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  3. Journal of Economic Perspectives
  4. Fall 2003
  5. Policy Watch: The Economics of Fuel Economy Standards

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Policy Watch: The Economics of Fuel Economy Standards

  • Paul R. Portney
  • Ian W.H. Parry
  • Howard K. Gruenspecht
  • Winston Harrington
Journal of Economic Perspectives
vol. 17, no. 4, Fall 2003
(pp. 203–217)
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Abstract

One of the most hotly contested of all energy policy issues involves Corporate Average Fuel Economy (or CAFE) standards for new cars and light-duty trucks. Tighter standards would reduce gasoline consumption, and hence both greenhouse gas emissions as well as this country's vulnerability to oil price shocks. But they would also increase the price of new vehicles, worsen traffic congestion and--depending on how they are phased in--possibly even reduce occupant safety. These effects are amenable to economic analysis, and we review the evidence to date bearing on this interesting and important question.

Citation

Portney, Paul, R., Ian W.H. Parry, Howard K. Gruenspecht, and Winston Harrington. 2003. "Policy Watch: The Economics of Fuel Economy Standards." Journal of Economic Perspectives, 17 (4): 203–217. DOI: 10.1257/089533003772034961

JEL Classification

  • L62 Automobiles; Other Transportation Equipment
  • Q48 Energy: Government Policy
  • R41 Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise
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