The CAFE Standards: Ten Years Later

In December of 1975 the United States Congress created the Corporate Average Fuel Economy (CAFE) standards as part of the Environmental Policy and Conservation Act (EPCA). Ten years after their inception, the CAFE standards are being reexamined. After easily meeting the standard the first years, CM and Ford among others have been failing to meet the increasingly stringent standard. Faced with the prospect of hundreds of millions of dollars in civil penalties they have petitioned for a rollback of the standards. This paper summarizes the events leading to passage of EPCA and the ten years since. Following that is an examination of the current situation, analyzing the key issues and a summary of all pending legislation. Conclusions are drawn as to alternatives that could have been taken then, and those that could be taken now.