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A difficult road ahead: Fleet fuel economy, footprint-based CAFE compliance, and manufacturer incentives

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  • Ullman, Darin F.

Abstract

Using detailed vehicle specifications, this paper analyzes the impact identifiable vehicle characteristics and technological progress has on fleet fuel economy by vehicle type and class. The results suggest manufacturers will face a difficult task complying with the new footprint-based CAFE standards if compliance is met by only changing identifiable vehicle characteristics. I find evidence that the stringent footprint-based standards create a manufacturer incentive to increase vehicle size to lower the burden of compliance. This undermines the standards' potential to create expected fuel savings and lower emissions levels.

Suggested Citation

  • Ullman, Darin F., 2016. "A difficult road ahead: Fleet fuel economy, footprint-based CAFE compliance, and manufacturer incentives," Energy Economics, Elsevier, vol. 57(C), pages 94-105.
    • Handle: RePEc:eee:eneeco:v:57:y:2016:i:c:p:94-105
    DOI: 10.1016/j.eneco.2016.04.013
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    References listed on IDEAS

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    Cited by:

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    3. Dugan, Michael T. & Turner, Elizabeth H. & Thompson, Mark A. & Murray, Susan M., 2017. "Measuring the financial impact of environmental regulations on the trucking industry," Research in Accounting Regulation, Elsevier, vol. 29(2), pages 152-158.
    4. Wu, Jingwen & Zhang, Tong & Liao, Hua, 2024. "Fuel economy standards: Regulatory loopholes and firms’ heterogeneous responses," Journal of Environmental Economics and Management, Elsevier, vol. 123(C).
    5. Safiullah, Md & Kabir, Md. Nurul & Miah, Mohammad Dulal, 2021. "Carbon emissions and credit ratings," Energy Economics, Elsevier, vol. 100(C).
    6. Sen, Burak & Noori, Mehdi & Tatari, Omer, 2017. "Will Corporate Average Fuel Economy (CAFE) Standard help? Modeling CAFE's impact on market share of electric vehicles," Energy Policy, Elsevier, vol. 109(C), pages 279-287.

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    More about this item

    Keywords

    Automotive; CAFE; Fuel economy; Policy incentives; Vehicle classes;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods

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