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What Raising Fuel Economy Standards Would do for Oil Savings
5/2/06

As you might have noticed, we received the following question about the lag between implementation of CAFE standards and fleet average fuel economy:

Has anyone at the UCS plotted the curves, the changes in CAFE , with new car sales, and old car retirement rates ... to see how long it would take for a particular CAFE plan to move the fleet average to X (where X is 25, 30, or more MPG)?

Have we! I feel like this is how I spend half my time! (ok, not quite...) To project the effects of policy changes on oil dependence and emissions, we run fuel economy scenarios through a stock model that accounts for new vehicle sales, old vehicle scrappage, and the annual miles driven by vehicles of a certain vintage.

Below you can see a graph showing the effect on stock average fuel economy (pink) due to an increase in new vehicle fuel economy (blue). The stock average necessarily lags the new vehicle fuel economy, but the oil savings (yellow) add up quickly nevertheless.

The mechanism used to drive the increase in new vehicle fuel economy is irrelevant here. What matters is the level of new vehicle fuel economy. Whether driven by CAFE standards, incentives, or consumers choosing hybrids, the effect on fleet average fuel economy and oil savings will be the same.

Posted by: Don 5/2/06

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