1
INTRODUCTION

In 1990, the U.S. transportation sector accounted for over 25 percent of total U.S. energy consumption (U.S. Department of Energy, 1991; Energy Information Administration [EIA], 1991c).1 Light-duty vehicles (passenger cars and light trucks) account for about 55 percent of the energy demand from the transportation sector. Moreover, light-duty vehicles figure disproportionately in the use of petroleum, consuming an average of over 10 million barrels per day (MMbbl/day) out of the total U.S. consumption of about 17 MMbbl/day (EIA, 1991a). Roughly half of the U.S. demand for petroleum is met with imports, and that fraction is expected to grow.2

In 1975, in the wake of a petroleum supply interruption, Congress enacted the Energy Policy and Conservation Act.3 That statute required that automotive manufacturers selling cars in the United States increase the corporate average fuel economy (CAFE) of their new-car fleet to 27.5 miles per gallon (mpg) in model year (MY) 1985 and thereafter, unless the requirement was relaxed by the Secretary of Transportation. 4 Although the standards required by the act were eventually achieved, U.S. dependence on petroleum, especially on foreign supplies, rose in the 1980s, after dropping significantly between the early 1970s and the early 1980s. U.S. consumption of petroleum grew by 4.8 percent between 1981 and 1990, and the portion met by net imports grew from 36 to 46 percent in the same period (EIA, 1990, 1991c). Moreover, despite the imposition of CAFE requirements, consumption of petroleum by light-duty

1  

In 1990, the United States used nearly 82 quadrillion British thermal units (quads) of energy, of which the transportation sector alone consumed over 22 quads.

2  

As a percentage of the total U.S. trade deficit, the energy component (largely petroleum) increased from 21 percent in 1986 to 50 percent in 1990 (EIA, 1991c). Total net petroleum imports are expected to reach 13 MMbbl/day by 2010, out of total petroleum products supplied of 20 MMbbl/day (EIA, 1991a).

3  

15 U.S.C. §§ 2001 et seq. (1988). Various features of the act are discussed in Chapter 9.

4  

The term model year applies to vehicles produced over an annual production period as determined by the U.S. Environmental Protection Agency (EPA). See 40 C.F.R. § 600.002-85 (1991).



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Automotive Fuel Economy: How Far Should We Go? 1 INTRODUCTION In 1990, the U.S. transportation sector accounted for over 25 percent of total U.S. energy consumption (U.S. Department of Energy, 1991; Energy Information Administration [EIA], 1991c).1 Light-duty vehicles (passenger cars and light trucks) account for about 55 percent of the energy demand from the transportation sector. Moreover, light-duty vehicles figure disproportionately in the use of petroleum, consuming an average of over 10 million barrels per day (MMbbl/day) out of the total U.S. consumption of about 17 MMbbl/day (EIA, 1991a). Roughly half of the U.S. demand for petroleum is met with imports, and that fraction is expected to grow.2 In 1975, in the wake of a petroleum supply interruption, Congress enacted the Energy Policy and Conservation Act.3 That statute required that automotive manufacturers selling cars in the United States increase the corporate average fuel economy (CAFE) of their new-car fleet to 27.5 miles per gallon (mpg) in model year (MY) 1985 and thereafter, unless the requirement was relaxed by the Secretary of Transportation. 4 Although the standards required by the act were eventually achieved, U.S. dependence on petroleum, especially on foreign supplies, rose in the 1980s, after dropping significantly between the early 1970s and the early 1980s. U.S. consumption of petroleum grew by 4.8 percent between 1981 and 1990, and the portion met by net imports grew from 36 to 46 percent in the same period (EIA, 1990, 1991c). Moreover, despite the imposition of CAFE requirements, consumption of petroleum by light-duty 1   In 1990, the United States used nearly 82 quadrillion British thermal units (quads) of energy, of which the transportation sector alone consumed over 22 quads. 2   As a percentage of the total U.S. trade deficit, the energy component (largely petroleum) increased from 21 percent in 1986 to 50 percent in 1990 (EIA, 1991c). Total net petroleum imports are expected to reach 13 MMbbl/day by 2010, out of total petroleum products supplied of 20 MMbbl/day (EIA, 1991a). 3   15 U.S.C. §§ 2001 et seq. (1988). Various features of the act are discussed in Chapter 9. 4   The term model year applies to vehicles produced over an annual production period as determined by the U.S. Environmental Protection Agency (EPA). See 40 C.F.R. § 600.002-85 (1991).

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Automotive Fuel Economy: How Far Should We Go? vehicles grew from 41 percent of total petroleum consumption to 43 percent in the period from 1975 to 1990.5 Although the imposition of CAFE requirements may have diminished the consumption of petroleum below the levels that would otherwise have occurred, the concerns that prompted Congress to enact legislation in 1975 requiring improvements in the efficiency of the automotive fleet remain. Indeed, the recent conflict in the Persian Gulf has reemphasized the fragility of the world's petroleum supply and the importance of reducing U.S. dependence on foreign supply. Moreover, efforts to reduce the consumption of carbon-based fuels now have increasing significance as a result of concerns about global warming. Renewed examination of the opportunities-and means—for reducing petroleum consumption is warranted. FUEL ECONOMY TRENDS SINCE 1975 Between 1975 and 1991 the fuel economy of the average new car improved by roughly 76 percent, from 15.8 mpg to 27.8 mpg (see Figure 1-1). 6 The rate of improvement in fuel economy varied over the period, however. Significant gains were made during the early years, from about 1975 to 1981. More modest gains were made from 1981 to 1988, and declines occurred from 1988 to 1991. The gain in fuel economy resulted from a number of changes to automobiles. Reductions in vehicle weight were accomplished without significant reductions in interior volume (Figures 1-2 and 1-3) by decreasing the exterior dimensions of cars, switching from rear-wheel to front-wheel drive, and using lightweight aluminum and plastic materials. Improvements in engine efficiency (including reductions in the number of cylinders), engine horsepower, and displacement were also made. The introduction of new catalytic systems allowed the design of engines for more efficient operation. In addition, better aerodynamic design, increases in drivetrain efficiency, and reductions in tire rolling resistance and friction losses in general all contributed to increased fuel economy. The decline in fuel economy from 1988 to 1991 of about 0.9 percent per year from its peak of 28.6 mpg in 1988 mainly resulted from increases in the performance and weight of the new-car fleet during the period. The changes in fleet fuel economy were achieved against a backdrop of other changes. As shown in Figure 1-4, the cost of gasoline increased in real terms through 5   Gasoline supplied in 1975 and 1990 was 6.7 and 7.2 MMbbl/day, respectively. Petroleum products supplied in 1975 and 1990 were 16.3 and 17 MMbbl/day, respectively (EIA, 1991c). 6   The level of fuel economy attributed to new vehicles in a given year is associated with a model year, not a calendar year.

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-1 Trends in fuel economy for cars and light trucks. NOTE: No standards were set for model years 1978, 1980, and 1981 for light trucks. SOURCES: Based on Heavenrich et al. (1991) and Oak Ridge National Laboratory (ORNL, 1991).

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-1 Trends in fuel economy for cars and light trucks (continued). NOTE: No standards were set for model years 1978, 1980, and 1981 for light trucks. SOURCES: Based on Heavenrich et al. (1991) and ORNL (1991).

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-2 Trends in average weight for passenger cars sold in the United States, 1975-1991. SOURCE: Based on Heavenrich et al. (1991). FIGURE 1-3 Trends in average interior volume for passenger cars sold in the United States, 1975-1991. SOURCE: Based on Heavenrich et al. (1991).

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-4 U.S. crude oil and gasoline prices, 1976-1989 (based on constant 1988 dollars). SOURCE: ORNL (1991). about 1981, but declined significantly thereafter. Thus, although gasoline prices in the late 1970s seem to have reinforced consumer interest in improved fuel economy,7 the declining real price of gasoline since 1981 has discouraged further improvements. Indeed, because real fuel costs have declined and in any event have become an increasingly smaller component of the annual cost of vehicle ownership and operation (ORNL, 1991), fuel economy now has a low priority in the automobile purchase decisions of consumers.8 In other words, efforts to improve fuel economy are now running against the market. Further, the perception of the late 1970s and early 1980s of the vulnerability of energy supplies has dissipated. 7   Other factors were no doubt involved in the rapid improvement, such as the gasoline lines of the 1970s and the imposition of CAFE standards. 8   Surveys by J.D. Power and others have found that fuel efficiency is given low priority by consumers in automobile purchase decisions. This information was presented to the committee at its workshop in Irvine, Calif., July 8-12, 1991 (see Appendix F); see also, for example, U.S. Department of Transportation (1991).

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Automotive Fuel Economy: How Far Should We Go? The improvements (and recent declines) in fleet fuel economy also occurred in a period of changing consumer interest in the various size classes of cars.9 Subcompacts were of particular interest to consumers in the early 1980s, but consumer interest in such cars has diminished as interest in compact cars has grown (Figure 1-5). Consumer interest in light trucks since the early 1980s has reduced the average fuel economy of the new light-duty fleet (see below). Since 1975, average engine size (displacement) has decreased, especially initially (Figure 1-6). Although engine power also decreased initially (Figure 1-7), it has since increased as technology has allowed significant enhancement of power per unit of displacement (Figure 1-8). The combination of reduced weight and increased power per unit of displacement resulted in improved acceleration performance (shorter acceleration time from 0 to 60 mph), especially during the latter portion of the time period (Figure 1-9). This improved performance reduced the fuel economy that otherwise could have been achieved.10 FIGURE 1-5 Sales fraction by car class. SOURCE : Heavenrich et al. (1991). 9   Size class refers to a system of classification of vehicles applied by the EPA (40 C.F.R. § 600.315-82 [1991]). The classes are defined on the basis of interior volume; most cars fall into the classes defined as subcompact, compact, midsize, and large. The principal light-truck classes that are the focus of this study are small pickup, large pickup, small van, and small utility. 10   The average horsepower-to-weight ratio—another measure of performance capability—is greater now than at any time since 1975.

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-6 Average engine size for passenger cars, 1975-1991. SOURCE: Heavenrich et al. (1991). FIGURE 1-7 Average engine horsepower for passenger cars, 1975-1991. SOURCE: Heavenrich et al. (1991).

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-8 The ratio of horsepower to engine displacement for passenger cars, 1975-1990. SOURCE: Heavenrich et al. (1991). FIGURE 1-9 Performance of passenger cars as measured by time to accelerate from 0 to 60 miles per hour, 1975-1991. SOURCE: Heavenrich et al. (1991).

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Automotive Fuel Economy: How Far Should We Go? Foreign automobiles have captured an increasing segment of the domestic market since 1975. The foreign share of the U.S. passenger-car market grew from 18.2 percent in 1975 to nearly 26 percent in 1990 (Motor Vehicle Manufacturers Association, 1991). The sales-weighted fuel economy of European imports has declined since 1982-1983, and that of Asian imports has declined since 1986 (Heavenrich et al., 1991). These trends are presumably a consequence of increasing sales of compact and midsize automobiles by foreign producers, as well as changes in performance, accessories, and other attributes. Thus, movement by consumers to foreign cars does not necessarily promise to improve fuel economy. The fuel economy of light trucks has followed a path similar to that of automobiles (see Figure 1-1b). Light trucks, however, have lower CAFE requirements than automobiles and have not made the same dramatic gains in fuel economy. The fuel economy of light trucks improved by only 52 percent between 1975 and 1991 (13.7 to 20.8 mpg), compared with a 76 percent increase in that period by automobiles (15.8 to 27.8 mpg). As with cars, engine size decreased between 1975 and 1987 (Heavenrich et al., 1991). Average engine horsepower for light trucks reached a minimum in 1983, but has increased continually thereafter, which is in a direction contrary to improved fuel economy. Moreover, sales of light trucks have grown as a percentage of the light-duty vehicle market—from 19 percent in 1975 to 33 percent in 1991 (Figure 1-10). Because light trucks have lower fuel economy than automobiles, this trend has resulted in a decline in the combined fuel economy of the light-duty fleet to 25.0 mpg in 1991, the lowest level since 1985. The extrapolation of the above trends into the future suggests that the fuel economy of the light-duty fleet is not likely to improve over the next several years. As noted above, the increasing demand for light trucks and greater performance adversely affects fuel economy, as does the increasing average weight of the new-car fleet. Moreover, the next several years will also see new requirements for additional safety equipment and improved emissions control, both of which will add weight and reduce fuel economy.11 In the absence of a supply interruption or some intervention to bring about a change in direction, significant reductions in fuel consumption are unlikely to be achieved in the future. Indeed, despite CAFE requirements, the aggregate annual consumption of gasoline by the fleet of light-duty motor vehicles has increased since the early 1980s (Figure 1-11). 12 11   Moreover, increasing road congestion and any tendency for consumers to keep their cars longer (and hence not to replace fuel-inefficient vehicles) will reduce the aggregate fleet fuel economy. 12   Note that one barrel of petroleum typically yields about one-half barrel of gasoline and the equivalent of one-half barrel of other products. Refiners can adjust these proportions within broad limits, but only at a cost.

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Automotive Fuel Economy: How Far Should We Go? FIGURE 1-10 Car and truck sales by size class, 1975-1991. SOURCE: Heavenrich et al. (1991). FIGURE 1-11 U.S. gasoline consumption, 1960-1990 (excluding small amount of diesel fuel used by some light trucks). SOURCE: EIA (1991b).

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Automotive Fuel Economy: How Far Should We Go? THE COSTS AND BENEFITS OF REDUCED AUTOMOTIVE FUEL CONSUMPTION A variety of costs and benefits are associated with lower fuel consumption by the light-duty fleet. These are briefly described below. Potential Benefits The motivation for limiting automotive fuel consumption stems from the conclusion that the reversal of the current upward trend in fuel consumption and petroleum imports presents benefits to society that are greater than the costs. The potential benefits include the following: Reduced Consumer Expenditures. Higher fuel economy will reduce vehicle operating costs and put downward pressure on gasoline prices, which could result in further savings to the consumer. Conservation of Resources. Petroleum is a depletable resource. The reduction of consumption would preserve petroleum for use by future generations. Enhanced National Security. U.S. concern with potential disruptions in its oil supplies from the major Middle East oil-producing regions has led to military and political involvement in the region. Any limitation of U.S. dependence on imported oil would presumably reduce the need for such activities. Reducing dependence on petroleum imports would also lessen the chances that embargoes could be successfully used as a ''weapon" in disputes with the United States. Enhanced Economic Security. Reductions in fuel consumption would reduce the rate of increase and level of U.S. petroleum imports. This would help to reduce the vulnerability of the economy to disruption due to events in the oil-producing regions of the world. Reduced demand for oil by the United States would also lower fuel costs for consumers throughout the world and thereby provide an economic benefit to society.13 Improved Balance of Payments. Current U.S. purchases of oil from abroad cost about $60 billion per year and, based on current trends, will increase substantially over the coming decades (EIA, 1991a,c). Reduced fuel consumption would reduce the level of imports and exert downward pressure on world oil prices, both of which would help to redress the U.S. balance-of-payments deficit. Improved Environmental Quality. Reduced fuel consumption would reduce emissions of carbon dioxide, thereby reducing the contribution of motor vehicles to the   13   Several analysts have argued that the national security and economic benefits from reduced imports should be reflected by pricing oil higher than its market value. Estimates of the appropriate premium range from near $0 to over $100 per barrel of imported oil (Broadman, 1986).

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Automotive Fuel Economy: How Far Should We Go?   production of greenhouse gases (GHGs).14 Moreover, by reducing the total amount of gasoline that is consumed, hydrocarbon emissions could be reduced throughout the fuel cycle.15 Enhanced Diffusion of Technology. Since the United States is such a large automotive market, strategies to increase the use of fuel-efficient technologies in the United States would help to diffuse such technologies globally. The United States would thereby provide important options for a world that will have to reconcile competing demands for energy, economic growth, and improved environmental quality. Increased Economic Efficiency. If fuel economy improvements can be introduced on a cost-effective basis—that is, if the costs of the technologies to improve fuel economy can be fully captured by reduced operating costs or other benefits—the overall economic efficiency and competitiveness of the U.S. economy would be enhanced.   Potential Costs The achievement of the potential benefits of reduced fuel consumption may impose costs, depending on the strategy by which reduced consumption is achieved. The potential costs include the following: Costs to the Consumer. If the incremental costs of technologies to achieve increased fuel efficiency impose costs to the consumer that cannot be justified by the fuel savings, there is a net economic loss to the consumer. The new vehicle purchaser would have to pay more for a new vehicle, thus decreasing his or her purchasing power for other goods and services, or would have to buy a vehicle with fewer attributes than he or she would otherwise demand. Alternatively, the consumer could choose to continue operating an existing vehicle or to buy a used car, with resulting losses in consumer satisfaction. Impacts on U.S. Automotive Manufacturers. Requirements to increase fuel economy might require new expenditures by some U.S. automotive manufacturers at a time when they are confronting intense competition and are suffering serious financial losses. The increased costs would be passed along to consumers at least in part, which would lead to reduced sales and profits for the manufacturers. The extent and means by which increased fuel economy standards were implemented could also have important differential impacts among the manufacturers, favoring some and harming others. Moreover, automotive suppliers and related industries would also be affected.   14   Gasoline-powered cars and light trucks account for about 57 percent of the GHGs generated by the U.S. transportation sector. This sector as a whole accounts for about 25 percent of total U.S. emissions of GHGs from anthropogenic sources (National Research Council, 1990). 15   The fuel cycle includes the refinery-transportation-sales-vehicle system. Although improved fuel economy may not radically affect hydrocarbon emissions from automobile tailpipes, it will reduce the aggregate demand for gasoline and hence reduce the emissions from other parts of the cycle (DeLuchi et al., 1991).

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Automotive Fuel Economy: How Far Should We Go? Impacts on Employment. The impacts on manufacturers would, of course, affect employment by the manufacturers and their suppliers. Auto workers already are confronting a significant number of plant closings. Safety Impacts. Fuel efficiency might be achieved by reducing vehicle size and/or weight. Moreover, increased manufacturing costs might be reflected in increased vehicle prices, which could result in some shifting of sales toward smaller vehicles. The impact of both of these effects on safety is not easily determined, however, because it depends on a complex set of factors.16 Conservation of Resources. Resources spent on improving fuel economy are unavailable for other activities. Efforts to improve fuel economy standards beyond levels that are economically justifiable would divert resources from other sectors of the economy that might yield gains of greater societal value.   In sum, compelling benefits are associated with efforts to reduce petroleum consumption, but also significant costs. The United States should seek to adopt a national policy that achieves a balance of costs and benefits. Unfortunately, there is little national consensus on the magnitude and significance of the costs and benefits, and hence, there are disagreements as to how best to proceed. For example, some economists argue that the societal costs of the "externalities" associated with the use of gasoline (e.g., national security and environmental impacts) are reflected in the market price and that no additional efforts to reduce automotive fuel consumption are warranted.17 Others argue that the externalities are substantial and that vigorous efforts are necessary and appropriate.18 The committee is not in a position to define the level of fuel economy that in fact achieves a balance of costs and benefits. That determination requires expertise and judgment that extend beyond its capability. Rather, the committee has sought to assess the costs that would be imposed at various levels of fuel economy. It is left to policymakers to assess whether the benefits of reduced fuel consumption are sufficient to justify the imposition of those costs. 16   The relationship of size and weight to safety is discussed in Chapter 3. 17   For example, Michael Boskin, chairman of the Council of Economic Advisers, presented this case to the committee during its workshop in Irvine, California, July 10, 1991. He stated, "It is generally known that economists favor internalizing externalities into the price structure rather than imposing a regulatory structure. You get near unanimity in the economics profession on that. With respect to the price of gasoline, the issue is really what the difference is between social cost and private cost. We already have a substantial amount of taxation at the Federal and State levels and there will be phased in increases in Federal gasoline taxes. … The Administration has no belief that externalities or extra social premiums that ought to be paid go beyond what's already on the books and scheduled to be implemented over the next year or so." 18   Hubbard (1991) has presented a general case for full social-cost pricing of energy. Gordon (1991) discusses an analysis of this viewpoint for the transportation sector. There is a rich literature on estimating externalities, e.g., Bonneville Power Administration (1986); Chernick and Caverhill (1989); Freeman (1979); Hardin (1968); Kneese et al. (1970); Krutilla and Fisher (1975); Maler (1974).

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Automotive Fuel Economy: How Far Should We Go? THE COMPLEXITY OF THE PROBLEM The assessment of the automotive fuel economy that is practically achievable involves a complex set of considerations. These considerations include the following: Technology. The identification of the technologies that could improve automotive fuel economy is one of the primary objectives of this study. Technology forecasting over a period of 15 years is, at best, an uncertain endeavor. The uncertainties include estimating the improvement in efficiency that a given technology will achieve, its cost, its interactive effects with other technologies, its societal impacts (e.g., emissions and safety), and its possible rate of penetration into the market. The longer the time horizon of the projection, the greater the uncertainties become. The evaluation is further complicated by the fact that some of the relevant information is proprietary. Safety. Some fuel economy improvements can be achieved without downweighting or downsizing. As greater fuel economy is sought, however, weight reduction or size reduction may become necessary. Moreover, as the price of vehicles increases, consumers may choose smaller vehicles. These decisions will have safety implications, although the impacts are not easily determined. Radically different inferences have been drawn by different researchers analyzing substantially the same data. Emissions. Automotive fuel economy improvements will reduce the quantity of carbon dioxide emitted per vehicle mile traveled and, by reducing the demand for hydrocarbons, will also reduce the hydrocarbon emissions from the entire fuel cycle. The impact of fuel economy improvements on the emission of other pollutants is not so readily assessed. The cost of new vehicles with higher fuel economy may slow the retirement of older, more polluting vehicles. Increasingly stringent emissions standards, especially for oxides of nitrogen, may preclude highly fuel-efficient technologies, such as advanced diesel, lean-burn, and two-stroke engines, from entering the market. Manufacturers. The domestic automotive industry is mature, cyclical, and competitive. Future profits will likely trail profits in the 1980s because of competitive pressures and expected lower demand for new vehicles. There is a serious question whether existing domestic manufacturers (and, indirectly, their suppliers) can afford the costs of stringent fuel economy standards while making the necessary investments to meet safety, emissions, and marketplace requirements. It is likely that domestic manufacturers will face severe challenges to their large-vehicle market by foreign competitors, especially those from Japan. Since domestic product lines dominate this market segment, competition in the segment will add to the financial pressures on domestic manufacturers. If the level and rate of change of fuel economy standards can only be met with expensive technology that significantly increases the price of cars, automotive sales will be reduced.

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Automotive Fuel Economy: How Far Should We Go?   Employment. The pressures on the domestic manufacturers and their suppliers also have consequences for their workers and are likely to lead to future reductions in domestic employment throughout the industry. Because the automotive sector is important to U.S. employment in other sectors, reductions in sales will have ripple effects throughout the economy. Stringent fuel economy requirements would aggravate these problems. Consumer Behavior. At the current level of gasoline prices, consumers do not consider fuel economy an important priority in their decisions to purchase new vehicles. Indeed, as discussed above, consumers are displaying an increasing interest in improved performance and light trucks. Historically, the preference for larger cars increases with the age of the buyer. Thus, projected U.S. demographic changes that point to a growing proportion of older people in the U.S. population may result in a trend toward larger, but not necessarily higher performance, cars. The need for manufacturers to satisfy consumer demand imposes pressures that conflict with improved fuel economy. Regulatory/Legal Structure. The impacts of policies to increase fuel economy are also affected by the form and nature of any regulatory requirements. The standards imposed may well have important differential effects among manufacturers and between domestic manufacturers and their foreign competitors.   ORGANIZATION OF REPORT In the chapters that follow the committee evaluates the various factors outlined above. Chapter 2 describes the technologies that can result in higher fuel economy, including technologies not currently in wide use. Chapter 3 focuses on occupant safety and its relationship to vehicle downsizing and downweighting. Chapter 4 describes the emissions standards that cars and light trucks must meet and the impact of such standards on improved fuel economy. Chapter 5 describes trends in the automotive industry and the industry's viability, and Chapter 6 describes relevant consumer trends. Chapter 7 presents projections of possible future levels of "technically achievable" fuel economy based on several projection methods. Chapter 8 presents the committee's estimates of "technically achievable" levels of fuel economy by vehicle size class for 2001 and 2006, and discusses the technology, safety, emissions, environmental, and economic considerations that policymakers must consider in arriving at practically achievable levels of fuel economy. Finally, in Chapter 9, the committee comments on the current CAFE regulatory system and suggests improvements and possible alternative approaches.

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Automotive Fuel Economy: How Far Should We Go? REFERENCES Bonneville Power Administration. 1986. BPA Evaluation of Generic Environmental Costs and Benefits Studies. Portland, Oreg. Broadman, H.J. 1986. The social cost of imported oil. Energy Policy June:242-252. Chernick, P., and E. Caverhill. 1989. The Valuation of Externalities for Energy Production, Delivery and Use. Boston: PLC, Inc. DeLuchi, M., Q. Wang, and D.L. Greene. 1991. Motor vehicle fuel economy, the forgotten hydrocarbon control strategy. Oak Ridge National Laboratory, Tenn. In Draft, June 18. Energy Information Administration (EIA). 1990. Annual Energy Outlook with Projections to 2010. DOE/EIA-0383(90). Washington, D.C.: U.S. Department of Energy. Energy Information Administration (EIA). 1991a. Annual Energy Outlook . DOE/EIA-0383(91). Washington, D.C.: U.S. Department of Energy. Energy Information Administration (EIA). 1991b. Annual Energy Review 1990. DOE/EIA-0381(90). Washington, D.C.: U.S. Department of Energy. Energy Information Administration (EIA). 1991c. Monthly Energy Review . DOE/EIA-0035(91/09). Washington, D.C.: U.S. Department of Energy. Freeman, A. 1979. The Benefits of Environmental Improvement. Baltimore, Md.: Johns Hopkins University Press. Gordon, D. 1991. Steering a New Course: Transportation, Energy and the Environment. Cambridge, Mass.: Union of Concerned Scientists. Hardin, G. 1968. Tragedy of the commons. Science 162:1243-1248. Heavenrich, R.M., J.D. Murrell, and K.H. Hellman. 1991. Light-duty Automotive Technology and Fuel Economy Trends Through 1991. Control Technology and Applications Branch, EPA/AA/CTAB/91-02. Ann Arbor, Mich.: U.S. Environmental Protection Agency. Hubbard, H. 1991. The real cost of energy. Scientific American 264(4):36-42. Kneese, A., R. Ayres, and R. d'Arge. 1970. Economics and the Environment . Resources for the Future. Baltimore, Md.: Johns Hopkins University Press.

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Automotive Fuel Economy: How Far Should We Go? Krutilla, J., and A. Fisher. 1975. The Economics of Natural Environments . Resources for the Future. Baltimore, Md.: Johns Hopkins University Press. Maler, K.G. 1974. Environmental Economics—A Theoretical Inquiry. Baltimore, Md.: Johns Hopkins University Press. Motor Vehicle Manufacturers Association. 1991. Facts & Figures '91. Washington, D.C. National Research Council. 1990. Confronting Climate Change: Strategies for Energy Research and Development. Washington, D.C.: National Academy Press. Oak Ridge National Laboratory (ORNL). 1991. Transportation Energy Data Book. 11th ed. ORNL-6649. Oak Ridge, Tenn. U.S. Department of Energy. 1991. National Energy Strategy. First Edition, 1991/1992. Washington, D.C. U.S. Department of Transportation. 1991. Briefing Book on the United States Motor Vehicle Industry and Market, Version 1. Cambridge, Mass.: John A. Volpe National Transportation Systems Center.