As Americans and the world struggle with high oil prices and climate change, various policies to improve car fuel efficiency have been enacted, and more are being considered in both the United States and Europe. Yet review of recently available data on both on-road fuel economy and new car test fuel economy compiled from each country’s leading authorities shows that the US on-road fuel economy has been flat for almost 15 years, and major European countries and Japan have shown only modest improvements. Where do we go from here? EMBARQ Fellow Emeritus, Dr. Lee Schipper, has been exploring this and other related questions in an ongoing research project.

Original Version presented at the 2008 Transportation Research Board Annual Meeting.

Key Insights of Dr. Schipper’s Research:
How do US fuel economy standards compare with other developed countries?

• On road fuel economy of American cars and household SUvs has been stagnant for more than 10 years, with only a small improvement in the last three years. At the same time, fuel economy has been steadily improving over the same time frame in Europe and since 2000 in Japan. As a result,our 20.6 MPG and japans 23 MPG are still well behind Europe’s 29 MPG.
• Across industrialized countries, differences in car size/.weight/power and car use accounts for 80% of the three times higher car fuel use per person in the US. By the time the important new US standards affect every car on the road (approximately 2030-2035) the US on road fuel economy will catch up to where Europe is today. Why the lag in the US?

Why Increased fuel economy is only part of the solution to high oil prices and climate change

• The new US light duty fuel economy standards will reduce on road fuel use by 25-28% by 2035 compared with maintaining the present level of fuel economy. But with the number of drivers increasing, even this important step will, on its own, not be enough to bring fuel use to below its present levels.
• Much confusion about the direction of US fuel economy trends remains. For one thing the new standards specify test values of MPG. In practice, real driving deflates those values on average by 17-18% according to the way EPA tabulates them. Thus the new standards, 35 MPG, mean about 28-29MPG on the road. But it will be at least 2035 before every car on the road has met these new standards, which are scheduled to reach their final level by then. With the on-road average of US cars and household SUVs about 20.6 MPG in 2006, the standards represent about a 33-35% increase in MPG or a 28-29% decrease in fuel/mile.
• Fuel prices are an important determinant of future car use and fuel economy. At present, US households are now paying roughly the same share of their total budgets for road fuel as they did in the early 1980s. Put another way, the cost of fuel for 1 mile of driving in 2008 is close to its high during the same period. What is not surprising is that vehicle use is falling and car buyers are flocking to smaller cars.
• No matter how you examine the industrialized world, fuel prices and fuel economy standards both determine fuel efficiency and fuel use. Relying on one factor alone – the US approach until world events took over – leaves fuel use higher than desired.

What About Quick Fixes?

• A higher share of diesel cars in Europe, like “flex fuel” in the US, have produced few results and even backfired, leading to higher fuel use. On-road, the stock of diesels in Europe shows no more than a 10% savings in energy use per mile compared with on–road gasoline. Because diesels are driven so much farther than gasoline cars (for many reasons) it is difficult to assign any energy savings to the higher share of diesels.
• One quick fix that has had demonstrable results was the rapid increase in the sale of mini-cars (under 660 CC) in Japan to about 1/3 of the stock. Americans are starting to exercise this option, if not literally, as the only major seller in the US to show an upswing in sales is Honda.
• The other fix taking hold in the US is reductions in car use. These must deepen if the US is to reduce oil use and CO2 emissions from cars significantly.
• Since it takes decades to replace all the fuel guzzling cars on the road with new ones that comply with the 2020 standards, saving fuel in the coming years must count on both consumers buying less powerful new cars that beat the standards, driving them less, and considering carefully the implications of their next home and job choice.

Summary of Dr. Schipper’s Research:

As Americans and the world struggle with high oil prices and climate change, various policies to improve car fuel efficiency have been enacted, and more are being considered in both the United States and Europe. Yet review of recently available data on both on-road fuel economy and new car test fuel economy compiled from each country’s leading authorities shows that the US on-road fuel economy has been flat for almost 15 years, and major European countries and Japan have shown only modest improvements in response to “voluntary” agreements on fuel economy, steadily rising fuel prices (since 2002), and to some extent shifts to smaller cars and 2nd family cars.

Figure 1 shows fleet fuel economy, expressed in miles per gallon. Cars and household light trucks in the US attained about 20.6 miles per gallon in 2006, a figure that has fluctuated but is not very well known – US on road fuel economy has not been measure in a wide sample of vehicles since 1985, and the figures here are taken from US DOT tables that depend on critical assumptions on miles driven and the division of gasoline sales to cars and light trucks/SUVs.

Figure 1. On-Road Fuel Economy

Note that in these figures, Diesel and other fuels are counted at their energy equivalent. For diesel this means a gallon of diesel counts as 1.12 gallons of gasoline. Thus the miles per gallon of diesel figure is deflated by 1.12 to account for the extra energy in the diesel.

Figure 2 shows fleet fuel economy, expressed in gasoline use per kilometer on the left hand axis or CO2 emissions (in grams/kilometer) on the right side. For reference, the present US fleet of cars and the 80% of light trucks used as cars attain 11.5 l/100 km. 10 l/100 km is the equivalent of 23.65 MPG.

Figure 2. On-Road Fuel Economy and CO2 Emissions.

At the same time, the sales weighted average of new vehicles sold in the European Union, expressed in terms of their implied CO2 emissions, have fallen short of 2008 goals. A significant part of the improvements in Japan is related to the growing share of mini-cars (displacement under 660 CC), suggesting that technology is not the only factor that can or will yield significant and rapid energy savings and CO2 restraint in new cars. Sales in the US in 2007 seem to have finally moved towards greater fuel economy, as real fuel prices doubled compared to pre-2002 values. Japan, EU and the US have strengthened their goals and, for EU and the US, turned these into new standards.

Figure 3 puts present on-road fuel economy, recent achievements from sales, and new standards on a comparable basis. Using factors recognized by each country’s leading authorities, new vehicle standards are inflated to reflect their on – road values (18% for the US and California, 12% for EU and 33% for Japan). In contrast to other presentations, this formulation shows what we can expect from the standards as new vehicles roll off of showrooms and into households. The US standards, while significant, will bring the US fleet sometime after 2030 about to where EU lies today. For comparison, California is also shown in these figures.

Figure 3. On Road Fuel Economy, New Vehicle Fuel Economy, new vehicle fuel economy standards (US) or voluntary agreement levels (Japan, EU present), suggested standards (EU, Japan, California proposed or strengthened).

Fuel economy technology, while important, isn’t the only factor that explains differences in tested or on-road fuel economy when comparing vehicle efficiency and transport emissions in different countries. Fuels, technology, and driver behavior and traffic also play significant roles in how much fuel is used. As long as the upward spiral of car weight and power offsets much of the impact of more efficient technology on fuel efficiency, fuel economy will not improve much in the future. And as long as the numbers of cars and the distances cars are driven keep creeping up, technology alone will have a difficult time offsetting all of these trends to lower fuel use and CO2 emissions from this important sector. With high fuel prices, the upward spiral of weight and power is flattening, particularly in the US, where SUVs are going into hibernation.

Interestingly enough, the upward trend in car use, measured as vehicle-kilometers per capita, has slowed or reversed in most of the countries in this study. Figure 4 portrays this key indicator for each year since the early 1970s (1984 for Canada) against per capita GDP for the same year. One expects VKt to grow with GDP, albeit somewhat slower. What was found was that the growth has stagnated everyone, certainly related ot higher fuel prices.

Figure 4. Per Capita car use vs. Per Capita GDP (real $2000), converted to US dollars At purchasing power parity of 2000.

While recent changes to fuel efficiency regulations in the United States will reduce long-term impacts of cars on climate change or oil consumption from where they were headed, changes lower vehicle weight, driving distances, and engine power will be needed as well to drive fuel use and emissions below today’s levels. Fuel and carbon taxes, and an end to subsidies for ethanol and other alternatives would stimulate this decline. .

There is no question that higher fuel prices exact a toll on drivers. The 2007 Consumer Expenditure Survey says that 5.4% of household’s expenditures in that year went for fuel, almost double the share of the early part of the decade. By now that share has increased to close to its previous peak in 1980-82. Combing real fuel prices and on-road MPG it is estimated that by 2008 the cost of fuel for driving 1 mile approached its historic high in the same 1980-82 period. These impacts hurt, but overall can be mitigated.

Recent efforts to raise fuel efficiency for automobiles in the United States is a welcome first step for reducing carbon emissions from the transport sector. Schipper also suggests that fuel efficiency is not the only step that should be stimulated by national or local policies. Measures that reduce or even eliminate the need for driving must be promoted. These include transit oriented development, mixed-use, high-density neighborhoods, parking and road fees, mass transportation systems and congestion pricing schemes, like the one Mayor Bloomberg has proposed for New York City. In the context of a sustainable transport package, such measures would improve the quality of transportation with significant fuel saving and CO2 restraint as a co benefit.

Fuel Economy Trends in Industrialized Countries: When the Rubber Hits the Road

About the Presenter

The lead author of the International Energy Agency’s “Road from Kyoto”, Dr. Schipper is currently a visiting scholar at University of California Berkeley’s Transportation Center, and founder and now Fellow Emeritus with EMBARQ - the World Resources Institute Center for Sustainable Transport. He is a member of the National Academy of Sciences Sustainable Transport committee and served on the Swedish Transportation Research Board Environment committee. Schipper has served in senior positions at organizations including the OECD Development Centre, Paris; the Shell Foundation; the International Energy Agency, Paris; and the Lawrence Berkeley Laboratory. Dr. Schipper is a member of the Global Business Network and a senior associate of Cambridge Energy Research Associates. He has been a fellow at the Industry and Energy Department of the World Bank, and a visiting researcher with Group Planning, Shell International Petroleum Company, London. Dr. Schipper has appeared nearly 200 times in the press, including The New York Times, CNNMoney, TIME, New Scientist, NPR, Christian Science Monitor, USA Today, BusinessWeek, Washington Post, Grist, and U.S. News & World Report. He has authored or co-authored more than 100 scholarly papers.