how the petroleum and GHG reduction goals could be met. It also explored how consumers might react to new technologies. Then the committee compared the technological and economic feasibility of meeting the goals using the available options, the environmental impacts of implementing them, and changes in behavior that might be required of drivers to accommodate new technologies. Finally, the committee examined the policies that might be necessary to implement the scenarios.
Vehicle options are explored in Chapter 2 and fuels in Chapter 3. Chapter 4 discusses factors that will affect consumer choices in considering which vehicles to purchase, and Chapter 5 describes how the scenario modeling was done and the results. Box 1.1 briefly describes the models used in Chapters 2 and 5 and how they were validated.
Chapter 6 discusses policies that could enable the various options and encourage their penetration into the market as needed to implement the scenarios. Finally, Chapter 7 discusses the committee’s suggested policy options that are drawn from Chapter 6. Several current policies are encouraging actions that will reduce GHG emissions and petroleum use. The Corporate Average Fleet Economy (CAFE) standards require vehicle manufacturers to sell efficient vehicles. The Renewable Fuel Standards mandate the use of biofuels. Box 1.2 briefly describes these policies. In addition, tax credits for battery vehicles encourage consumers to buy them. Fuel taxes, carbon reduction measures such as carbon taxes, and other standards and subsidies also could be used. State and local policies may also be important, particularly in the absence of activist federal policies, but the focus of
U.S. Policies Directly Affecting Fuel Consumption
U.S. Corporate Average Fuel Economy (CAFE) Standards
From the mid-1970s through 2010, the United States had one set of standards that applied to passenger cars and another set that applied to light-duty trucks. These standards were administered by the National Highway Traffic Safety Administration (NHTSA) of the U.S. Department of Transportation, following requirements in legislation passed by the U.S. Congress in 1975. They first became effective in the 1978 model year. The standard for passenger cars that year was 18.0 miles per gallon (mpg). The standard increased to 27.5 mpg for the 1985 model year and varied between that level and 26.0 mpg from model year 1986 through model year 1989. In model year 1990 it was raised again to 27.5 mpg and remained at that level through model year 2010. The first combined light truck standard applied to model year 1985 vehicles and was set at 19.5 mpg. The light truck standard ranged between 20.0 and 20.7 mpg between model years 1986 and 1996, remained at 20.7 mpg for model years 1996 through 2004, and increased to 23.5 mpg by model year 2010.
More recently, the federal government implemented two new sets of standards. In 2010, complementary standards were set by the Environmental Protection Agency (EPA) based on greenhouse gas (GHG) emissions and by NHTSA based on fuel economy. NHTSA’s CAFE standard for 2016 was set at 34.1 mpg for cars and light trucks. In 2012, new standards were set by EPA and NHTSA through 2025, although the NHTSA standards for 2022-2025 are proposed and not yet final, pending a midterm review. NHTSA’s CAFE standard for 2025 is 48.7-49.7 mpg. If flexibilities for paying fines instead of complying, flexible fuel vehicle (FFV) credits, electric vehicle credits, and carryforward/carryback provisions are considered, NHTSA estimated that the CAFE level would be 46.2-47.4 mpg. This does not consider off-cycle credits, which could further reduce the test cycle results by up to 2-3 mpg. Thus, for comparison purposes, the committee used 46 mpg as the tailpipe mpg levels comparable to the committee’s technology analyses in Figure 2.1. Also note that on-road fuel economy will be significantly lower—the committee used a discount factor of 17 percent in assessing in-use benefits in Chapter 5. The standards are discussed in more detail in Chapter 5. In particular, see Box 5.1.
Renewable Fuel Standard
The federal Renewable Fuel Standard (RFS) was created under the Energy Policy Act of 2005 because Congress recognized “the need for a diversified portfolio of substantially increased quantities of … transportation fuels” to enhance energy independence (P.L. 109-58). The RFS was amended by the Energy Independence and Security Act (EISA) of 2007 which created what is referred to as RFS2. RFS2 mandates volumes of four categories of renewable fuels to be consumed in U.S. transportation from 2008 to 2022. The four categories are: