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![News from The National Academies]()
Date: July 31,
2001
Contacts: Jennifer Wenger, Media
Relations Associate
Cory Arberg, Media
Relations Assistant
(202) 334-2138;
e-mail <news@nas.edu>
FOR
IMMEDIATE RELEASE
Federal Fuel
Economy Standards Program Should Be Retooled
WASHINGTON -- Although the federal program that sets fuel
economy standards for cars and light-duty trucks has helped reduce
U.S. dependence on imported oil and lower emissions of greenhouse
gases, changes to the program could further cut the nation's
petroleum dependence and provide more flexibility to carmakers, says
a new report from the National Academies' National Research
Council.
"There are pros and cons to
tightening fuel economy standards, involving a range of trade-offs,"
said Paul Portney, chair of the committee that wrote the report and
president of Resources for the Future, Washington, D.C. "Making
these trade-offs is a task that rightfully resides with elected
officials. However, no matter what Congress decides regarding
specific fuel economy targets, our committee is adamant that changes
should be made to shore up deficiencies in the
program."
The committee recommended a
slate of improvements, ranging from the adoption of tradable fuel
economy credits, to the elimination of the "two-fleet" rule that
currently sets standards separately for domestic fleets and
imports.
Known as the Corporate
Average Fuel Economy (CAFE) standards, the program dictates the
average miles per gallon (mpg) that passenger cars and light-duty
trucks sold in the United States must attain. Established by the
Energy Policy and Conservation Act in 1975, the standards were
designed largely to reduce U.S. dependence on foreign oil. 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. Light-duty trucks initially represented
pickups and cargo vans, but now include minivans and sport utility
vehicles (SUVs).
With the nation's
overall fuel economy slipping for more than a decade, Congress asked
the National Academies to study the effects that CAFE standards have
had over the past 25 years, as well as effects that potential
changes to the program might have.
The CAFE program has had some unintended consequences,
the committee said. As consumers have begun buying more and more
minivans, SUVs, and pickup trucks, the overall average fuel economy
of new vehicles has dropped because the larger, heavier vehicles
have less stringent standards to meet than passenger cars. In 2001,
sales of minivans, SUVs, and pickups are expected to exceed sales of
passenger cars for the first time ever.
Some technologies already in existence today could
significantly reduce fuel consumption of new cars over the next 15
years, with light-duty trucks having the greatest potential
reductions. These technologies, which would increase the purchase
price of new cars and trucks, include engine advances that reduce
friction, such as variable valve timing, and more efficient
powertrains, such as five-speed automatic transmissions. Using a
variety of economic assumptions, the committee also identified
combinations of technologies that would produce gasoline savings
sufficient to offset the increased cost of these technologies.
However, it could take decades before new, more fuel-efficient
vehicles have replaced the 200 million cars currently on the
road.
To improve a car's fuel
economy, one of two things must happen: The efficiency of the
powertrain must be increased through new technologies, or the amount
of work required by the engine to move the car must be lowered,
usually by lessening wind resistance or by reducing the car's size
and weight. But one risk of downsizing is that smaller cars involved
in crashes with larger vehicles tend to have higher numbers of
fatalities. The committee estimated that the downsizing of
automobiles in the 1970s and 1980s – whether a result of CAFE
standards or other market-driven needs -- may have contributed an
additional 1,300 to 2,600 fatalities in 1993. However, this area is
quite controversial among analysts and the report includes a
dissenting opinion written by two committee members. They believe
that the relationship between fuel economy and safety is not yet
fully understood, and a reduction in vehicle weight need not
adversely affect safety. The committee feels more analysis in this
area is warranted and calls on the National Highway Traffic Safety
Administration to conduct further research.
After exhaustive examination, the committee said that to
correct structural flaws in the CAFE program, policy-makers
should:
Adopt tradable fuel
economy credits – Current CAFE
guidelines allow an automaker to accumulate fuel economy credits if
its fleet of cars or trucks exceeds the standard. These credits can
be bankrolled and used to offset future CAFE deficits. This system
should be expanded so that credits can be sold to other automakers
or bought from the government to bring their fleets into compliance.
Under this scheme, the ability for automakers to profit from each
gain in efficiency would motivate them to continue making
improvements even if their fleet's average fuel economy exceeded
federal targets. It also would reveal information about the costs of
fuel economy improvements and promote better informed policy
decisions. This approach already has met with success in reducing
sulfur emissions from coal-fired electrical power
plants.
Consider switching to
attribute-based standards – Instead of
setting fuel economy standards on the basis of whether a vehicle is
a car or a truck, standards could be matched with certain
attributes, such as vehicle weight. A weight-based system that
encourages car manufacturers to downsize their largest vehicles
could ultimately reduce the enormous variance between large and
small vehicles.
For example, vehicles
under 4,000 pounds, which would include most cars and some
light-duty trucks, could be required to meet fuel economy standards
that depend on their weight. Vehicles exceeding 4,000 pounds could
be required to meet one particular fuel economy standard regardless
of weight to encourage downsizing and greater fuel efficiency. Some
light-duty trucks weigh more than 8,500 pounds. If such an approach
were adopted, manufacturers would be encouraged to decrease the
weight of heavier vehicles and perhaps even increase the weight of
their lightest vehicles. The size disparity among vehicles on the
road would be diminished and safety enhanced.
Eliminate the two-fleet rule
– CAFE standards require that the
average fuel efficiency for domestic and imported fleets be
calculated separately, with domestic fleets being defined as models
that are made with at least 75 percent domestic parts. This
two-fleet rule should be abandoned, the committee said. Not only has
the global marketplace rendered these designations obsolete, but the
committee found no evidence that U.S. autoworker jobs were affected
positively or negatively by this system, which was the initial
reason for the distinction.
Eliminate dual-fuel vehicle credits -- CAFE provides fuel economy credits to dual-fuel
vehicles, which can burn ethanol as well as gasoline. However,
ethanol is being used less than 1 percent of the time in these
vehicles. Because automakers can use these credits to compensate for
their less efficient vehicles, the committee determined that the
credits have had a negative effect on overall fuel
economy.
Pursue
government-industry research and development -- The government should continue funding research and
development of new fuel-efficiency technologies in cooperation with
the automotive industry. Those that warrant further study include
hybrid vehicles, advanced engines and emission-control systems, and
fuel cells. Some technologies, such as diesel and "lean-burn"
gasoline engines, contribute considerably to fuel economy in Europe
and other countries, but their implementation faces challenges in
the United States because of pending emissions regulations that are
more stringent.
Despite its flaws,
the CAFE program has significantly reduced U.S. gasoline consumption
by first contributing to a rise in fuel economy and, in recent
years, by maintaining fuel economy levels, even during periods when
oil prices were dropping and demand for fuel-efficient cars and
trucks was low, the committee said. Consequently, gasoline
consumption is down roughly 2.8 million barrels of gasoline per day
from where it would be in the absence of CAFE standards. This
savings also has affected greenhouse gas emissions, translating to a
7 percent reduction in carbon dioxide release.
The committee also noted that there is a marked
inconsistency between pressing automobile manufacturers for improved
fuel economy from new vehicles on the one hand, and insisting on low
gasoline prices on the other. Higher gas prices would create a
demand for more fuel-efficient vehicles and an incentive for owners
of existing vehicles to drive them less.
The study was sponsored by the U.S. Department of
Transportation. The National Research Council is the principal
operating agency of the National Academy of Sciences and the
National Academy of Engineering. It is a private, nonprofit
institution that provides science and technology advice under a
congressional charter.
A committee
roster follows.
Read the full
text of Effectiveness and Impact of Corporate Average Fuel
Economy Standards for free on the Web, as well as
more than 1,800 other publications from the National Academies.
Printed copies are available for purchase from the National Academy Press Web
site or by calling (202) 334-3313 or 1-800-624-6242.
Reporters may obtain a pre-publication copy from the Office of News
and Public Information (contacts listed above).
NATIONAL RESEARCH
COUNCIL
Division on Engineering and
Physical Sciences
Board on Energy and
Environmental Systems
and
Transportation Research Board
Committee on Effectiveness and Impact of Corporate
Average Fuel Economy (CAFE) Standards
Paul R. Portney (chair)
President
Resources for the
Future
Washington,
D.C.
David L. Morrison (vice
chair)
Director
Office of Nuclear Regulatory Research
U.S. Nuclear Regulatory Commission
(retired)
Cary, N.C.
Michael M.
Finkelstein
Principal
Michael Finkelstein & Associates
Washington, D.C.
David
L. Greene
Corporate
Fellow
Oak Ridge National
Laboratory
Knoxville,
Tenn.
John H.
Johnson
Presidential
Professor
Department of Mechanical
Engineering-Engineering Mechanics
Michigan Technological University
Houghton
Maryann N.
Keller
Consultant
Priceline.com (retired)
Greenwich, Conn.
Charles A. Lave
Professor
of Economics (emeritus), and
Associate
Director
Institute of Transportation
Studies
University of
California
Irvine
Adrian K. Lund
Chief
Operating Officer
Insurance Institute for
Highway Safety
Arlington,
Va.
Phillip S.
Myers*
Emeritus Distinguished Research Professor and former
Chairman
Department of Mechanical
Engineering
University of
Wisconsin
Madison
Gary W. Rogers
President,
Chief Executive Officer, and Director
FEV Engine Technology Inc., and
Vice President of North American
Operations
FEV Motorentechnik GmbH &
Co. KG
Auburn Hills,
Mich.
Philip R.
Sharp
Lecturer of Public
Policy
John F. Kennedy School of
Government
Harvard
University
Cambridge,
Mass.
James L.
Sweeney
Professor of Management
Science and Engineering
Stanford
University, and
Senior
Fellow
Stanford Institute for Economic
Policy Research
Stanford,
Calif.
John J.
Wise*
Vice President of
Research
Mobil Research and Development
Corp. (retired)
Princeton,
N.J.
RESEARCH COUNCIL
STAFF
Alan
Crane
Study
Director
*Member, National Academy
of
Engineering
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