Should Corporate Average Fuel Economy (CAFE) Standards Be Tightened?

Ian Parry, Carolyn Fischer and Winston Harrington

No 10605, Discussion Papers from Resources for the Future

Abstract: This paper develops analytical models to estimate the welfare effects of higher Corporate Average Fuel Economy (CAFE) standards on new passenger vehicles. The analysis incorporates a broad range of fuel-and-driving-related externalities, fuel taxes, different assumptions concerning consumers' valuation of fuel saving technologies and their alternative value in enhancing other vehicle attributes, and endogenous vehicle fleet composition. To implement the analysis, we develop estimates of CAFE's impact on local pollution, nationwide congestion, and traffic accidents. We find that higher fuel economy standards can produce anything from moderate welfare gains, to very little or no effect, to substantial welfare losses, depending on how consumers value fuel economy technologies and their opportunity costs.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 49
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://ageconsearch.umn.edu/record/10605/files/dp040053.pdf (application/pdf)

Related works:
Working Paper: Should Corporate Average Fuel Economy (CAFE) Standards Be Tightened? (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:rffdps:10605

DOI: 10.22004/ag.econ.10605

Access Statistics for this paper

More papers in Discussion Papers from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().