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How will a 54.5 mpg CAFE (Corporate Average Fuel Economy) mandate affect us?
We start with a mystery. Because Minivans are big and heavy, they should be the source of a large proportion of all traffic fatalities in 2-car accidents. But they are not.
Economist Mark Jacobsen says that Minivans are safer because of their drivers. Minivans are driven in urban areas for family use by people with more education. Jacobsen hypothesizes that these people drive more safely.
By contrast, as the source of a high proportion of fatalities, large pickup trucks appear to be less safe. In 2-car accidents, among 10 vehicle classes, large pickups are the source of the most fatalities because of deaths in the other vehicle. Similarly, single car fatality rates are topped by pickup trucks. Here, Dr. Jacobsen suggests that less safe drivers buy large pickups.
Looking at the impact of fuel economy mandates, Dr. Jacobsen focused on driving behavior and auto engineering. Among drivers, age, gender, income, urban density, “taste for safety,” alcohol consumption and regard for traffic signals influence car accident rates. On the engineering side, yes, there are more accidents when weight drops. It has been estimated that the tradeoff is 2000 extra traffic fatalities for every 1.7 billion gallons of gasoline that we save from federal fuel economy mandates that lead to lighter cars. On the other hand, though, some say that the problem is the heavy cars. As cars get lighter because of fuel economy standards, they will be less lethal and fatality numbers will decline. Also, if drivers of heavier cars like Minivans and large pickup truck move to lighter vehicles, will their driving habits accompany them?
This returns us to 54.5 mpg.
Yesterday the NHTSA (National Highway Traffic Safety Administration) announced that, “The Obama Administration today finalized groundbreaking standards that will increase fuel economy to the equivalent of 54.5 mpg for cars and light-duty trucks by Model Year 2025.”
As economists we should ask about cost, benefit and incentives. We can try to predict the impact of a 54.5 mpg CAFE mandate on fatalities, on consumers, on manufacturers and on carbon emissions. As you can see, though, all are difficult to assess. 54.5 MPG might have a vast array of unexpected consequences.
To read all that Dr. Jacobsen says about the most beneficial approach to fuel economy, you can read his papers here and here. And here is the NHTSA press release on the fuel economy mandates. Finally, here, econlife discusses Ford’s response to fuel economy with a lighter more expensive pickup truck.