The Old Problem of CAFE’s New Math

, former research director, Clean Vehicles | August 29, 2011, 2:26 pm EDT
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By now, you’ve probably heard about the new passenger vehicle fuel economy and emissions standards that were recently announced. (For those of you who missed class that day, these standards will make our vehicles more climate-friendly and go further on a gallon of gas in the coming years.) And if you paid close attention, the number you’ve most likely seen is a fleet average of 54.5 mpg by 2025. This is a big number, but in the funny world of standards, it’s critical to also understand what that number represents.

Standards will save money and help the environment

Let’s start with what this does mean. There’s no question that these standards will improve both our economy and our environment. By UCS’s estimation, it’ll allow us to pump as much as 23 billion fewer gallons of gasoline into our vehicles in 2030, netting $50 billion in savings in that year alone. (And that’s even after paying for the fuel-saving technology.) Emissions-wise, the story is much the same, cutting carbon pollution by as much as 280 million metric tons in 2030. As I like to say, not chump change.

What it doesn’t mean – and why

What it doesn’t mean, however – and there continues to be a fair amount of misunderstanding on this point – is that new vehicles will have window label fuel economies averaging in the mid-50s. Let me explain.

That 54.5 mpg number is commonly referred to as a “CAFE value,” meaning it’s what the vehicles would average when evaluated under the Corporate Average Fuel Economy (CAFE) test procedure. This procedure, run in a laboratory on a dynamometer (think large treadmill), was designed decades ago to reflect the way we drove, and was subsequently ensconced into law. Yet while it did a good job capturing how we drove back then, a lot has changed in the intervening years.

Today, our vehicles are more powerful, allowing us to drive more aggressively. We also now drive at higher speeds on interstates with higher speed limits. And today we frequently drive with air conditioners running, whereas back then very few vehicles even had A/C as a standard feature.

None of these factors are captured in the CAFE test procedure, yet they all pull down our fuel economy. As a result, a sizable gap exists between a vehicle’s CAFE value and its real world mpg. How big of a gap? One good point of comparison is EPA’s on-road fuel economy estimation, which does account for A/C use, high-speed, and high-powered driving. In model year 2011, CAFE test results were, on average, 28% higher than EPA’s more sophisticated on-road estimation. (In one case, CAFE results were as much as 42 percent higher.) Fortunately for consumers, the mpg shown on new vehicle window labels is based on EPA’s numbers, and is generally reflective of our current real-world driving experience.

Tallying it up

So, back to our original question, what will these standards mean for shoppers in the showroom? The short answer is that when all of the adjustments and credits are accounted for, passenger vehicles (cars, pickups, minivans, and SUVs) are likely to average 36-37 mpg (real world) by 2025. Some models will do better than that; some models will do worse – that’s how the system is designed. By contrast, today’s new vehicles average about 22 mpg in the real world.

Of course, we remain concerned about how the program is structured, and will need to make sure the industry doesn’t abuse the system by turning the program’s flexibility mechanisms into loopholes, which would erode the above-mentioned benefits . But assuming that can, with vigilance, be done, this latest round of standards will boost our average fuel economy roughly 14 mpg in 14 years. In my book, that’s steady progress.

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