Cost Effectiveness of Future Fuel Economy Improvements

Abstract

U.S. petroleum use today is 2 million barrels per day lower than it would have been if automobile fuel economy had not improved since 1975. This paper explores the potential for and cost of further increases in domestic passenger car fuel economy using market-ready technologies and sales mix shifts. Using technology already included in manufacturers’ production plans and based on consumers' willingness to pay for increased fuel economy, domestic auto mpg could be increased from the 1987 level of 27 mpg to 31.6 mpg in 1995 without reducing vehicle size or performance from 1987 levels. By 2000, 34.3 mpg can be justified on the same basis. A higher level, 36.4 mpg, is cost-effective, based on fuel cost savings over the entire expected vehicle life. The maximum level achievable with the technology included in this analysis is 39.4 mpg, but this level would not be cost-effective. Sales mix shifts stimulated by price subsidies for efficient cars and surcharges on inefficient models can cause about 1 or 2 mpg of higher fuel economy before becoming too costly.

Leaking methane from natural gas vehicles: Implications for transportation policy in the greenhouse era

“…77 The results presented here suggest that fuel economy improvements are probably much more cost-effective than would be efforts to tighten the natural gas supply and distribution system. However, extending this work to disaggregate the economic and social costs of efficiency improvements and VMT constraints may, in conjunction with the research described in the previous paragraph, provide important policy insights.…”

Emission Impacts of Electric Vehicles

“…These refueling emissions are divided by fuel economy of replaced ICEV fleet in the two target years to achieve refueling emissions in gpm. Based on EPA's fuel economy tests of various model-year vehicles, 14 and Difiglio et al study of the fuel economy of future automobiles, 31 we project the fuel economy of the replaced ICEV fleet in 1995 and 2010. * Projected fuel economy of replaced ICE automobile and LDT fleets is presented in Table I.…”

Revenue‐neutral Incentives for Efficiency and Environmental Quality

“…The $2/gallon cost on which this figure is based is comparable to gas taxes in Europe and Japan: Such taxes are in the $1.00-$3.5O/gallon range (figure 2). Figure 2 shows that one can achieve substantial improvements in efficiency at costs below current gasoline prices (Difiglio et al, 1989;Rosenfeld et al, 1989).…”