Exploring Factors Affecting Compliance of CAFE and GHG Standards: A Consumer Choice Based Analysis

This study explored factors that affects the compliance ability of the car industry with both CAFE and GHG standards with a time framework spanning over two phases of the National Program (phase I: 2012 ~ 2016 and phase II: 2017 ~ 2025). To evaluate the compliance, we considered a consumer choice based simulation approach to estimate the market acceptance of fuel efficiency (FE) technologies and alternative fuel vehicle (AFV) technologies in new vehicle sales for the entire national light-duty vehicle fleet. This simulation work was conducted using the Department of Energy’s Market Acceptance of Advanced Automotive Technologies (MA3T) model, a consumer choice based market simulation tool. The results showed both standards can be met even under conservative scenarios where AFVs are excluded AND the projected FE costs are high (based on the NRC high-cost projection). The compliance robustness is encouraging, but we also found two significant risk factors –low oil price and consumers’ undervaluation of fuel economy. We also quantify the benefits of AFVs in helping the car industry in complying with the entire National Program, and found the AFV contribution increases over time to a significant level at +1.1 MPGGE, -4.7 gCO2/mile and 10% extra technology cost tolerance on top of the NRC high-cost estimate. Read full paper (PDF)