CAFE Insanity

It’s difficult to gainsay the intensity of feeling among environmental groups over CAFE standards.

“The auto industry and their friends in Congress should stop holding fuel efficiency hostage. It’s time to fix our gas guzzlers,” roared the always dyspeptic US PIRG.

“The U.S. auto industry remains stuck in a CAFE pit stop that has lasted for more than two decades,” according to the Union of Concerned Scientists.

For such groups, raising CAFE to a uniform 40-mile-per-gallon standard (up from 20.7 mpg for light trucks and 27.5 mpg for passenger cars) is an urgent necessity; indeed, as they see it, a 40 mpg standard will eradicate America’s most pernicious social and environmental ill: the SUV.

Of course, because many Americans own and prefer SUVs, this goal is never explicitly stated. Instead, huge increases in CAFE are touted as consumer friendly and economically beneficial. Thus the Natural Resources Defense Council: “Raising CAFE standards [to 40 mpg] can save Americans money.” There’s more: “Failing to do so will needlessly harm the health and lighten the wallets of everyone who breathes and everyone who drives.” This is, the group assures the world, “the best choice for America and Americans.”

FACT: CAFE levels advocated by extremist groups will cost Americans more money, not less, and will result in greater congestion, according to a new study by the Congressional Budget Office.

Interestingly, CBO’s conclusion is predicated on CAFE increases that are much lower than those preferred by green groups: Raising fuel economy standards to 31.3 mpg for cars and 24.5 mpg for light trucks, CBO found, would cost an additional $3.6 billion, or $228 to the price of every new vehicle sold.

CBO also found that fuel economy increases–again, those that are less stringent than what green groups support–could worsen social welfare by increasing traffic congestion and accidents (for more data on the latter, read the 2001 NAS study on CAFE and traffic fatalities). “Higher CAFE standards would lower the per-mile cost of driving, providing owners of new vehicles with an incentive to drive more,” CBO said. “While the increase in driving associated with higher CAFE standards might be relatively small, some studies suggest that the resulting costs of the increased congestion and traffic accidents may nevertheless be large.”