Summary: This case argues that Congress should do away with the CAFÉ standards.
Released: Filed Under: Stoa Policy
About "Cafe on the Left Bank"
Corporate Average Fuel Economy (CAFÉ) standards were enacted by Congress in 1975 and took effect in the 1978 car model year. They set standards for the average fuel mileage per gallon (mpg) of all cars sold in the U.S. by each manufacturer. The average mpg of each manufacturer’s cars is compared to the standard, and if it’s lower, they have to pay a fine calculated by the amount they missed the standard times the number of cars they sold that year. The standards were increased in 2012 with a phase-in period, and the Obama administration promised a review in 2017 to discuss with representatives of the auto industry whether the 2025 targets were feasible.
As the clock ran out in the final days of Obama’s term of office, he simply ordered the standards to be kept as-is without conducting the review. Trump came to office promising to do something about the higher standards, but so far all he has committed to is reviewing them by Spring of 2018. Nobody is talking about repealing the standards altogether, and that would take an act of Congress.
This case argues that is exactly what Congress should do. CAFÉ standards raise the price of cars by fiating that new, more expensive, efficiency technologies must be used (or else by simply raising the price of the cars if they don’t meet the standard, by fining the manufacturer). This hurts the poor by raising the price of cars and it hurts the auto industry by decreasing demand for new cars, with higher prices. The most tragic impact is loss of life. Higher fuel mileage requires lighter cars with less solid materials protecting the passengers, resulting in thousands of needless vehicle accident fatalities every year.
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