Question

Please develop a response (minimum 300 words) by researching the discussion question, using the internet, assigned readings and your personal experiences.

What Is Corporate Average Fuel Economy (CAFE)?

Is the President’s approach (President George W. Bush, April 27, 2006), i.e., doubling the CAFÉ standards, the right way to reduce gas consumption (and thereby reduce air pollution from cars)? If not, why not?

Does anyone need to drive a Sport Utility Vehicle (SUV)? Should they be exempt from CAFÉ standards?

Should the government subsidize automakers to develop zero-emission vehicles (ZEVs)?

Answer 1

Corporate Average Fuel Economy (CAFE) standards regulates the average fuel economy of new vehicles sold in the United States. CAFE standards work by establishing a required fuel economy for the entire fleet of the new vehicles (in miles per gallon), with separate standards established for passenger cars and light trucks.

Corporate average refers to sales-volume weighted average for every auto manufacturer. CAFE norms aim at lowering fuel consumption (or improving fuel efficiency) of vehicles. It is achieved by lowering carbon dioxide emissions. Thus, it serves the twin purposes of reducing dependence on oil for fuel and controlling pollution. The norms are applicable for petrol, diesel, LPG and CNG passenger vehicles.

CAFE standards for passenger cars and for light trucks and the SUVs are calculated separately. A manufacturer's fleet of passenger cars is divided into domestics and imports as determined by the percentage of components manufactured outside the United States and Canada. The manufacturer must meet CAFE standards for both its domestic and its import fleet separately. The CAFE regulations are in place in many advanced as well as developing nations, including India.

The Bush administration has modern scheme to allow automobile manufacturers to trade fuel economy credits and an incentive system to issue consumers with tax credits on purchase of more energy efficient model. President Bush's CAFE reform proposal for passenger cars

(i) Sound science and economics should determine fuel economy standards through an open regulatory process. Under this, passenger car fuel standards are set in law at 27.5 miles per gallon (MPG)

(ii) Automakers now face a uniform standard for their entire can fleet, regardless of the composition of that fleet. A standard based on vehicle dimensions will enhance the safety by eliminating the incentive for manufacturers to down size vehicles and by increasing incentives for technological advancement that will lower MPG and will make passenger cars safer.

(iii) Manufacturers should be able to trade fuel economy credits to ensure fuel savings are achieved at the lowest possible cost to consumers and automakers.

Sport Utility Vehicle or SUV is a car classification that merge elements of road going passenger cars with features from off-road vehicles, such as raised groud cleanser and four wheel drive. The original CAFE standards set minimum average fuel consumption performance for the fleets of new 'passenger automobiles' (passenger car) and 'non-passenger automobiles' (light trucks, which includes many SUVs) produced by each manufacturer.

The Zero Emission Vehicle (ZEV) program is a california state regulation that requires automakers to sell the electric cars and trucks in california and 10 other states. The exact number of vehicles is linked to the automaker's overall gasoline and diesel sales within the states. Automakers earn credits by selling zero emission cars and trucks.