CAFE and You, Part 2 – Does CAFE Work?
In our last segment, we looked at the history of CAFE and how it was born from unintended consequences and governmental meddling in foreign affairs and markets. The stated purpose of CAFE (and the EPA from which it sprung) in the Energy Policy and Conservation Act of 1975 was to reduce our nation's dependence on foreign oil.
By any accounting on that standard alone, CAFE has failed miserably. Neither the Environmental Protection Agency nor the CAFE requirements have reduced our import of foreign petroleum. Our importation has increased thousands of times over what it was in the late 1960's and early 70's before OPEC and the oil crisis.
Today, we think of CAFE as the standard that requires automakers to produce more fuel efficient vehicles. By that measure, these regulations are a hit-and-miss success. Most measures, usually based on numbers given by the EPA (whose interest would very obviously be in showing itself to be useful), show that economy has improved greatly thanks to regulators forcing higher miles per gallon requirements on automakers.
CAFE Is Largely a Failure
The truth regarding how successful CAFE has been in reducing fuel economy is much less black and white than the EPA may wish you to believe. In New-vehicle characteristics and the cost of the Corporate Average Fuel Economy standard published by the RAND Journal of Economics (V.43, No.1, Spring 2012), Klier and Linn chart fuel economy gains vs. various market factors including CAFE from 1975 to 2008.