The Economic, Energy, and GHG Emissions Impacts of Proposed 2017–2025 Vehicle Fuel Economy Standards in the United States
Name
MITJPSPGC_Rpt226.pdf
Description
main article
Size
1.24 MB
Format
Adobe PDF
Checksum (MD5)
510499716a7dcd426f6c48b204111d26
Author(s)
Karplus, Valerie
Paltsev, Sergey
Date Issued
July 31, 2012
Publisher
MIT Joint Program on the Science and Policy of Global Change
Citation
Report 226
Series/Report no.
Joint Program Report Series;226
Abstract
Increases in the U.S. Corporate Average Fuel Economy (CAFE) Standards for 2017 to 2025 model year light-duty vehicles are currently under consideration. This analysis uses an economy-wide model with detail in the passenger vehicle fleet to evaluate the economic, energy use, and greenhouse gas (GHG) emissions impacts associated with year-on-year increases in new vehicle fuel economy targets of 3%, 4%, 5%, or 6%, which correspond to the initially proposed rates of increase for the 2017 to 2025 CAFE rulemaking. We find that across the range of targets proposed, the average welfare cost of a policy constraint increases non-linearly with target stringency, because the policy targets proposed require increasingly costly changes to vehicles in the near term. Further, we show that the economic and GHG emissions impacts of combining a fuel tax with fuel economy standards could be positive or negative, depending on underlying technology costs. We find that over the period 2015 to 2030, a 5% CAFE policy would reduce gasoline use by about 25 billion gallons per year, reduce CO2 emissions by approximately 190 million metric tons per year, and cost $25 billion per year (net present value in 2004 USD), relative to a No Policy baseline.
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