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Are standards Effective in Improving Automobile Fuel Economy?

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  • Sofronis Clerides
  • Theodoros Zachariadis

Abstract

There is an intense debate over whether fuel economy standards or fuel taxation is the more appropriate policy instrument to raise fuel economy and reduce CO2 emissions of cars. The aim of this paper is to analyze the impact of standards and fuel prices in new car fuel economy with the aid of cross-section time series analysis of data from 18 countries. We employ a dynamic specification of new car fuel consumption as a function of fuel prices, standards and per capita income. Results are used to address policy questions that are currently in the center of discussions worldwide: to what extent the implementation of fuel economy standards has yielded fuel savings; how much fuel prices should rise in order to increase fuel economy without tightening standards; and whether autonomous fuel economy improvements should be expected in the absence of regulations or fiscal policy instruments.

Suggested Citation

  • Sofronis Clerides & Theodoros Zachariadis, 2006. "Are standards Effective in Improving Automobile Fuel Economy?," University of Cyprus Working Papers in Economics 6-2006, University of Cyprus Department of Economics.
    • Handle: RePEc:ucy:cypeua:6-2006
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    Cited by:

    1. Ajanovic, Amela & Schipper, Lee & Haas, Reinhard, 2012. "The impact of more efficient but larger new passenger cars on energy consumption in EU-15 countries," Energy, Elsevier, vol. 48(1), pages 346-355.
    2. 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.
    3. Theodoros Zachariadis, 2007. "On the role of regulatory standards: Specification and some empirical evidence from motor vehicle fuel economy," University of Cyprus Working Papers in Economics 1-2007, University of Cyprus Department of Economics.

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