Fuel Efficiency Standards Should Not Be Raised
Nakaya, Andrea C. (Ed.), Oil, Farmington Hills, Michigan: Greenhaven Press, 2006
3 Pages Posted: 7 Mar 2014
Date Written: July 1, 2004
The authors argue that efforts to promote fuel efficiency by raising Corporate Average Fuel Economy (CAFE) standards fail because of perverse incentives created by them to increase driving when the relative cost of fuel falls. They argue further that raising CAFE standards may harm society by leading to higher vehicle costs and the manufacture of lighter, less-safe vehicles.
Keywords: Fuel Economy, Energy Economics, Applied Microeconomics
JEL Classification: Q48
Suggested Citation: Suggested Citation