001. Despite its plain black
and white cover, and dry technical format, the Effectiveness and Impact of
Corporate Average Fuel Economy (CAFE) Standards offers some very
informative, and even captivating reading. I highly recommend it for anyone
with a serious, thoughtful interest in learning more about this energy policy
issue. If you can¹t find the time, let me offer you the following highlights.
Should Congress mandate an increase in the fuel economy of our cars, pick-up
trucks, mini-vans and SUVs? The CAFE program has been controversial since the
start. You and I as consumers may say, sure why not, if it doesn¹t increase the
vehicle price, or reduce the performance and features we like such as roomy
interiors for many passengers, storage space, towing capacity, good outward
visibility, and a sense of safety and security. And we also know that not many
good things in life come for free and are suspicious that there may be
drawbacks.
The average fuel economy requirements for new vehicles are currently 27.5 miles
per gallon (mpg) for passenger cars and 20.7 mpg for light trucks. The actual
average miles per gallon for all passenger cars in use - both old and new-
increased from 13.9 mpg in 1975 to 21.4 mpg in 1999, a 54% gain. The actual
average fuel economy of light trucks improved from 10.5 to 17.1 mpg over the
same period, an even better 63% gain. Combined, the average fuel economy of all
light-duty vehicles on the road increased from 13.2 mpg in 1975 to 19.6 mpg in
1999.
No Clear Benefit, but a High Cost
The National Academy of Sciences committee could not determine whether the
improvements in actual fuel economy were the result of the significant gasoline
price increases from 1970 to 1982, of the efforts by car makers to take weight
out of cars as a cost saving measure, of the Gas Guzzler Tax, or of the CAFE
requirements. The benefit they could ascribe to CAFE standards was that they
served more as a floor for foreign manufacturers towards which their fuel
economy descended in the 1990s. The long term trend has been for domestic
manufacturers to begin from a low point and continue to improve their fuel
economy, while imports started with high fuel economy and have dropped as their
cars have gotten bigger.
However, the committee did find that the improvements in the fuel economy of the
nation¹s light duty vehicles have had very real costs. They have resulted in
an additional 1,300 to 2,600 traffic deaths annually. They are also responsible
for an additional 13,000 to 26,000 incapacitating injuries and 97,000 to 195,000
total injuries each year. These are not insignificant numbers that can be
callously dismissed. The problem for motor vehicle safety is that mass and size
vary inversely not only with fuel economy, but also with risk of crash injuries.
When a heavy vehicle strikes an object, the occupants decelerate less rapidly
and are less likely to be injured. Larger interiors also mean more space for
restraint systems to effectively prevent hard contact between the occupants¹
bodies and the structures of the vehicle.
So why Care about Fuel Economy at All?
It is critically important to be clear about the reasons for considering
improved fuel economy. It is tempting to say that improvements in vehicle fuel
economy will save money for us in reduced expenditures for gasoline. Yet a
strong argument can be made that these savings are not a sufficient basis for
public policy intervention. Consumers already have a wide variety of
opportunities if there are interested in better gas mileage. There are many
makes and models, all readily available, that get much better than average fuel
economy. The differences in fuel economy between vehicles are relatively clear
to new car buyers. Fuel economy is prominently displayed on a sticker on the
side of each new car sold. It is easy to see that while improved fuel economy
saves consumers money, they are quite likely to be aware of this fact and in a
good position to exercise their preference for a more fuel efficient vehicle if
that is important to them. But what consumers know is that increases in fuel
economy have sharply diminishing returns. Boosting the fuel efficiency of a car
from 25 to 30 miles per gallon saves $150 a year. Boosting it another 5 mpg
saves only another $100. Note how small these savings are relative to other
costs such as insurance, vehicle registration, and parking.
At first blush, it might also appear that fuel economy is important to reduce
the air pollutants that cause smog. However, automakers are required to meet
emissions standards that are defined in terms of grams of pollutant per mile
traveled. It makes no difference whether a car burns one gallon to go 20 miles
or 10 gallons - the emissions must be the same. The committee observed instead
that the CAFE provision creating extra credits for multi-fuel vehicles have had
a negative effect on fuel economy, petroleum consumption, green house gas
emissions, and cost. It also noted that the Tier 2 emission standards
established by the EPA, and the California low emission vehicle standards are an
impediment to fuel economy gains that could be made with lean-burn gasoline and
diesel engines.
There may be, however, other reasons to increase fuel economy. Are reduced
emissions of carbon dioxide, and reduced dependence on foreign oil worth the
reduced safety costs? U.S. cars and trucks are responsible for only five
percent of the world¹s annual emissions of carbon dioxide. Other sectors,
particularly electricity, have far more potential for reducing CO2 emissions
economically and focusing on transportation alone would accomplish little.
Reducing our nation¹s oil imports would have favorable effects, but is that the
true concern of those who advocate CAFE increases when they are against domestic
oil exploration in Alaska, in much of the West, off of our Atlantic and Pacific
Coasts, and in the eastern Gulf of Mexico?
The National Academy of Sciences report proves that calls for CAFE increases are
simply political grandstanding with little scientific support or public benefit.
If we want to truly do something helpful we should evaluate an approach with
fuel economy targets that are dependent on vehicle attributes, such as passenger
and cargo capacity. We should eliminate the CAFE credits for dual-fuel
vehicles, and we should re evaluate the EPA Tier II emission limits that are a
barrier to advanced technologies such as lean-burn gasoline and diesel engines,
which are already benefiting Europe.