Corporate Average Fuel Economy (CAFE)

Bush's signature

Energy Security, With One Pen Stroke

In his 2007 State of the Union address, President Bush outlined his plan to raise fuel economy standards for cars and light trucks—echoing his call from the previous year’s speech to curb the nation’s “addiction to oil.” But the President failed to take the single most effective and immediate step to reduce the nation’s petroleum use: to set specific fuel efficiency targets for all cars and trucks.

From one year to the next, the Bush administration has made little progress in helping the country reduce its use of petroleum. In March 2006, the Bush administration did raise CAFE (corporate average fuel economy), when it moderately increased fuel economy levels for light trucks, SUVs and minivans—based on a new patchwork of multi-tiered standards according to vehicle weight. The new rules are expected to yield an estimated average mileage for new light trucks of 24 mpg by the 2011 model year.

Prior to the slight increase in efficiency standards for light trucks, President Bush had called on Congress to give him the power to increase fuel economy standards. Dan Becker, director the Sierra Club’s global warming program, said, “Like Dorothy in Oz, the president has had this authority all along but refused to use it.”

Dangerous Momentum

CAFE standards were enacted in response to the 1973-1974 Arab oil embargo. It took a severe shortage of oil (gas rationing), and a major geo-political event, to move Americans to greater efficiency. The auto industry responded. The enactment of fuel economy standards in 1975 resulted in a near doubling of cars’ average fuel economy, measured in miles per gallon. Light trucks have increased by more than 50 percent. As a result, the United States saves more than 55 billion gallons of fuel annually.

Fuel economy standards have not significantly changed in 20 years (through Republican and Democratic administrations alike).

With rising awareness of the dangers of oil dependence, and related environmental and economic impacts, Congress is beginning to put pressure on the administration to take action. For example, in early January, Republican Sen. Ted Stevens urged automakers to reach 40 miles per gallon by 2017, a considerable increase over the current standard of 27.5 mpg for passenger vehicles. Democratic Sen. Barack Obama introduced his own legislation to raise fuel economy standards. “The onus should no longer be on the public to prove why higher fuel economy standards are necessary—it should be on our government to prove why they are not,” Obama wrote.

Auto industry leaders are worried. General Motors Vice-Chairman Bob Lutz told the Detroit News, “There is a dangerous amount of momentum” in Congress behind tougher fuel economy regulations. “And we are about out of technology to get us there.”

The Deadlock

Claims from auto industry lobbyists that they lack the technology to improve fuel efficiency—and other well-known arguments for and against increases in CAFE—are being re-examined, in the light of the recent flurry of legislative proposals to address energy security and global warming.

CAFE reduces vehicle safety: The downsizing of vehicles in the 1970s and 1980s has reportedly cost thousands of lives per year.
Response: When measured by fatalities per mile driven, car safety has improved substantially over the past 30 years. Safety is a product of design, not weight.

CAFE means job losses: Raising CAFE standards will increase the cost of producing vehicles, costing Detroit billions of dollars and thousands of jobs.
Response: Unless we shift to greater efficiency and new technologies, American car companies and their employees will fail to compete with more fuel-efficient Japanese cars. If we continue to do nothing, U.S. oil import cost will create severe consequences to all sectors of the American job force.

CAFE is an environmental washout: Consumers paying less per-mile end up driving more. Therefore, higher fuel economy standards result in more congestion and pollution.
Response: People don’t drive more simply because they are saving a few dollars per tank.

CAFE reduces consumer choice: Driving a gas-guzzling SUV is an American right. Hands off consumer choice.
Response: Threats to our economy, security, and environment require decisive action. Technology for greater fuel efficiency is ready, and common-sense governmental guidelines are needed to ensure that carmakers help us avoid another energy crisis.

The decades-old CAFE debate continues—while Americans continue to consume ever greater amounts of petroleum. Yet, the stalemate on the fuel economy of American cars and trucks could be resolved with one stroke of the president’s pen.


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  • John Acheson

    Great point, MPG = CHANGE!

    I agree, after two years of research drilling down on the hybrid phenomenon, there’s a couple facts that glare out.

    1) Toyota’s Prius has captured almost 90% of sales

    2) the Toyota Prius was born out of the G-21 project that grew from a MPG or I should say KM/L goal to a 1,000 engineer team that threw out 80 designs to get to a funky little car that became the Prius

    What was the goal given to the reluctant engineers who failed hundreds of times before suceeding with the pre-Prius?

    The manager insisted on doubling mileage…

    Without that simple metric, the hybrid phenomenon might never have happened.

  • Aaron

    As stated by the subject, you should watch this movie. In it, Gore explains how the rest of the world, along with California, is or will be raising fuel economy standards drastically-but not the USA.

    Its sad that the rest of the world will have 35+MPG (40 and 50+ for Europe and Japan), yet the USA will still have its ultra-low numbers; dwindling in the 20s :sigh

  • Mike

    “the single most effective and immediate step to reduce the nation’s petroleum use” is not to raise CAFE standards. It is to raise taxes on gasoline. If you have to pay more for something, you will use less of it. CAFE standards are loved by (some) politicians because they impose costs indirectly and bring greater government control over an industry. Tax gas … very simple.

  • Bob

    Yes, Mike, raising gas taxes would do it. I agree. But getting higher gas taxes would be more difficult to get through legislative circles. The public might not get behind it. On the other hand, the president (Bush or his successor) has the authority to implement a phased-in increase of CAFE standards. Best approach of all–higher CAFE standards AND higher gas taxes. People would start driving less right away, and technology innovation would follow soon after.

  • John packer

    Many people use SUV’s and trucks to tow things like, boats, horse trailers, snowmobiles, utility trailers, etc. Increased in the CAFE standards without the technology could seriously hurt a SUV’s and trucks ability to tow over 2,000 lbs. I live in Wisconsin and most of the people I know who have these kind of vehicles use them with a purpose. There are over 11 million trailer boaters in the United States, not including people who tow other items mentioned. There are unintended consequences for almost all regulations.

  • Lee

    11 million trailer boaters? Sounds like 11 million people who need their taxes raised since they have so much money to waste on a boat AND the gas guzzler to tow it.

  • TypoFixer

    On the page: incentives-laws.html
    there’s a typo: “Buyer beware: the credits to not reduce the Alternative Minimum Tax.” should be: “Buyer beware: the credits do not reduce the Alternative Minimum Tax.” (“to” into “do”)

  • Unbelievable Guy

    wow what were we thinking, trying to save the planet for the billions of people who live here??? I had no idea there were 11 million boaters that were going to be impacted by these new guidelines, wow talk about an “INCONVENIENT TRUTH”!!! I’d like to see that in a movie!!!

  • Joe packer

    Give me a break with you sarcasm. What I was trying to point out is that their are millions of people who use SUV’s and truck for a purpose. Dont give me your “Save the earth” crap. I want to help the environment as much as the next, in a practical way. Spare me your elitist attitude.

  • Paul

    Wanting to save the earth, and all the people on it from the very worrying effects of global warming is not an “elitist attitude”! A small group of powerful people wanting to profit from the degradation of the global common environment is! Another “elitist attitude” is many consumers swallowing hook line and sinker the idea that global warming need not be urgently dealt with; a line often promoted by politicians and lobby groups dependent on corporate vested interests.
    And this is where a lot of resistance to practical, solutions to global warming, oil dependence and energy security comes from.

  • Joe packer


    Global warming is not fact, and their is also a small group of people who also are profiting from this silly scare. Does Al Gore come to mind. He will not even debate skeptics, none of these enviromental nut jobs will. There are many scientists that are skeptical about the cause of global warming, but they are not being heard, why? Their are scientists at MIT, University of Wisconsin and others who are skepitcal. We are only being told one side of the story. Paul, I thought the earth was going to freeze in the 1970’s, wasnt that the scare then. Not believing in man-made global warming is not an elitist attitude, it is called having an open mind, something that all of the enviomental wacko’s do not have. People should use their mind to think, not to just follow along and believe what Al Gore and Laurrie David tell them.

  • everyone chill

    buying a hybrid car is simply the best and wisest choice to make at this point in time. Global warming or no global warming, it doesn’t make a difference. Everyone needs to step down from their conspiracy soapboxes, stop watching too much television, and do something constructive with life. Want to make a difference? shut up and make one.

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