Fuel Economy Standards Necessary But Not Sufficient to Cut Oil Demand

A new study from the National Research Council argues for fuel efficiency and consumer incentives, among other policy options

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Simply forcing the U.S. automotive industry to comply with tougher fuel economy standards won't be enough to create substantial cuts in either greenhouse gas emissions or oil use, says a new report from the National Research Council.

The study finds that while tougher fuel efficiency standards are a crucial part of any plan to reduce emissions and oil demand, better standards alone would only slow the growth in both categories. The transportation sector is responsible for about 25 percent of carbon emissions nationally and about two-thirds of the country's oil use.

"I think that is one of the important points, that [tougher efficiency standards] is essential. It is an essential prerequisite," said Emil Frankel, who chaired the committee that authored the report.


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"But if one accepts the ambitious goals in terms of reduction of oil dependence and energy use, as well as greenhouse gas emissions, [then] the technological changes, in and of themselves, won't achieve those very, very ambitious goals. But it's a prerequisite and it's an important contributor."

Instead, the authors conclude, a range of other solutions could create greater, more sustained gains over the long term. They include: vehicle efficiency standards, increasing fuel taxes, investing in transportation infrastructure, creating low-carbon standards for fuel and trying to minimize household vehicle use by examining land-use and travel-demand management.

The authors did not advocate for any single option. More important than any particular solution, Frankel said, was how the different proposals could be used in combination to achieve the greatest reduction in emissions and oil demand.

"A key thing is how these various policy options interact with one another, the bundling of various policy options, the synergistic effect," Frankel said. "So it's not only that one policy option isn't going to achieve it. Rather, what we need is two plus two has to equal five, and there is an opportunity with sophisticated, thoughtful implementation of these strategies for it to achieve very significant results through their synergistic effects."

Focusing on consumers
To put a serious dent in oil demand and emissions, the report says that policymakers will also need to look beyond automakers and fuel companies and begin incentivizing cutting emissions and fuel usage for consumers. Targeting consumers, Frankel said, would amplify the effectiveness of any new regulation.

"We've rested, certainly on and off to be sure, but essentially over the last 30, 35 years or so, on aiming, through regulation, at the producers," he said. "They have stronger force, for example, if consumers are reacting to what's happening in the marketplace. I'm not necessarily advocating it, but the reality is if prices are higher, then it increases the force of fuel efficiency standards in a regulatory regime."

The report is frank about how realistic some of its proposals -- like increasing taxes on gasoline -- are, given the current political climate. According to a poll released last March by Rasmussen Reports, 74 percent of Americans were opposed to an increase in the 18-cent federal gas tax that would fund transportation needs, evidence of a trend against taxes that Frankel said the committee was very aware of as it authored its report.

"One might ask, 'Are you advocating policy A or policy B?' and the fact of the matter is, and I think this does run through the report, we acknowledge the tremendous power of pricing in terms of influencing consumer choices and habits, but we also recognize that there's tremendous political resistance to using pricing," Frankel said.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500

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