CAFE Standards and USA CO2 emissions

Given that the US Administration has lodged a commitment with the UNFCCC to reduce US emissions by 17% by 2020 (relative to 2005), the question remains as to how this might be accomplished. Clearly there is no overall national plan or legislative approach, which therefore means the Administration is largely relying on a range of existing serendipitious (from a CO2 perspective) policies, state action such as in California and possibly some good fortune (e.g. the dash to gas now taking place as shale gas production increases) to achieve the goal. In a recent post prompted by the remarks of the US Ambassador to Australia that it was “absolutely realistic” to believe the US would meet its target, I estimated that it was theoretically possible for this to be true, based primarily on natural gas backing out coal in the power generation sector and revised CAFE standards reducing consumer gasoline demand. 

Since then the Administration has reached agreement with the vehicle manufacturers on even tougher CAFE standards, as announced at the end of July.

 JULY 29^th 2011, WASHINGTON, DC – President Obama today announced a historic agreement with thirteen major automakers to pursue the next phase in the Administration’s national vehicle program, increasing fuel economy to 54.5 miles per gallon for cars and light-duty trucks by Model Year 2025. The President was joined by Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo – which together account for over 90% of all vehicles sold in the United States – as well as the United Auto Workers (UAW), and the State of California, who were integral to developing this agreement.

This therefore seemed like a good opportunity to do a bit more analysis of the third green bar on the diagram above which represents the potential drop in CO2 emissions in the transport sector. The focus below will only be  on cars and light trucks (i.e. largely households and small businesses), but of course further opportunity also exists with the recently announced proposal for trucks.

August 9^th, 2011 Bloomberg – U.S. truck makers will improve tractor-trailer fuel economy by about 20 percent by 2018, saving $50 billion in fuel costs over five years and decreasing carbon- dioxide emissions, President Barack Obama said. The administration’s plan – the first attempt to regulate the efficiency of heavy-duty trucks, including city buses and garbage trucks — will save 530 million barrels of oil, according to a statement from the White House today.

Our model assumes the rigid application of the new CAFE standards through to 2025, but based on the EPA “Window Sticker” numbers which more closely reflect what a given vehicle might actually achieve when in service. For example, instead of using the CAFE standard for cars in 2025 which ranges between 46 and 61 mpg, we used 38.5 mpg and similarly for light trucks (30 mpg vs. CAFE range of 30-50 mpg). We have also assumed a total fleet growth over the period 2010 to 2025 from some 250 million to nearly 300 million vehicles, but have kept miles driven per vehicle a constant at just over 11,500 per annum. The model scraps at the oldest (and least efficient) end of the fleet and starts from 1990 where we assumed a homogenous fleet. The model does not currently include biofuels or the impact of electrification, so this is purely the impact of CAFE on a standalone basis.

Starting in 2009 with total fleet CO2 emissions at 100, the model shows that by 2020 emissions have fallen to 85, and then 75 by 2025. Our calculated fleet emissions for 2009 are 1.21 billion tonnes CO2 (vs. IEA 1.45 billion tonnes for all road transport, including trucks and buses, in 2008), so this change represents a reduction by 2020 of 180 million tonnes of CO2 per annum against a US total GHG emissions of some six billion tonnes per annum in 2005.

This matches well with the original assumptions in the chart above. As noted in the original post, this is an important contribution to US emission reduction efforts between now and 2020.

Thanks to my colleague Alex Ratcliffe for developing the supporting spreadsheet.