IDEAS home Printed from https://ideas.repec.org/a/aea/jecper/v17y2003i4p203-217.html
   My bibliography  Save this article

Policy Watch: The Economics of Fuel Economy Standards

Author

Listed:
  • Paul R. Portney
  • Ian W.H. Parry
  • Howard K. Gruenspecht
  • Winston Harrington

Abstract

One of the most hotly contested of all energy policy issues involves Corporate Average Fuel Economy (or CAFE) standards for new cars and light-duty trucks. Tighter standards would reduce gasoline consumption, and hence both greenhouse gas emissions as well as this country's vulnerability to oil price shocks. But they would also increase the price of new vehicles, worsen traffic congestion and--depending on how they are phased in--possibly even reduce occupant safety. These effects are amenable to economic analysis, and we review the evidence to date bearing on this interesting and important question.

Suggested Citation

  • Paul R. Portney & Ian W.H. Parry & Howard K. Gruenspecht & Winston Harrington, 2003. "Policy Watch: The Economics of Fuel Economy Standards," Journal of Economic Perspectives, American Economic Association, vol. 17(4), pages 203-217, Fall.
  • Handle: RePEc:aea:jecper:v:17:y:2003:i:4:p:203-217
    Note: DOI: 10.1257/089533003772034961
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/089533003772034961
    Download Restriction: no

    References listed on IDEAS

    as
    1. Hamilton, James D., 1996. "This is what happened to the oil price-macroeconomy relationship," Journal of Monetary Economics, Elsevier, vol. 38(2), pages 215-220, October.
    2. Kleit, Andrew N, 1990. "The Effect of Annual Changes in Automobile Fuel Economy Standards," Journal of Regulatory Economics, Springer, vol. 2(2), pages 151-172, June.
    3. David L. Greene & James R. Kahn & Robert C. Gibson, 1999. "Fuel Economy Rebound Effect for U.S. Household Vehicles," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-31.
    4. Clifton T Jones, 1993. "Another Look at U.S. Passenger Vehicle Use and the 'Rebound' Effect from Improved Fuel Efficiency," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 99-110.
    5. Thorpe, Steven G, 1997. "Fuel Economy Standards, New Vehicle Sales, and Average Fuel Efficiency," Journal of Regulatory Economics, Springer, vol. 11(3), pages 311-326, May.
    6. Robert B. Barsky & Lutz Kilian, 2004. "Oil and the Macroeconomy Since the 1970s," Journal of Economic Perspectives, American Economic Association, vol. 18(4), pages 115-134, Fall.
    7. Edwin Mansfield & John Rapoport & Anthony Romeo & Samuel Wagner & George Beardsley, 1977. "Social and Private Rates of Return from Industrial Innovations," The Quarterly Journal of Economics, Oxford University Press, vol. 91(2), pages 221-240.
    8. Rajeev K. Goel & Michael A. Nelson, 1999. "The Political Economy of Motor-Fuel Taxation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 43-59.
    9. Richard S.J. Tol & Samuel Fankhauser & Richard G. Richels & Joel B. Smith, 2000. "How Much Damage Will Climate Change Do?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 1(4), pages 179-206, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hymel, Kent M. & Small, Kenneth A. & Dender, Kurt Van, 2010. "Induced demand and rebound effects in road transport," Transportation Research Part B: Methodological, Elsevier, vol. 44(10), pages 1220-1241, December.
    2. Whistance, Jarrett & Thompson, Wyatt, 2014. "The role of CAFE standards and alternative-fuel vehicle production credits in U.S. biofuels markets," Energy Policy, Elsevier, vol. 74(C), pages 147-157.
    3. Liu, Weiwei, 2015. "Gasoline taxes or efficiency standards? A heterogeneous household demand analysis," Energy Policy, Elsevier, vol. 80(C), pages 54-64.
    4. Agostini, Claudio A. & Jiménez, Johanna, 2015. "The distributional incidence of the gasoline tax in Chile," Energy Policy, Elsevier, vol. 85(C), pages 243-252.
    5. Michael L. Anderson & Maximilian Auffhammer, 2014. "Pounds That Kill: The External Costs of Vehicle Weight," Review of Economic Studies, Oxford University Press, vol. 81(2), pages 535-571.
    6. Brozovic, Nicholas & Ando, Amy Whritenour, 2009. "Defensive purchasing, the safety (dis)advantage of light trucks, and motor-vehicle policy effectiveness," Transportation Research Part B: Methodological, Elsevier, vol. 43(5), pages 477-493, June.
    7. Blumkin, Tomer & Margalioth, Yoram & Sadka, Efraim, 2009. "Incorporating affirmative action into the welfare state," Journal of Public Economics, Elsevier, vol. 93(9-10), pages 1027-1035, October.
    8. Achim Voß, 2015. "How Disagreement About Social Costs Leads to Inefficient Energy-Productivity Investment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(4), pages 521-548, April.
    9. Austin, David & Dinan, Terry, 2005. "Clearing the air: The costs and consequences of higher CAFE standards and increased gasoline taxes," Journal of Environmental Economics and Management, Elsevier, vol. 50(3), pages 562-582, November.
    10. Stephen P. Holland & Jonathan E. Hughes & Christopher R. Knittel, 2009. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?," American Economic Journal: Economic Policy, American Economic Association, vol. 1(1), pages 106-146, February.
    11. von Rosenstiel, Dirk Peters & Heuermann, Daniel F. & Hüsig, Stefan, 2015. "Why has the introduction of natural gas vehicles failed in Germany?—Lessons on the role of market failure in markets for alternative fuel vehicles," Energy Policy, Elsevier, vol. 78(C), pages 91-101.
    12. Tomer Blumkin & Yoram Margalioth & Efraim Sadka, 2007. "Incorporating Affirmative Action into the Welfare State," CESifo Working Paper Series 2003, CESifo Group Munich.
    13. Graff Zivin, Joshua S. & Kotchen, Matthew J. & Mansur, Erin T., 2014. "Spatial and temporal heterogeneity of marginal emissions: Implications for electric cars and other electricity-shifting policies," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 248-268.
    14. repec:spr:manint:v:47:y:2007:i:5:d:10.1007_s11575-007-0044-y is not listed on IDEAS
    15. Jeremy West & Mark Hoekstra & Jonathan Meer & Steven L. Puller, 2015. "Vehicle Miles (Not) Traveled: Why Fuel Economy Requirements Don't Increase Household Driving," NBER Working Papers 21194, National Bureau of Economic Research, Inc.
    16. Barla, Philippe & Proost, Stef, 2012. "Energy efficiency policy in a non-cooperative world," Energy Economics, Elsevier, vol. 34(6), pages 2209-2215.
    17. West, Jeremy & Hoekstra, Mark & Meer, Jonathan & Puller, Steven L., 2017. "Vehicle miles (not) traveled: Fuel economy requirements, vehicle characteristics, and household driving," Journal of Public Economics, Elsevier, vol. 145(C), pages 65-81.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:17:y:2003:i:4:p:203-217. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.