Meeting the Challenge: A Stochastic Assessment of the U.S. Light-Duty Vehicle Fuel Economy Standards

Author(s):  
Parisa Bastani ◽  
John B. Heywood ◽  
Chris Hope

The U.S. Department of Transport and EPA have recently proposed further regulation of the light-duty vehicle corporate average fuel economy and GHG emissions for model years 2017 to 2025. Policy makers are setting more stringent targets out to 2025 in a context of significant uncertainty. These uncertainties need to be quantified and taken into account systematically when evaluating policies. In this paper, a stochastic technology and market vehicle fleet analysis is carried out, using the STEP (Stochastic Transport Emissions Policy model), to assess the probability of meeting the proposed CAFE targets in 2016 and 2025, and identify factors that play key roles in the near and midterm. Our results indicate that meeting the proposed targets requires (a) aggressive technological progress rate and deployment, (b)aggressive market penetration of advanced engines and powertrains, (c) aggressive vehicle downsizing and weight reduction, and (d) a high emphasis on reducing fuel consumption. Three scenarios are examined to assess the likelihood of meeting the proposed targets. The targets examined here, 32.5 and 34.1 mpg in 2016 and 44 and 54.5 mpg in 2025, are reduced from the nominal CAFE values after allowing for the various credits in the proposed rulemaking. The results show that there is about a 42.5% likelihood of the passenger cars average fuel economy falling below 32.5 mpg and a 5.3% likelihood of it exceeding 34.1 mpg in 2016, and about a 4% chance of it exceeding 44 mpg in 2025, under the plausible-ambitious scenario. Under the EPA/DOT preferred alternative scenario, the likelihood of passenger cars average fuel economy meeting or exceeding 34.1 mpg in 2016 and 44 mpg in 2025 increases to about 74% and 34.5% respectively. The probability of meeting these combined CAFE targets drops to less than 1% in both near and mid terms, once light trucks are included in the mix. This analysis quantifies the probability of meeting the targets therefore to enable risk-based contingency planning, and identifies key drivers of uncertainty where further strategic research is needed.

Author(s):  
Sanjana Ahmad ◽  
David L. Greene

Since 1975, the fuel economy of passenger cars and light trucks has been regulated by the corporate average fuel economy (CAFE) standards, established during the energy crises of the 1970s. Calls to increase fuel economy are usually met by a fierce debate on the effectiveness of the CAFE standards and their impact on highway safety. A seminal study of the link between CAFE and traffic fatalities was published by R. W. Crandall and J. D. Graham in 1989. They linked higher fuel economy levels to decreases in vehicle weight and correlated the decline in new car weight with about a 20% increase in occupant fatalities. The time series available to them, 1947–1981, includes only the first 4 years of fuel economy regulation, but any statistical relationship estimated over such a short period is questionable. This paper reexamines the relationship between U.S. light-duty vehicle fuel economy and highway fatalities from 1966 to 2002. Cointegration analysis reveals that the stationary linear relationships between the average fuel economy of passenger cars and light trucks and highway fatalities are negative: higher miles per gallon is significantly correlated with fewer fatalities. Log–log models are not stable and tend to produce statistically insignificant (negative) relationships between fuel economy and traffic fatalities. These results do not definitively establish a negative relationship between light-duty vehicle fuel economy and highway fatalities; instead they demonstrate that national aggregate statistics cannot support the assertion that increased fuel economy has led to increased traffic fatalities.


2019 ◽  
Author(s):  
Alan Jenn ◽  
Inês Azevedo ◽  
Jeremy Joseph Michalek

The transportation sector is currently the largest contributor of greenhouse gas (GHG) emissions in the United States, and light-duty vehicles produce the majority of transportation emissions. Federal standards for fleet-averaged vehicle GHG emission rates and their corresponding corporate average fuel economy standards cap GHG emissions of the US light-duty vehicle fleet. In addition, two key policies aim to encourage a future fleet transition to alternative fuel vehicle (AFV) technologies: (1) incentives that treat AFVs favorably in the federal GHG standard, and (2) state zero-emission vehicle (ZEV) policy, which mandates AFV sales in some states. While each of these AFV policies can encourage AFV adoption, we show that net GHG emissions increase when both policies are present simultaneously. Specifically, we estimate changes in life cycle GHG emissions and gasoline consumption, relative to a pure federal fleet GHG standard (without AFV incentives or mandates), resulting from the introduction of (1) AFV incentives in federal fleet GHG policy, (2) state ZEV mandates, and (3) the combination of the two. We find that under fairly general conditions the combined AFV policies produce higher GHG emissions than either policy alone. This result is a consequence of state mandates increasing AFV sales in the presence of federal incentives that relax the fleet GHG standard when AFVs are sold. Using AFV sales projections from the Energy Information Administration and the California Air Resources Board, we estimate that the combined policies produce an increase on the order of 100 million tons of CO2 emissions cumulatively for new passenger cars sold from 2012 through 2025 relative to a pure GHG standard. AFV incentives in the GHG standard conflate policy goals by encouraging AFV adoption at the cost of higher fleet GHG emissions, and they permit even higher fleet GHG emissions when other policies, such as the ZEV mandate, increase AFV adoption.


2018 ◽  
Vol 10 (1) ◽  
pp. 39-64
Author(s):  
Ann Wolverton ◽  
Ann E. Ferris ◽  
Nathalie B. Simon

This paper compares the U.S. Environmental Protection Agency’s (EPA) ex ante compliance cost estimates for the 2004 Automobile and Light-Duty Truck Surface Coating National Emission Standards for Hazardous Air Pollutants to ex post evidence on the actual costs of compliance based on ex post cost data gathered from a subset of the industry via pilot survey and follow-up interviews. Unlike many prior retrospective studies on the cost of regulatory compliance, we use this newly gathered information to identify the key drivers of any differences between the ex ante and ex post estimates. We find that the U.S. EPA overestimated the cost of compliance for the plants in our sample and that overestimation was driven primarily by differences in the method of compliance rather than differences in the per-unit cost associated with a given compliance approach. In particular, the U.S. EPA expected facilities to install pollution abatement control technologies in their paint shops to reduce emissions of hazardous air pollutants, but instead these plants complied by reformulating coatings.


1985 ◽  
Author(s):  
Fred W. Westbrook ◽  
Philip D. Patterson

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