NCPA - National Center for Policy Analysis

National Research Council: Retool CAFE Standards

July 31, 2001

A report from the National Research Council suggests changes to the Corporate Average Fuel Economy (CAFE) program that sets federal fuel economy standards for cars and light-duty trucks. Some of its proposals would provide more flexibility to carmakers.

Each year, automakers are required to achieve an average of 27.5 mpg for their fleet of new passenger cars, and 20.7 mpg for their fleet of new light-duty trucks. Without proposing new numerical fuel economy standards, the committee recommended a slate of improvements:

  • Adopt tradable fuel economy credits that would allow automakers to not only bank accumulated fuel economy credits to offset future CAFE deficits, but to buy and sell credits to other automakers if its fleet of cars or trucks exceeds the standard.
  • Consider attribute-based fuel economy standards, such as vehicle weight -- rather than setting them on the basis of whether a vehicle is a car or a truck. This might encourage manufacturers to decrease the weight of heavier vehicles and perhaps even increase the weight of their lightest vehicles, reducing size disparity and thus enhancing safety.
  • Eliminate the two-fleet rule that currently requires that the average fuel efficiency for domestic and imported fleets be calculated separately.
  • Eliminate dual-fuel vehicle credits for dual-fuel vehicles that can burn ethanol as well as gasoline, which automakers use to offset their less efficient vehicles; because ethanol is being used less than 1 percent of the time in these vehicles, the committee determined the credits have reduced overall fuel economy.
  • Pursue government-industry research and development of new fuel-efficiency technologies in cooperation with the automotive industry.

The CAFE program has had some unintended consequences, the committee noted. For instance, downsizing of automobiles in the 1970s and 1980s may have contributed an additional 1,300 to 2,600 fatalities in 1993.

Source: "Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards," Committee on the Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards, Board on Energy and Environmental Systems, Transportation Research Board, National Research Council (Washington, D.C.: National Academy Press, 2001).

For report text


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