The Impact of Attribute-Based Corporate Average Fuel Ecomony (CAFE) Standards

McManus, W. 2007. The Impact of Attribute-Based Corporate Average Fuel Ecomony (CAFE) Standards.
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This report is the first rigorous analysis of the economic impacts of current legislative proposals to raise CAFE under a reformed “attribute-based” structure. Whereas historically CAFE set one standard for all automakers, the reformed system fundamentally alters the impact of CAFE on individual companies by setting standards based on a vehicle attribute, such as size. Companies that market larger vehicles (e.g., the Big 3) will face a less stringent standard under a reformed CAFE design. For example, Markey-Platts sets an overall CAFE target of 35 miles per gallon in 2018, but we estimate the Detroit automakers would have to achieve only 33 miles per gallon while their competitors would need to achieve 38 miles per gallon