Examining fuel economy and carbon standards for light vehicles

This paper examines fuel economy and carbon standards for light vehicles (passenger cars and light trucks), discussing the rationale for standards, appropriate degrees of stringency and timing, regulatory structure, and ways to deal with “real world” fuel economy issues that may not be dealt with by the standards. There is no optimum method of establishing the stringency of a standard, but policymakers can be informed by analyses of technology cost-effectiveness from the viewpoint of different actors (e.g., society, vehicle purchasers) and of “top runners”—vehicles in the current fleet, or projections of future leading vehicles, that can serve as models for average vehicles some years later. The focus of the paper is on the US light vehicle fleet, with some discussion of applications to the European Union. A “leading edge” midsize car for the 2020 timeframe is identified, and various types of attribute-based standards are discussed. For the US, a 12–15 year target for new vehicle fleet improvement of 30–50% seems a reasonable starting point for negotiations. For 2030 or so, doubling current fuel economy is possible. In both cases, adjustments must be made in response to changing economic circumstances and government and societal priorities.