I hope to address this topic in more detail soon, but here's a quick end-of-the-year take on the new CAFE standards included in Congress's recently passed legislation. The new standards are a giant step in the right direction in terms of reducing energy consumption and establishing some measure of U.S. energy independence. In a recent presentation to the Regional Commission, Stephen Walz - Governor Kaine's energy Czar - stated that 43% of energy consumption in Virginia comes from transportation; a 28% increase in efficiency, reflected in the increase in CAFE standards from the current 27.5 mpg to 35, therefore reflects a significant potential reduction in petroleum usage in Virginia alone.
But before we get too excited, consider how the increase is implemented. The legislation requires that all new cars sold in the U.S. meet the required standards by 2020, with the phase-in beginning in 2011. So, we've got four years before the technology even starts to change, and another nine after that before 100% compliance is reached. This assumes, of course, that implementation is not delayed by lawsuits or technological issues (though there seems to be consensus that the new standards are easily attainable with current technology, much less what might be available in another 15 years); some litigation, I'm sure, is bound to delay the process somewhat. Optimistically, market forces might actually drive some manufacturers to implement the changes much, much earlier than the 2020 target - I think we're already seeing a shift in consumer demand towards fuel-efficient cars vs. gas hogs, and the recent popularity of the Prius certainly indicates that some segment of the market is willing to pay a premium for such vehicles. Still, given the recalcitrance of the American auto industry thus far - and, honestly, the taste of American drivers - I wouldn't expect the standards to met until the date set by the law.
So, by 2020 we'll have all new cars running on CAFE standards of an impressive 35 mpg. But keep in mind that the standards only affect new cars - older cars are, of course, grandfathered in under the old standards. Let's look at what that means:
According to Kelly Blue Book, as of right now there are 213 million cars on the road each year. Every year, Americans buy 16 million new cars; assuming these ratios remain steady, this means that by 2020 only 7.5% of cars on the road will meet the new efficiency standards. Certainly, gradual increases in performance over the intervening years will result in an overall higher gas mileage across all cars on the road; still, let's keep in perspective that a change implemented in new cars in 2020 will actually take much, much longer to propagate across American roads; we'll have to wait for all those cars to be replaced before we'll see actual, dramatic decreases in fuel consumption and vehicle emissions, and at 213 million cars and growing it will be long after 2020 before that comes to pass.