Fuel Economy: Impacts of the CAFE Standard

This paper gives an overview of the corporate average fuel economy (CAFE) standards program, reviews key concerns and conflicts of the present program, looks at alternative issues, and presents recommendations on restructuring the program. The current CAFE standard is not meeting its intended purpose, and a change in form is needed. Certain alternatives are introduced in order to discuss the problems created by the standard and ways to make the program more effective.

The Energy Policy and Conversation Act was passed in 1975 establishing the CAFE standards. The impacts of the standards have significant importance concerning energy security, emissions, safety, and labor. Fuel economy begins with the consumer. Unless some incentives are given to the consumers to increase their awareness of fuel efficiency, no fuel economy program will prove to be beneficial.