Congress may soon decide
to increase the standards for fuel economy imposed on
manufacturers of vehicles sold in the United States. This would be a
mistake.
In
1975, Congress reacted to the 1973 oil embargo imposed by the
Organization of Petroleum Exporting Countries (OPEC) by
establishing the Corporate Average Fuel Economy (CAFE) Program
as part of the Energy Policy and Conservation Act. The goal of
the program was to reduce U.S. dependence on imported oil and
consumption of gasoline. Advocates also hoped it would improve
air quality. But the evidence shows that it has failed to meet
its goals; worse, it has had unintended consequences that
increase the risk of injury to Americans. Instead of
perpetuating such a program, Congress should consider
repealing the CAFE standards and finding new market-based
solutions to reduce high gasoline consumption and rising
prices.
There
is significant pressure on Members of Congress, however, not
only to continue this failed program, but also to raise fuel
efficiency standards even higher. The current CAFE standards
require auto manufacturers selling in the United States to
meet certain fuel economy levels for their fleets of new cars
and light trucks (pickups, minivans, and sport utility
vehicles, or SUVs). The standard for passenger cars is
currently 27.5 miles per gallon; for light trucks, it is 20.7
mpg.
Manufacturers face stiff fines for failing to meet
these standards based on the total number of vehicles in each
class sold, but compliance is taken out of their hands. The
government measures compliance by calculating a sales-weighted
mean of the fuel economies for the fleets of new cars and
light trucks a manufacturer sells each year, and it measures
domestically produced and imported vehicles
separately.
Clearly, the CAFE program has failed to accomplish
its purposes. Oil imports have not decreased. In fact, they
have increased from about 35 percent of supply in the
mid-1970s to 52 percent today. Likewise, consumption has not
decreased. As fuel efficiency improves, consumers have
generally increased their driving, offsetting nearly all the
gains in fuel efficiency. Not only has the CAFE
program failed to meet its goals; it has had tragic even if
unintended consequences. As vehicles were being made lighter
to achieve more miles per gallon and meet the standards, the
number of fatalities from crashes rose.
Politicians should stop distorting the marketplace
with unwise policies and convoluted regulations and allow the
market to respond to consumer demand for passenger vehicles.
In addition to free-market considerations, there are other
compelling reasons to reject the CAFE standards. For
example:
- CAFE standards endanger human lives;
- CAFE standards fail to reduce consumption; and
- CAFE standards do not improve the environment.
HOW CAFE INCREASES RISKS TO MOTORISTS
The
evidence is overwhelming that CAFE standards result in more
highway deaths. A 1999 USA TODAY analysis of crash data and
estimates from the National Highway Traffic Safety
Administration and the Insurance Institute for Highway Safety
found that, in the years since CAFE standards were mandated
under the Energy Policy and Conservation Act of 1975, about
46,000 people have died in crashes that they would have
survived if they had been traveling in bigger, heavier
cars. This translates into
7,700 deaths for every mile per gallon gained by the
standards.
While
CAFE standards do not mandate that manufacturers make small
cars, they have had a significant effect on the designs
manufacturers adopt--generally, the weights of passenger
vehicles have been falling. Producing smaller, lightweight
vehicles that can perform satisfactorily using low-power,
fuel-efficient engines is the most affordable way for
automakers to meet the CAFE standards.
More
than 25 years ago, research established that drivers of
larger, heavier cars have lower risks in crashes than do
drivers of smaller, lighter cars. A 2000 study by
Leonard Evans, now the president of the Science Serving
Society in Michigan, found that adding a passenger to one of
two identical cars involved in a two-car frontal crash reduces
the driver fatality risk by 7.5 percent. If the cars differ in
mass by more than a passenger's weight, adding a passenger to
the lighter car will reduce total risk.
The
Evans findings reinforce a 1989 study by economists Robert
Crandall of the Brookings Institution and John Graham of the
Harvard School of Public Health, who found that the weight of
the average American automobile has been reduced 23 percent
since 1974, much of this reduction a result of CAFE
regulations. Crandall and Graham
stated that "the negative relationship between weight and
occupant fatality risk is one of the most secure findings in
the safety literature."
Harvard University's John Graham reiterated the
safety risks of weight reduction in correspondence with
then-U.S. Senator John Ashcroft (R-MO) in June 2000. Graham
was responding to a May 2000 letter distributed to Members of
the House from the American Council for an Energy-Efficient
Economy (ACEEE) and the Center for Auto Safety. Graham sought to
correct its misleading statements, such as its discussion of
weight reduction as a compliance strategy without reference to
the safety risks associated with the use of lighter steel. For
example, an SUV may be more likely to roll over if it is
constructed with lighter materials, and drivers of vehicles
that crash into guardrails are generally safer when their
vehicle contains more mass rather than less. Further,
according to Graham, government studies have found that making
small cars heavier has seven times the safety benefit than
making light trucks lighter.
The
evidence clearly shows that smaller cars have significant
disadvantages in crashes. They have less space to absorb crash
forces. The less the car absorbs, the more the people inside
the vehicle must absorb. Consequently, the weight and size
reductions resulting from the CAFE standards are linked with
the 46,000 deaths through 1998 mentioned above, as well as
thousands of injuries. It is time that policymakers stop
defending the failed CAFE program and start valuing human
lives by repealing the standards.
WHY CAFE FAILS TO REDUCE CONSUMPTION
Advocates of higher CAFE standards argue that
increasing miles per gallon will reduce gas consumption. What
they fail to mention is the well-known "rebound
effect"--greater energy efficiency leads to greater energy
consumption. A recent article in The Wall Street Journal noted
that in the 19th century, British economist Stanley Jevons
found that coal consumption initially decreased by one-third
after James Watt's new, efficient steam engine began replacing
older, more energy-hungry engines. But in the ensuing
years (1830 to 1863), consumption increased tenfold--the
engines were cheaper to run and thus were used more often than
the older, less efficient models. In short, greater efficiency
produced more energy use, not less.
The
same principle applies to CAFE standards. A more
fuel-efficient vehicle costs less to drive per mile, so
vehicle mileage increases. As the author of The Wall Street
Journal article notes, "[s]ince 1970, the United States has
made cars almost 50% more efficient; in that period of time,
the average number of miles a person drives has
doubled." This increase
certainly offsets a portion of the gains made in fuel
efficiency from government mandated standards.
WHY CAFE STANDARDS DO NOT IMPROVE THE
ENVIRONMENT
Proponents of higher CAFE standards contend that
increasing fuel economy requirements for new cars and trucks
will improve the environment by causing less pollution. This
is incorrect.
Federal regulations impose emissions standards for
cars and light trucks, respectively. These standards are
identical for every car or light truck in those two classes
regardless of their fuel economy. These limits are stated in
grams per mile of acceptable pollution, not in grams per
gallon of fuel burned. Accordingly, a Lincoln Town Car with a
V-8 engine may not by law emit more emissions in a mile, or 10
miles, or 1,000 miles, than a Chevrolet Metro with a
three-cylinder engine.
As
noted by the National Research Council (NRC) in a 1992 report
on automobile fuel economy, "Fuel economy improvements will
not directly affect vehicle emissions." In fact, the NRC
found that higher fuel economy standards could actually have a
negative effect on the environment:
Improvements
in vehicle fuel economy will have indirect environmental
impacts. For example, replacing the cast iron and steel
components of vehicles with lighter weight materials (e.g.,
aluminum, plastics, or composites) may reduce fuel
consumption but would generate a different set of
environmental impacts, as well as result in different kinds
of indirect energy consumption.
Nor
will increasing CAFE standards halt the alleged problem of
"global warming." Cars and light trucks subject to fuel
economy standards make up only 1.5 percent of all global
man-made greenhouse gas emissions. According to data published
in 1991 by the Office of Technology Assessment,
A 40 percent
increase in fuel economy standards would reduce greenhouse
emissions by only about 0.5 percent, even under the most
optimistic assumptions.
The
NRC additionally noted that "greenhouse gas emissions from the
production of substitute materials, such as aluminum, could
substantially offset decreases of those emissions achieved
through improved fuel economy."
CONCLUSION
The
CAFE program has failed to achieve its goals. Since its
inception, both oil imports and vehicle miles driven have
increased while the standards have led to reduced consumer
choice and lives lost that could have survived car crashes in
heavier vehicles.
The
CAFE standards should not be increased. They should be
repealed and replaced with free market strategies. Consumers
respond to market signals. As past experience shows,
competition can lead to a market that makes gas guzzlers less
attractive than safer and more fuel-efficient vehicles. That
is the right way to foster energy conservation.
Charli E. Coon,
J.D., is Senior Policy
Analyst for Energy and the Environment in the Thomas A. Roe
Institute for Economic Policy Studies at The Heritage
Foundation.
Endnotes