Standards Energy Star and CAFE Part 1

Standards Energy Star and CAFE Part 1 -...

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Unformatted text preview: Standards:
A
Non‐Price
Method
 •  The
standard
“Command
and
Control”
(CAC)
 approach.
 •  Although
not
so
popular
among
economists,
 remains
an
important
tool.
 •  Two
cases:
 •  EPA:
“Energy
Star”
program
 •  C.A.F.E.
standards
 The
Energy
Star
Program
 Energy
Star
 •  •  •  •  •  •  Not
actually
a
“CAC”
mechanism:
 There
is
no
“command.”
 An
informaFon
system.
 Why
needed?
 Complexity
of
good

 Complexity
of
consumer
moFvaFons
in
 purchasing—energy
efficiency
only
one
 aspect.
 Change
in
Energy
ConsumpFon,
 Major
Appliances
 The
Refrigerator
Story
 Benefits
Summary

 (EPA
Annual
Report)
 Avoided
Emissions
 EPA
ProjecFons
 Automobiles
 Polluters
‘R
Us!
 •  About
20
lbs
of
CO2
is
released
into
 the
environment
for
every
gallon
of
 gasoline
used
by
a
vehicle.

 •  America's
cars
and
trucks
pump
1.4
 billion
tons
of
heat‐trapping
CO2
into
 the
atmosphere
every
year.
 How
This
Works
 •  Gallon
of
gas:
~6.3
 lbs.
 •  Most
of
CO2
weight
 is
O.
 •  So,
how
to
get
to
1
 gallon
=>
20
lbs
of
 CO2?
 •  To
calculate
the
amount
of
CO2
produced
 from
a
gallon
of
gasoline,
the
weight
of
 the
carbon
in
the
gasoline
is
mulFplied
 by
44/12
or
3.7.
 •  Since
gasoline
is
about
87%
carbon
and
 13%
hydrogen
by
weight,
the
carbon
in
a
 gallon
of
gasoline
weighs
5.5
pounds
(6.3
 lbs.
x
.87).
 •  We
can
then
mulFply
the
weight
of
the
 carbon
(5.5
pounds)
by
3.7,
which
equals
 20
pounds
of
CO2!
 A
Very
Big
Deal
 Boiling
Frogs
and
Grandchildren
 Motown
NaFon
 US
Gasoline
ConsumpFon
 Ridin’
Around
in
Our
Automobiles
 Vehicle
Miles
Traveled/Person
(miles/day)
 Weird
 Prices

 Make
 a
 Weird
 World.
 The
Cost
of
Filling
the
Tank
 Prices
and
Gasoline
Use
 “Gee,
whiz!
Ya’
Mean
to
tell
me
that
 demand
curves
slope
down?!?!”
 •  Clear
that
U.S.
is
a
grotesque
internaFonal
 laggard
in
taxing
petroleum
fuels.
 •  There
have
been
a
few
anempts
to
use
price
 mechanism
to
cope
with
this.
 •  Gasoline
taxes
levied
at
state
level.

 •  A
federal
anempt?
 •  “Good
luck
with
that!”
 Clinton
Is
Overwhelmed
 •  President
Bill
Clinton
proposed
a
BTU
tax.
 •  Would
be
levied
upstream,
“point
of
 collecFon”
 •  Faced
immediate,
vociferous
opposiFon
from:
 •  Oil
companies
 •  Farm
lobby
 •  NaFonal
AssociaFon
of
Manufacturers
 Proud
to
be
Polluters.
 •  Final
outcome:
 •  Added
a
whopping
$0.1384
 per
gallon
of
gasoline.
 •  Added
$0.1
per
gallon
of
 aviaFon
fuel.
 So,
what
to
do?
 •  C.A.F.E.
standards
can
be
considered
an
 alternaFve
approach.
 •  Began
in
1975,
when
C.A.C.
was
the
only
 approach.
 •  Three
phases:
 •  One:

from
incepFon
to
~1986
 •  Two:
the
ostrich
era:
~1986‐2008
 •  Three:
recent
changes.
 Corporate
Average
Fuel
Economy
 •  In
response
to
rising
oil
prices
and
crisis
of
 1973‐1974,
Congress
enacted
the
Energy
 Policy
and
ConservaFon
Act
(EPCA
P.L.
94‐163)
 of
1975.

 •  Established
corporate
average
fuel
economy
 (CAFE)
standards
for
passenger
vehicles
model
 years
starFng
in
1978.
 •  The
CAFE
standards
established
a
minimum
 average
mileage
a
vehicle
class
must
obtain
 per
gallon
of
gasoline.
 The
Big
Loop‐hole
 •  SUVs
(along
with
minivans
and
pickup
trucks)
are
 classified
as
"light
trucks"
and
are
held
to
 different
standards
as
passenger
cars.
 •  In
2006,
the
standard
for
passenger
cars
was
27.5
 mpg,
while
for
light
trucks
it
was
only
20.7
mpg.

 •  These
standards
are
averaged
for
all
vehicles
in
a
 specific
class,

 •  So,
can
also
have
egregiously
inefficient
vehicles —provided
others
compensate
to
meet
average
 requirement.
 ...
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This note was uploaded on 01/12/2010 for the course ENVS 141 taught by Professor Richard during the Fall '09 term at UCSC.

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