RL33982 - Corporate Average Fuel Economy (CAFE): A Comparison of Selected Legislation in the 110th Congress
16-Aug-2007; Brent D. Yacobucci and Robert Bamberger; 21 p.
Update: August 16, 2007
Abstract: The rise in crude oil and gasoline prices since the winter of 2006 has renewed the focus on U.S. fuel consumption in the transportation sector. Wider concerns over greenhouse gas emissions and climate change have contributed to interest in reducing fossil fuel consumption and improving the efficiency of the U.S. transportation sector. Possible changes to the federal Corporate Average Fuel Economy (CAFE) standards are one policy option to address the issue.
CAFE standards are fleetwide fuel economy averages that manufacturers must meet each model year. Currently, separate CAFE standards are established for passenger cars and light trucks, which include sport utility vehicles (SUVs), vans, and pickup trucks. Several bills have been introduced in the 110th Congress to modify the CAFE program. Senate energy legislation, H.R. 6, passed that body on June 21, 2007; the bill includes language on CAFE. On August 3, 2007, the House passed energy legislation — H.R. 3221 (241-170) and H.R. 2776 (221-189) — but these bills did not include CAFE provisions. Two House bills addressing CAFE (H.R. 1506, H.R. 2729) were circulated as possible amendments, but neither were debated on the House floor.
This report provides a side-by-side comparison of these and other bills in the 110th Congress addressing passenger vehicle fuel economy in general and the CAFE program specifically. The bills are compared on various policy options including, but not limited to, the types of provisions identified above. The report also compares provisions in bills that would establish greenhouse gas emissions standards for passenger cars outside of the CAFE structure. Such emissions standards would likely also have the effect of increasing fuel economy.
One issue in the CAFE debate over the years has been whether Congress should set CAFE standards or delegate that authority exclusively to NHTSA. For passenger cars, the original EPCA legislation established specific targets for model year (MY) 1978 and MY1985, and required that the Secretary of Transportation set standards for the interim years. Some of the current proposals would also set specific targets in the future; others would require annual improvements in CAFE by some specified percentage. In some instances, both approaches are used. Those proposals would establish a mandated CAFE by a certain date and require subsequent annual percentage increases. Some bills would also require NHTSA to set the maximum feasible interim standards.
Another key question is the form CAFE standards should take. One bill would require that the CAFE standard be expressed in grams per mile of carbon dioxide emissions (CO2), in addition to miles per gallon. States are pre-empted from establishing their own CAFE standards but are permitted to set clean air requirements. This has generated controversy, and some believe a requirement to report fuel economy as a function of CO2 emissions is intended to have some bearing on the differing treatment of the states between CAFE and emissions standards.