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The Leaked Study on CAFE: Why It Doesn’t Justify Higher Fuel Economy Standards

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The Leaked Study on CAFE: Why It Doesn’t Justify Higher Fuel Economy Standards

On Point No. 83

 

This past Monday, the New York Times carried a front-page story on the National Academy of Sciences’ auto fuel-economy study.[1]  The study, on what is known as the CAFE program (for Corporate Average Fuel Economy), is expected to be released shortly.  But a draft of its executive summary was reportedly leaked to the Times “by a person who wanted to make sure that the report received wide attention.”  According to the news story, the report finds that CAFE can be increased with no adverse safety impact.  Since the House Energy and Commerce Committee began deliberating CAFE this week, the leak was impeccably timed.  Supporters of higher CAFE standards are already claiming that the report is yet another reason for Congress to make CAFE more stringent.

 

At this point, the only person who has seen the draft report is Times reporter Keith Bradsher (now out on vacation), leaving us to rely solely on his article in discussing the report’s contents.  But even so, a careful reading of his story indicates that this report is no basis for raising CAFE standards.  To the contrary, it demonstrates that CAFE is a lethal, flawed program that should be scrapped.

 

1.                   The Report Admits that CAFE is Deadly.  The study reportedly finds that rising CAFE standards “in the early 1980’s may have contributed to thousands of additional deaths” due to downsizing.  This is a startling admission, even though it appears far down in the Times’ story.  In acknowledging CAFE’s lethal effects, the study is the latest in a wide array of authorities that have noted the dangers of this program.  These authorities include traffic safety researchers[2], the auto insurance industry[3], investigative reporters[4], and a federal appeals court[5].  All of them have found overwhelming evidence that larger, heavier cars are more crashworthy than similarly equipped small cars, and that CAFE restricts the production of those safer cars for the sake of fuel economy.

 

2.                   The Fact that an Earlier Academy Study Missed CAFE’s Past Safety Effects Undercuts the New Study’s Claim of No Future Safety Effects.  The Academy issued its first study on CAFE in 1992.  That study noted that the data on CAFE’s safety effects were inconclusive, and that “concern for safety should not be allowed to paralyze the debate” over higher CAFE standards.[6]  But the current study reportedly concludes that CAFE may have led to thousands of deaths in the 1980’s.  If the Academy failed to recognize CAFE’s lethal safety effects after they had occurred, then how confident can we be about its prediction of no such effects in the future?

 

3.                   There Will Always Be a Trade-Off Between Fuel Economy and Safety.  According to the report, the study claims that future fuel economy gains can be achieved through technological innovations rather than through downsizing.  For this reason, it argues, higher CAFE standards can be met without the lethal effects of the past. But this ignores the basic fact that there will always be a trade-off between vehicle safety and fuel economy.  Take the most high-tech car imaginable, one with the most advanced fuel and saf ety technologies conceivable.  If you then make that car a bit larger and heavier, two things happen:  You end up with a car that is safer than it was before, but that is also less fuel-efficient.

 

Ironically, the study itself indirectly admits this.  It reportedly criticizes the auto industry for using improved, higher efficiency engines to “manufacture ever larger and heavier vehicles” rather than to raise gas mileage.  But these larger vehicles are, of course, safer vehicles.  If stringent CAFE standards had prevented their production, then this would be yet another example of CAFE forcing us to give up safety for the sake of fuel economy.

 

4.                   The Study’s Claim that Costly New Technologies Will Pay for Themselves Is Incredibly Speculative.  Reportedly, the study finds that the cost of these technologies will be “offset by the savings on gasoline over the typical 14-year life of the vehicle.”  Any such cost payback is highly dependent on gasoline prices over the time period at issue, but such forecasts are notoriously speculative.  Within the space of a few months, claims that gasoline would cost two dollars a gallon this summer have proven to be dead wrong.  The study, however, apparently relies on gasoline price forecasts extending over more than a decade.

 

It is highly questionable whether any one study should determine the future of a program as controversial as CAFE.  In this case, we don’t even have the study; we only have one news story based on a leak of a draft section of it.  If we should pay attention to anything, it is to that story’s half-buried mention of CAFE’s responsibility for thousands of traffic deaths.  The notion of expanding such a lethal program defies belief.  If CAFE were a chemical, it would have been banned long ago.  The fact that it’s a federal policy is no reason for keeping it around, let alone for making it even more dangerous.

[1] K. Bradsher, “A Panel Backed by Bush Urges Higher Fuel Efficiency for Cars”, New York Times, 17 July 2001, p.1

[2] See, for example, P.L. Anderson, Light Trucks and Compact Cars: Which Protect Their Occupants Better”, Anderson Economic Group (1999); R.W.Crandall and J. Graham, “The Effect of Fuel Economy Standards on Automobile Safety”, Journal of Law and Economics, v.32 (April, 1989), p. 97.

[3] Insurance Institute for Highway Safety, Status Report, 30 October 1999, p.5.

[4] “Death By The Gallon”, USA Today, 2 July 1999, section B.

[5] Competitive Enterprise Institute and Consumer Alert v. NHTSA, 956 F.2d 321 (D.C. Cir. 1992).

[6] National Academy of Sciences, Automotive Fuel Economy—How Far Should We Go? (1992), p. 7.