papers within deadlines - Guaranteed!
Free Term papers Directory
Corporate Average Fuel Economy
The market failures hinged on a number of
outside variables which could have had a drastic effect on domestic
--> Resource Scarcity drove the American public to call for a more
efficient means of managing its resource use due to a) oil embargos on
non-domestic products and b) skyhigh prices at the pump.
--> Conservation of the world's non-renewable resources cams to the
foreground with a) higher pump prices and b) forecasted resource
expenditure before the year 2000.
*** With Corporate Average Fuel Economy in place the market failures
should be partially alleviated and pressures due to restricted
international resources should subside. The regulated fuel efficiency
should allow the market to resume its national flow and regain stability
without further manipulation.
--> Reliance on imported fuels would be minimized because of the a)
decreased demand for fuel consumption and b) lowered fuel demand allowed
for domestic producers to meet the basic needs of the public.
--> Maximum fuel efficiency would a) cut the amount of fuel consumption
thus nullifying high pump prices and b) raise the level of conservation
by lowering the amount consumed.
Although the intentions of Corporate Average Fuel Economy in the 1970's
was thought to be a cure-all but, over the long run it has turned out to
be a flop. The variables on which it was based, turned out to be almost
--> Lower Gas Prices have a) caused the public to simply use more fuel,
b) drive more frequently due to less fuel consumption and c) look beyond
fuel economy when in the market for a new vehicle.
--> Quality Depletion of the total domestic car fleet due to special
attention to only the fuel economy while ignoring: 1) performance, 2)
acceleration and 3) handling.
*** With CAFE becoming a long-term flop, in its first years it did have
its benefits. Both the public sector and the private interests gained
from the regulation in the beginning.
--> Public Interests gained from this legislation due to a) to ability
to get more mile for their buck, b) increased (initial) conservation and
c) higher standard of living through the money which was saved in fuel
--> Private Interests were kept happy by a) the "credits" earned by each
manufacturer when standards were exceeded before set deadlines and b) no
new taxation on the fuel industry to alleviate to e conservation
CAFE could have had a very successful outcome if the original variables
of fuel costs, resource availability and resource stability would have
continued on the path they were taking. Because of changes in each of
these variables CAFE did not have the resources to remain a successful
regulation. CAFE did help to improve the energy efficiency of motor
vehicles, but due to short-comings in the regulation other aspects were
allowed to slip away and actually decline improvements.
--> The Uniformity of Corporate Average Fuel Economy did not allow for
any outside manipulation of the problem at hand, thus only allowing for
a one dimensional view of the fuel economy standards.
--> CAFE Separated the standards for both cars and trucks therefore a)
resource conservation was limited to only the car fleet and b) depletion
of automobile quality.
-->With Lower Fuel Costs the consumer a) actually consumed more fuel
because of the cheaper price and b) when in the market for a new
automobile they began to look for other features besides fuel economy:
1) size, 2) reliability and 3) performance.
*** In conclusion, I believe that if the initial concept of the CAFE
policy would have been modified only slightly, to encompass small
changes in the market place, it could have had a more beneficial
outcome. CAFE originally was a good concept for both the consumer and
the industry, but because of its downfalls it became a hindrance to the
BACK TO DIRECTORY |
BACK TO SUB DIRECTORY:
Disclaimer: Term papers are for research purposes only.
© 2012 Ghost
All Rights Reserved