Automotive Fuel Economy How Far Can We Go? (1992) / Chapter Skim
Currently Skimming:
9 POLICIES FOR IMPROVING FUEL ECONOMY
9 POLICIES FOR IMPROVING FUEL ECONOMY
Pages 168-190
The Chapter Skim interface presents what we've algorithmically identified as the most significant single chunk of text within every page in the chapter.
Select key terms on the right to highlight them within pages of the chapter.
From page 168... ...
COMMENTS ON THE EXISTING CAFE SYSTEM Congress has set in place a particular approach -- the CAFE system -- for improving the fuel economy of automobiles and light trucks (15 U.S.C.
|
From page 169... ...
There is some disagreement among analysts as to the impact of CAFE standards in bringing about the change. Some of the increased fuel economy may be attributed, for example, to the impact of rising fuel prices in the late 1970s and early 198Os (see, e.g., Leone and Parkinson, 1990~.
|
From page 170... ...
It may plausibly be armed that the CAFE system, by requiring the manufacturers to produce more fuel-efficient vehicles, in fact prepared the manufacturers to meet the consumer demand that arose for those vehicles as a result of the Increased fuel prices. The late l980s, however, saw a reduction In gasoline prices In real terms.
|
From page 171... ...
Even aggressive CAFE requirements, thus, have a slow impact on overall fuel consumption because of the slow turnover of the vehicle fleet. Moreover, if the standards became so stringent that the cost of automobiles increases significantly or their characteristics (e.g., size, performance)
|
From page 172... ...
Although compliance with CAFE could be achieved by shifting the fleet mix to smaller cars, any such efforts would confront consumer resistance (at least at current fuel prices)
|
From page 173... ...
Any strategy for increasing automotive fuel prices raises important issues of public and political acceptability. If an increase in fuel price were viewed as a tax, significant political costs would likely attend its enactment.
|
From page 174... ...
In sum, the committee does not believe that political concerns about increased taxes should foreclose consideration of a strategy of increasing fuel prices. Indeed, efforts to increase the price of fuel would help to achieve the following important objectives: · Encouragement of Fuel Conservation.
|
From page 175... ...
Although reliance on increased fuel price in lieu of a CAFE system offers many advantages, the following drawbacks to the approach must also be considered: · Economic Disruption. The size of the fuel price increase that would be necessary to achieve fuel savings equivalent to those demanded by aggressive CAFE standards might be quite substantial.
|
From page 176... ...
Sole reliance on increased fuel prices to reduce fuel consumption would diminish the technology-forcing element of the existing CAFE system. Although the increased price of gasoline would create market pressures for the development of technology to improve fuel economy, the rations consumer would demand only those technologies that would pay for themselves through fuel savings.
|
From page 177... ...
Significantly increased fuel prices would induce a reduction in miles traveled and mix shifting by consumers to smaller cars. Thus, although the safety impacts of future downsizing may be uncertain, any safety effects brought about by aggressive CAFE requirements alight also be associated with a strategy of sharply increased fuel prices.
|
From page 178... ...
Other nations have been able to absorb increased fuel prices without significant adverse impacts, and the committee believes that the United States might also accommodate an increase in price. Although the United States may be unique in the degree to which its citizenry relies on the automobile for personal transportation, this fact should not inhibit a pricing strategy for fuel that reflects a larger share of its true costs.22 On balance, the benefits of a policy of increasing fuel prices seem to outweigh the disadvantages.
|
From page 179... ...
Consumers who purchase a vehicle with below-average fuel economy could be charged a fee and consumers who purchase a vehicle with above-average efficiency could be given a rebate.23 Any such system could be revenue neutral; the structure of the fees could be designed to cover the rebates. The "feebate" system could be applied in combination with or in place of CAFEstyle regulation or increased fuel prices.
|
From page 180... ...
There is no reasonable way to impose significantly enhanced fuel economy requirements on vehicles that are three to four years away from sale without imposing very substantial costs -- either very expensive retrofits or price increases to force a mix change. In light of this fact, there is little opportunity by MY 1996 to achieve fuel economy gains that are substantially in excess of those that are already in the product plans of the manufacturers.
|
From page 181... ...
This approach would establish different requirements for different manufacturers and would have the perverse effect of requiring those manufacturers with the best fleet fuel economy in the base year to comply with CAFE requirements in the outlying years that are more stringent than those for manufacturers who had not achieved similar accomplishments. The regulatory system would thus penalize those manufacturers who have exceeded the minimal requirements and thereby discourage any fuel economy accomplishments above the baseline in the future.
|
From page 182... ...
If an attribute or class standard is not imposed on cars and trucks, then a relatively lower CAFE standard may have to be formulated in order to minimize the adverse consequences for full-line domestic manufacturers. Unlike the current CAFE system or the percentage approach, a revised system based on a vehicle attribute does not ensure that a given overall fleet fuel efficiency waif in fact be achieved.
|
From page 183... ...
Currently, these vehicles must comply with significantly more lenient CAFE requirements than automobiles,28 with the consequence that the aggregate fuel economy of the vehicle fleet is compromised by the growth in the light-truck segment. Although trucks and vans used for load-carry~ng or towing functions should have lower fuel economy than cars due to engineering constraints, the evidence suggests that most consumers of certain popular categories of light trucks use these capabilities only occasionally.29 Moreover, the manufacturers have not been required to achieve fuel economy improvements for light trucks that are commensurate with those required of automobiles.
|
From page 184... ...
CAFE Credits The fleet fuel economy achieved by a manufacturer is not completely within the manufacturer's control: It is governed by the mix of vehicles that consumers decide to purchase.3i In light of this fact, it is important that the system provide sufficient flexibility so as to allow the manufacturers to avoid a penalty for shortfalls that are not persistent from year to year. The existing CAFE system provides a measure of flexibility by allowing the carry-forward and carry-back of "credits" for fleet fuel economy that exceeds the CAFE requirements.
|
From page 185... ...
Such a modification of the system, although subtle, would effectively introduce some of the elements of the feebate system within the existing regulatory structure. OTHER POLICIES FOR REDUCING IVEL CONSUMPTION As noted above, the chief purpose of the legislation establishing fuel economy standards was to reduce the consumption of petroleum by cars and light trucks.
|
From page 186... ...
Increasing fuel prices would internalize the costs associated with fuel consumption and would thereby provide appropriate market signals to channel consumer behavior in a direction consistent with societal objectives. ~ A system of fees and rebates that are related to the fuel economy of vehicles might also be considered.
|
From page 187... ...
and increased fuel prices, the available policy instruments include improvements in the transportation infrastructure, intelligent vehicle-highway systems, improved public transit, reduced speed limits, and incentives for car pooling. All such policy instruments should be considered in developing an appropriate federal strategy for reducing petroleum consumption.
|
From page 188... ...
Paper presented at the workshop of the Committee on Fuel Economy of Automobiles and Light Trucks, Irvine, Cali£, July 8-12. American Council for an EnergyEfficient Economy, Washington, D.C.
|
From page 189... ...
1224, The Motor Vehicle Fuel Efficiency Act of 1989. Consumer Subcommittee of the Commerce, Science and Transportation Committee.
|
Key Terms
This material may be derived from roughly machine-read images, and so is provided only to facilitate research.
More
information on Chapter Skim is available.