The Economics of Fuel Economy Standards

Ian Parry, Paul Portney, Winston Harrington and Howard Gruenspecht

RFF Working Paper Series from Resources for the Future

Abstract: This paper discusses several rationales for the Corporate Average Fuel Economy (CAFE) program, including reduced oil dependence, reduced greenhouse gas emissions, and the possibility that fuel saving benefits from higher standards might exceed added vehicle costs. We then summarize what can be said about the welfare effects of tightening standards, accounting for prior fuel taxes, and perverse effects on congestion and traffic accidents through the impact of improved fuel economy on the incentive to drive. Implications of CAFE on local air pollution, and the controversy over CAFE, vehicle weight, and road safety, are also discussed. Finally, we describe ways in which the existing CAFE program could be substantially improved and identify a variety of alternative, and much superior, policy approaches.

Date: 2003-11-20
New Economics Papers: this item is included in nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.rff.org/RFF/documents/RFF-DP-03-44.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.rff.org/RFF/documents/RFF-DP-03-44.pdf [301 Moved Permanently]--> https://www.rff.org/RFF/documents/RFF-DP-03-44.pdf)

Related works:
Working Paper: The Economics of Fuel Economy Standards (2003)
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:rff:dpaper:dp-03-44

Access Statistics for this paper

More papers in RFF Working Paper Series from Resources for the Future Contact information at EDIRC.
Bibliographic data for series maintained by Resources for the Future ().