Fuel Efficiency Standards: What to Do Next? by Gretchen Randall

Washington is debating whether to increase Corporate Average Fuel Efficiency (CAFE) standards to require automakers to produce cars, minivans, SUVs and light trucks that get better gas mileage.

Some Democrats and Republicans are pushing for a mandatory increase in the requirements; saying fuel efficiency is the only way to reduce the nation’s dependence on foreign oil. What they nearly always fail to point out are the tradeoffs that occur when cars and trucks are made smaller and lighter to attain a better fuel efficiency.

The National Academy of Sciences (NAS) recently released a study showing that, since CAFE standards were imposed in 1975 as an answer to the Mideast oil embargo, an additional 2,000 deaths per year can be attributed to CAFE-required downsizing.1 That’s a total of 52,000 deaths – nearly as many Americans as were lost in Vietnam. The study also estimates that moving to smaller, lighter vehicles in the 1970s and early 1980s resulted in “an additional 13,000 to 26,000 incapacitating injures and 97,000 to 195,000 total injuries in 1993” alone.2

After driving small cars for a period of time, Americans decided to move back to larger, heavier cars in the 1980s. Safety and space were key considerations. Something legislators and regulators frequently fail to take into account, the “law of unintended consequences,” began to assert itself.

As Americans began looking for roomier cars in the 80s they found few station wagons, previously the main transportation of many multi-child families, offered for sale. Full-size station wagons simply couldn’t meet the mandated fuel economy standard of 27.5 mpg for cars. But since vehicles in the light truck category needed only to meet a 20.7 mpg standard, carmakers satisfied both families and regulators by inventing SUVs – vehicles large enough for multi-child families, yet categorized as trucks under the law.

CAFE standards are the reason we see few full-size station wagons on the road anymore, and they are the reason SUVs were invented. Indirectly, environmentalists invented SUVs.

But environmentalists today care little for the unintended product of their labors. They argue now that Americans shouldn’t drive “gas guzzling” SUVs. Many wish SUVs didn’t exist.

In a free market, however, consumers buy the products they want and push the market to supply more of those products. Many Americans want large, safe and roomy vehicles. Others want small, economical and low-mileage vehicles – even environmentalist-pleasing hybrid vehicles. All options are available.

No discussion of CAFE standards would be complete without consideration of their monetary costs, and the effect these higher costs have on the poor and disproportionately low-income minorities. When the U.S. House of Representatives in 2001 debated its version of an energy bill, an amendment was offered to raise the fuel economy standards for light trucks and SUVs from the current 20.7 mpg to 27.5 mpg by 2007. A whopping 22 of 38 Congressional Black Caucus (CBC) members voted against that amendment. In fact, CBC member U.S. Rep. Edolphus Towns (D-NY) said the provision would be “ill conceived and counterproductive. It would bring about a tremendous job loss.”3

Towns might have added that the NAS also predicts the new standards would add costs of between $500 and $2,500 per vehicle.4 The result would be that very many low income and even middle class Americans would keep their current cars longer and thus older cars, which emit more pollutants, would remain on the road.

Alternative vehicles such as hybrid electric cars do get more mileage but these vehicles are necessarily small, and thus are a less-than-appealing option for multi-child families.

Some say fuel cell vehicles can help automakers meet stricter CAFE standards, but few fuel cell proponents mention how much energy it takes to produce hydrogen. Nor do advocates note that moving to hydrogen as a fuel requires building the infrastructure for supply stations in every city and town. The Department of Energy’s Alternative Fuels Data Center notes that high production costs make it likely it will be 20 to 30 years before hydrogen is a “viable transportation fuel.”5

As much as we’d all like to contribute to fuel economy for our nation’s security, mandated increased fuel economy standards aren’t the answer.

Gretchen Randall is the Director of Environmental & Regulatory Affairs of the John P. McGovern, MD Center for Environmental and Regulatory Affairs of The National Center for Public Policy Research in Washington, DC.


1 “Effectiveness and Impact of Corporate Average Fuel Economy Standards 2002,” National Academy of Sciences, Washington, DC, downloaded at http://print.nap.edu/pdf/0309076013/pdf_image/26.pdf.

2 “Effectiveness and Impact of Corporate Average Fuel Economy Standards 2002,” National Academy of Sciences, Washington, DC, downloaded at http://print.nap.edu/pdf/0309076013/pdf_image/27.pdf.

3 Congressional Record, 8/1/2001.

4 Technology and Economic Analysis in the prepublication version of the report, “Effectiveness and Impact of Corporate Average Fuel Economy Standards 2002,” National Academy of Sciences, Washington, DC, downloaded at http://books.nap.edu/books/NI000377/html/18.html.

5 Department of Energy’s Alternative Fuels Data Center page on Hydrogen Vehicles downloaded at http://www.afdc.nrel.gov/afv/hydrogen.html.

The National Center for Public Policy Research is a communications and research foundation supportive of a strong national defense and dedicated to providing free market solutions to today’s public policy problems. We believe that the principles of a free market, individual liberty and personal responsibility provide the greatest hope for meeting the challenges facing America in the 21st century.