CAFE Standards

Currently the U.S. is the world leader in oil consumption. The CAFE (Corporate Average Fuel Economy) standard is defined as the the minimum mileage per gallon a vehicle class must meet. In todays life styles people are buying and driving bigger cars. The average new fleet of cars had a mpg lower than the one we had in 1987 because of the fact that our automobile industry is seeing an increase in inefficent SUV's and light trucks. President Bush proposed that we need to break the light tuck category up into six different sub-categories. In these differrent categories there was trucks ranging from 21 mpg to 28mpg. Due to the recent increase in the price for oil Presedent Bush has jumped in to help. From the knowledge that I posses about the prices for a barrel of oil and the increasing gas prices I wouldnt be supprised to see gas over $4 this summer. Pesident Bush's has taken the action to ask Congress for the authority to investigate an increase in the CAFE standard. In 1990 there was a bill that was called for that would increase the CAFE standard by 40%, and if this bill was made into a law cars right now would average 40mpg and light trucks 29mpg. From the auto industries point of view since cars have to become lighter and smaller the costs of of re-enginering cars to make them more fuel efficent is expensive. By trying to reduce the weight of vehicles it reduces the size of steel content which has resulted in a 1300-2600 additonal trafic fatalities. Form an environmentalists point of view in the 80's cars were more fuel efficent, as for now cars cars have become 20 percent heavier. From another point of view as an economist mandating pollution controls is a good idea.