A Lifecycle Analysis of the Corporate Average Fuel Economy Standards in Japan

This study estimated the corporate average fuel economy (CAFE) and CAFE targets of Japan’s domestic automobile manufacturers and evaluated whether manufactures have achieved these estimated CAFE targets. Furthermore, an analysis framework was proposed for estimating what impact the introduction of the CAFE standards in Japan will have on motor vehicle-derived lifecycle CO2 emissions. As a result, the following was found: (1) Automobile manufacturers can maximize their sales under the constraints of the CAFE standards, but vehicle sales plans based on sales maximization will lower their CAFE standard scores. (2) Economically optimal automobile manufacturer behavior—striving to achieve CAFE standards while maximizing sales—will increase the manufacturers’ overall carbon footprint and actually worsen the environment.