Should CAFE Standards Continue To Be Increased

Alejandra Rosiles PS461

September 18, 2017

Should Corporate Average Fuel Economy (CAFE) Standards Continue to be Increased?

Corporate Average Fuel Economy (CAFÉ) Standards are no longer as effective as they once were for the American public and should not be increased. Since Congress’s implementation and regulation of the fuel economy in 1975, there has been a major improvement in vehicles today regarding their gas per mileage. Through the modification of vehicle technology and its fuel economy, CAFE standards have shifted the average MPG from 14.9 in 1980 to 22 in 2015 (U.S. Department of Transportation, National Highway Traffic Safety Administration 2016). However, further increased CAFE standards will not continue this reduction of gas

(U.S. Department of Transportation 2017) The American government was concerned of the overwhelming gas dependency of the nation and found ways to regulate the vehicle industry. In the past 40 years, American manufacturing companies have evolved their vehicle designs to make their products more efficient in MPG. This incentive, produced by energy policy, has allowed consumers to benefit from better products. The technology-based approach has forced automobile companies to comply with more regulation and invest more in the design of the efficiency of their products. Presumably, these are favorable for the consumers save money in gasoline. However, these policies alone leave that same consumer without incentive to drive fewer miles. If their car is more fuel efficient and it costs less for the driver to buy gasoline, there is nothing that induces them to drive less. This is a current subject for the CAFE standards. Instead of equally addressing gas consumption of the consumer and the manufacturer, these regulations are only targeting the vehicle manufacturing companies. If we continue investing in technology advancement, we will marginalize the responsibility of the consumer and localized government to reduce mileage. It seems that the cheapest and most practical method of reducing any usage is not only to use it more efficiently but also to use it less

With the new average at 27.5 MPG for small vehicles, technology advancement isn’t as urgent and instead is now creating more problems than solutions. (Perry, Fischer, Harrington, 2004 p.1) Although the new CAFE standards methods of regulations rid us of some of the previous issues, such as companies making larger vehicles to have lower targets, there remain ways in which these car companies can design cars and aim for lower MPG targets. A new feature about the CAFE standards now is that since 2013, it separates each vehicle individually by footprint (base of the vehicle) in order to obtain more accurate targets for average MPG. (Jensen 2013). However, corporations can still find loopholes in these standards. For example, Jacobsen mentions in his seminar and calls them attribute changes. He exemplifies this with the 2014 Range-Rover with long wheelbase which added 6-8 feet which increases the car’s footprint and he argues that although car companies themselves won’t admit that these changes are easy to make, from an economist perspective, is it a considerably a loophole in the CAFE standards. (Jensen 2014) Overall, these standards still have loopholes but the stricter implantations of them could result in chaotic unintended consequences of the automobile market. One of the most popular concerns from more stringent CAFE standards is the notion that