Believe it or not, government regulation sometimes can lead to technological innovation. During the energy crisis of the 1970s, Congress passed a law that required automobile manufacturers to improve the fuel economy of their cars and light trucks. The automakers promptly adopted cheap, ingenious ways to comply with the Corporate Average Fuel Economy (CAFE) standards. Thanks largely to more advanced engines and computerized controls, the average gas mileage of new vehicles doubled over the next decade, reaching a high of 26.2 miles per gallon in 1987.

Since then, however, the average has slid to 24.5 mpg, even though automotive engineers are still brimming with ideas for enhancing fuel economy. The problem is that the CAFE standard for cars has been frozen at 27.5 mpg for the past 12 years, and the standard for light trucks is stuck at 20.7 mpg. Moreover, the phenomenal growth in the popularity of sport utility vehicles--which are classified as light trucks--has changed the mix of new vehicles and thus lowered the overall average.

This article was originally published with the title Another Cup of CAFE, Please.

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