TY - JOUR
T1 - Comparing flexibility mechanisms for fuel economy standards
AU - Fischer, Carolyn
PY - 2008/8
Y1 - 2008/8
N2 - Since 1975, the Corporate Average Fuel Economy (CAFE) program has been the main policy tool in the US for coping with the problems of increasing fuel consumption and dependence on imported oil. The program mandates average fuel economy requirements for the new vehicle sales of each manufacturer's fleet, with separate standards for cars and light trucks. The fact that each manufacturer must on its own meet the standards means that the incentives to improve fuel economy are different across manufacturers and vehicle types, although the problems associated with fuel consumption do not make such distinctions. This paper evaluates different mechanisms to offer automakers the flexibility of joint compliance with nationwide fuel economy goals: tradable CAFE credits, feebates, output-rebated fees, and tradable credits with banking. The policies are compared according to the short- and long-run economic incentives, as well as to issues of transparency, implementation, administrative and transaction costs, and uncertainty.
AB - Since 1975, the Corporate Average Fuel Economy (CAFE) program has been the main policy tool in the US for coping with the problems of increasing fuel consumption and dependence on imported oil. The program mandates average fuel economy requirements for the new vehicle sales of each manufacturer's fleet, with separate standards for cars and light trucks. The fact that each manufacturer must on its own meet the standards means that the incentives to improve fuel economy are different across manufacturers and vehicle types, although the problems associated with fuel consumption do not make such distinctions. This paper evaluates different mechanisms to offer automakers the flexibility of joint compliance with nationwide fuel economy goals: tradable CAFE credits, feebates, output-rebated fees, and tradable credits with banking. The policies are compared according to the short- and long-run economic incentives, as well as to issues of transparency, implementation, administrative and transaction costs, and uncertainty.
KW - Energy security
KW - Feebates
KW - Fuel economy
UR - http://www.scopus.com/inward/record.url?scp=85058201642&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85058201642&partnerID=8YFLogxK
U2 - 10.1016/j.enpol.2008.03.042
DO - 10.1016/j.enpol.2008.03.042
M3 - Article
AN - SCOPUS:85058201642
VL - 36
SP - 3116
EP - 3124
JO - Energy Policy
JF - Energy Policy
SN - 0301-4215
IS - 8
ER -