Auto Manifesto

September 9, 2009

CAFE: Who Are We Kidding? (Part 2)

More thoughts about CAFE:

Limits to five the number of model years for which standards can be established in a single rulemaking.

This virtually guarantees the prevention of long term planning. The agency itself admits that its estimates are based on projected production figures by the manufacturers. Yet future regulations are constantly in the air since each rulemaking is limited to a 5 year horizon.

This is akin to looking 5 feet ahead of the car while driving. You will make constant steering inputs without looking further up the road, resulting in actions that matter little in the long run.

Distinguishing between passenger cars and light trucks is unnecessary. Why classify different types of vehicles that are intended for private use? All this has accomplished is to shift consumers from large cars to larger SUVs.

The agency could not set out the exact level of CAFE that each manufacturer would be required to meet for each model year under the passenger car or light truck standards since the levels would depend on information that would not be available until the end of each of the model years, i.e., the final actual production figures for each of those years. The agency could, however, project what the industry-wide level of average fuel economy would be for passenger and light trucks if each manufacturer produced its expected mix of automobiles and just met its obligations under the proposed "optimized" standards for each model year.

Manufacturers' compliance with the regulations depend on actual production levels and targets.

Compliance with this regulation is entirely dependent on whether a manufacturer can accurately meet its production projections (or buy compliance credits from those that do). But they are at the mercy of market demand. How much faith can we put in these projections when the industry has traditionally been cyclical (see 2009 sales)? These projections are hit or miss.

This also throws into question any cost/benefit estimate on the agency's part.

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