Fuel Economy in the United States

In the United States, Corporate Average Fuel Economy (CAFE) standards have been implemented since the late 1970s, requiring that the sales-weighted average fuel economy of newly registered cars does not exceed a limit value, which was set at 18 miles per gallon (mpg) in 1978 and reached 27.5 mpg in 1990. A similar standard was adopted for light duty trucks (including sport utility vehicles, pickup trucks and minivans), which was set at 17.5 mpg in 1982, reached 20.7 mpg in 1996 and only changed recently to 21.0 mpg in 2005, 21.6 mpg in 2006 and 21.7 mpg for 2007 and beyond. Figure 4 shows the evolution of these standards. As a result, the average on-road fuel economy of new cars and light trucks increased from about 14 mpg in the mid-1970s to 21 mpg in the mid-1990s and has slightly deteriorated since then. The improvement was less remarkable than initially expected due to the increase in the share of light trucks in the fleet, which has reached 48% of new light duty vehicle sales in 2003, compared to 20% in 1975 (Hellmann and Heavenrich 2004), and since light trucks are still faced with more relaxed fuel economy standards.

Since the mid-1990s, automobiles in the U.S. have continuously become heavier, larger and more powerful; this should be attributed to rising income, increasing safety standards and technical progress towards energy-efficient engines. This clearly means that, in the absence of stricter fuel effi-

1975

1985

1995

Fig. 4. Evolution of CAFE standards and sales-weighted average fuel economy of newly registered cars and light trucks in the United States, 1975-2004. Actual fuel economy figures shown here include the US EPA's correction factors for on-road driving (0.90 for city driving and 0.78 for highway driving) (Source: Hellmann and Heavenrich 2004)

-Cars

— Light Trucks • CAFE Truck standard

1975

1985

1995

2005

Model Year

Fig. 4. Evolution of CAFE standards and sales-weighted average fuel economy of newly registered cars and light trucks in the United States, 1975-2004. Actual fuel economy figures shown here include the US EPA's correction factors for on-road driving (0.90 for city driving and 0.78 for highway driving) (Source: Hellmann and Heavenrich 2004)

ciency standards, technical progress has been almost exclusively used to increase vehicle performance and accommodate more amenities instead of further improving fuel economy. This shows that, although CAFE proved to be cost-effective and has saved hundreds of billions of gallons of fuel in the U.S. since 1980 (Greene 1998), fuel economy improvements would have been even greater if standards had not stagnated after 1995 — particularly those of light trucks. In fact, there is evidence that up to 50% improved fuel economy levels can be achieved up to 2010-2015 and in a cost-effective manner if CAFE standards are raised or a similar program is adopted (De Cicco et al. 2001; NRC 2002; Plotkin 2002).

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