FreedomWorks

In the 1970s, disco was groovy and Congress enacted a lot of counterproductive, over-regulatory energy policies. Subsequent years saw both polyester suits and command-and-control energy policy fall out of favor, to the nation’s benefit. The heavy hand of Uncle Sam, however, today still governs automakers with an outdated scheme called the Corporate Average Fuel Economy (CAFE) standards. In some quarters, disco is making a comeback, and similarly the bad ideas embodied in CAFE are also threatening to make another go-round on Capitol Hill.

Back in 1975, Congress responded to the 1973 OPEC oil embargo by creating the CAFE regulatory program. CAFE works by mandating a “sales-weighted mean” or average of the fuel economies for the fleets of new cars and light trucks that a manufacturer sells each year. As it currently stands, every automaker must meet a total average mileage requirement for their fleet of cars of 27.5 miles per gallon. For heavier trucks and SUVs, the standard is lower, rising from 21 mpg this year to 22.2 mpg in 2007. Got that?

In the face of rising gasoline and oil prices, some in Congress and the Administration are feeling the temptation to tighten the CAFE standards for U.S. automotive fleets.
In September, the National Highway Traffic Safety Administration proposed a major tightening of CAFE for light trucks. And earlier this month, Sen. Pete V. Domenici, New Mexico Republican and chairman of the Senate Energy and Natural Resources Committee told The Hill newspaper that "…we must take another look at the CAFE standards” in the wake of Katrina. Tightening CAFE, however, would be a major policy blunder. In fact, CAFE needs to be substantially reformed or even repealed and replaced with market-based incentives to reduce fuel consumption and improve air quality.

First, CAFE has not really worked. America’s national “total fleet fuel economy” peaked in 1987 at 26.2 mpg and has been declining slightly since then, primarily because the nation prefers heavier and more powerful light trucks and SUVs, which have a lower fuel economy. Beyond consumer preference, CAFE also does not work in part because as cars become more fuel-efficient, we drive them further.

More troubling is the tragic unintended consequence of CAFE, which prompts automakers to build cars that are lighter and use less steel. The result is cars that are less safe, and the additional deaths of literally thousands of Americans on our roadways every year. A 1999 USA TODAY analysis of crash data from the National Highway Traffic Safety Administration and the Insurance Institute for Highway Safety found that CAFE standards have resulted in about 46,000 people dying in accidents where the victims would have survived if their cars had been bigger and heavier. That is an extraordinary loss of life and a largely untold story.

Many in Congress and the environmentalist movement, and their co-conspirators in the mainstream media, seem to care more about imposing misguided feel-good conservation measures on American motorists than protecting the lives of innocent drivers. It is outrageous that some of the biggest Congressional supporters of CAFE also oppose new drilling for U.S. oil in Alaska (drilling that can be done using modern techniques that minimize the environmental impact) and oppose construction of new oil and gas refineries. These politicians and their environmentalist supporters are making an explicit choice that values the false promise of CAFE over safer cars and trucks for American families.

CAFE was part of a number of ill-considered policy responses to the oil shock that also included lowering the national speed limit to 55 mph and imposing price controls on oil and gasoline. Price controls and the national speed limit were both foolish ideas and have been repealed, but sadly CAFE lives on.

The goals of CAFE are admirable, but there are much better ways to encourage conservative than mandating the design of automotive fleets. We will never be able to regulate our way to fuel economy. It is time to reform or repeal CAFE, and instead pass forward-thinking policy measures that use market mechanisms to advance the goal of conservation while also giving consumers more choice and safety. Let consumers choose and let markets work.