Why CAFE Worked

00794742https://doi.org/10.21949/14030951997PDFResearch PaperDE-AC05-96OR22464Engine efficiencyFuel conservationExhaust gasesFederal lawsEnvironmental policyPolicy analysisAdvanced pollution control technologyCarbon emissionsCorporate Average Fuel Economy (CAFE) standardsFuel economy regulationsPetroleum dependenceUnited StatesOak Ridge National LaboratoryGreene, David L.Conference on Policies for Fostering Sustainable Transportation TechnologiesOak Ridge National LaboratoryNTL-HIGHWAY/ROAD TRANSPORTATION-HIGHWAY/ROAD TRANSPORTATIONNTL-ENERGY AND ENVIRONMENT-ENERGY AND ENVIRONMENTNTL-ENERGY AND ENVIRONMENT-Alternative FuelsNTL-ECONOMICS AND FINANCE-Economic ImpactsBTS Data DirectoryThe 1975 Energy Policy and Conservation Act established mandatory fuel economy standards for passenger cars and light trucks sold in the U.S. Since that time the Corporate Average Fuel Economy (CAFE) standards have often been criticized as costly, inefficient, and even unsafe, despite the general absence of direct empirical evidence to support such claims. This paper explains why properly designed and executed fuel economy regulations may be preferable to other policies for reducing petroleum dependence and carbon emissions, and reviews empirical evidence on the impacts of the CAFE standards. It appears that the standards substantially achieved their objective without producing significant negative side-effects because they were set at levels that could be achieved by cost-effective or nearly cost-effective technological innovations.84