Mexico City Outlines Green Plan
Report: New US Vehicle Fuel Economy Increasing to Highest Level Yet

Study: New US Vehicle CO2 Emissions Dip 3% from 2004 to 2005, But Remain Up 1.5% Since 1990

Es3
Average new car and light truck CO2 emissions rate. The sharp drop corresponds with the initiation of CAFE. Click to enlarge. Source: Environmental Defense

While the average CO2 emissions rate from new vehicles sold in the US fell 3% from 2004 to 2005, it remained up a net 1.5% since 1990, according to a study by Environmental Defense. The report examines the automakers’ overall carbon burden, reflecting the efficiency of vehicles and the carbon intensity of the fuel they run on, as well as new vehicle sales.

The study, Automakers’ Corporate Carbon Burdens, Update for 1990-2005, found that GM, Ford, and DaimlerChrysler all saw a net worsening of their fleet-average CO2 emissions, while Toyota and BMW, in spite of rising light truck sales, cut their average per-vehicle CO2 emissions rate—the only automakers in the US to do so. Nissan had the largest increase in its average CO2 emissions rate due to the combined effect of rising truck fraction and declining truck fuel economy.

The six largest automakers in the US market—GM, Ford, DaimlerChrysler, Toyota, Honda and Nissan—had a 90% market share and accounted for 90% of new fleet carbon burden in 2005. With the exception of Toyota, the average fuel economy for the Big Six automakers decreased from 1990 to 2005.

This trend is largely explained by each firm’s rising truck fraction, resulting in higher fleet average CO2 emissions rates. All automakers significantly expanded their light truck offerings, with the overall light truck fraction growing 22 points over this 16-year period.

Nissan had the largest increase in its average CO2 emissions rate due to the combined effect of rising truck fraction and declining truck fuel economy. Toyota’s 125% increase in new vehicle carbon burden was the largest among the Big Six. It is, however, the only firm among the Big Six that showed improved fuel economy, despite the company’s growing truck fraction. Its carbon burden increase therefore was solely driven by its sales success. The fleet average CO2 emissions rate of both GM and Ford in 2005 was higher than in 1990 due to their higher reliance on trucks. Nevertheless, their new fleet carbon burdens fell below the 1990 levels as both companies saw nearly 10% drops in sales between 1990 and 2005.

Summary findings for the Big Six include:

  • General Motors. GM’s new fleet average CO2 emissions rate was 3 percent higher in 2005 than it was in 1990, while market share dropped 10 points. GM’s new car fuel economy steadily increased from 2000 through 2005, reaching a value 6.4% higher in 2005 than it was in 1990, as a result of a general increase in the fuel economy of some high-volume models.

    However, rising light truck share and flex-fuel vehicle (FFV) credits more than offset the recent increases in the fuel economy of many GM models. Carbon burden fell 6.5% but remained the largest overall.

  • Ford. Ford’s market share dropped 7 points from 1990 to 2005, leading to a 5.8% drop in carbon burdens. Heavy use of FFV credits caused a 4.3% increase in fleet average CO2 emissions rate, accounting for most of Ford’s total 4.7% increase in emissions rate.

  • Ford’s car saw its fuel economy increase 1.2 mpg from 2004 to 200, due to market shifts to more efficient vehicles. Ford’s 2005 new fleet average CO2 emissions rate was down 5% from its 2004 peak as a result of lower sales of the most fuel-consuming models.

  • DaimlerChrysler.  As a result of higher truck share and net lower fuel economy, the company’s CO2 emissions rate was up 4.8 percent from 1990 levels, and the worst among all automakers. Market share increased 3 points. The company’s truck share increased by 22 points to reach 72% in 2005, the highest among all automakers.

    Truck fleet fuel economy rose 7% from its lowest levels in 1999 but as of 2005 remained down a net 0.4% from its 1990 level.

  • Toyota. Toyota’s CO2 emissions rate decreased 3% while its market share rose 7 points from 1990 to 2005. Its carbon burden growth—the highest among the Big Six—was due entirely to increased sales.

    Despite a 17 point increase in the truck share of its sales, Toyota’s average new fleet CO2 emissions rate dropped as its CAFE levels improved 13.6% for cars and 5% for trucks. Of the 13.6% improvement in Toyota’s average new car fuel economy, 5.4% came from steady fuel economy improvements and strong sales of the Corolla, and 4.2% came from the introduction and growing sales of the Prius.

  • Honda. A rapidly growing truck fraction pushed Honda’s CO2 emissions rate up 4.4% while its market share gained 1.6 points from 1990 to 2005. Nevertheless, the company remained the fuel economy leader with a combined car and light truck average of 29 mpg. The company’s average new car CO2 emissions rate dropped by 7.6%, corresponding to an 8.2% fuel economy gain over 1990.

    Since entering the light truck market in 1997, Honda’s truck share grew at an average 4.5 points per year, reaching 40% in 2005.

  • Nissan. Growing truck reliance and declining truck fuel economy pushed Nissan’s CO2 emissions rate up 9.2 percent, the most among the Big Six, while the company gained 2 points of market share from 1990 to 2005.

    The truck fraction of Nissan’s sales grew from 27% to 42% while its light truck fuel economy dropped 17% between 1990 and 2005. The car-to-truck shift alone accounted for 3.5% of the 9.2% overall growth in Nissan’s CO2 emissions rate from 1990 to 2005.

    Nissan was the first overseas automaker to use FFV credits, which inflated its combined CAFE by 0.5 mpg as of 2005 and pushed its CO2 emissions rate 1.8% higher than if the company had achieved the same fuel economy levels without the credits.

Resources:

Comments

Rafael Seidl

So basically this just confirms that in 2004-2005, buyers started to switch from gas guzzling trucks and truck-based SUVs to more frugal cars and car-based CUVs.

This is a welcome development but obviously, the higher disposable income/available credit at the time meant that virtually all models sold were larger, safer, more luxurious, heavier and more powerful than their resp. predecessors in 1990. In that context, the fact that fleet average CO2 emissions only increased by 1.5% is actually a feather in the cap of drivetrain engineers.

It also underlines that anyone who thinks that improving drivetrain efficiency alone will be enough to curb CO2 emissions is being unrealistic. People love owning big cars, in part because they themselves have become fatter. Besides, those fleet average CO2 emissions are based on certified official test cycles. They do not take into account that many people put more miles per year on their vehicles in 2004-2005 than they used to in 1990 because they had already been priced out of the housing market close to their place of work.

Bottom line: the only measure that has been proven to work is to discouage driving by making it expensive. This can and does take many forms, from higher fuel taxes to higher license fees to road pricing/congestion charge schemes. All of these curtail the freedom of movement of low earners, who understandably hate them. So do politicians who want to get re-relected when they're not too busy playing footsie in the mens' room.

The uncomfortable fact is that US fuel taxes are too low to sustain demand for fuel-efficient vehicles if the price of oil should drop. The oil business is prone to booms and busts, e.g. if one of the major economies goes into recession. That, unfortunately, is probably just a question of when rather than if. In a capital-intensive business with long lead times such as car making, high volatility in long term operating costs (e.g. fuel) implies that adding more-or-less expensive bits to improve fuel economy is a rather risky bet. People may be clamoring for higher MPG today, but that demand is a mile wide and an inch deep because consumers assume that risk in terms of resale values.

Ergo, if policymakers decide that the collective risk of ever-increasing dependence on Russian and OPEC oil is not worth taking, they need to drum up demand for solutions that reduce the consumption of crude oil. That means, first and foremost, encouraging consumers to buy vehicles that get higher mileage. It also means encouraging urban architects and traffic planners to increase housing density, reduce commute distances and invest in mass transit. Obviously, the lead times for getting these changes in infrastructure implemented are very long indeed.

Getting there means cutting e.g. sales tax and raising fuel tax. The transition to Western European price levels needs to be slow (at least 10 years), predictable and de facto irreversible. Sadly, few if any US politicians have the courage to articulate this to a US population reared on cheap oil.

Bob Bastard

Rafael, I don't think the politician to whom you refer was playing "footsie" in the men's room. I think he wanted to play a different game altogether, although I suppose that could depend on your definition of the word footsie :)

jack

Rafael, you completely rock. You should have your own blog, if you don't already.

Joseph


Raising taxes and high gas prices are NOT the correct answers. I should be able to live where I want to live and drive what I want to drive.

We have had two robots, running around Mars, for more than two years with no gas. Engineers; I want my flying car with heated seats, moon-roof and zero pollution. I think I have waited long enough, it’s 2/3 the way through 2007 already.

DS

Raising taxes and high gas prices are NOT the correct answers. I should be able to live where I want to live and drive what I want to drive.
You're off your Meds again Joe.

JamesEE

What percentage of voters in the USA would support higher gasoline taxes? I bet the majority of GCC readers would vote for the taxes, but in the general population there would be 10 people screaming against it for every person in support. And most of the supporters would probably just keep quiet. I wish it wasn't so.

One glimmer of hope -- after the bridge collapse in Minneapolis most people, when asked about higher gas taxes (5 cents), said they supported it for improved public safety. If we can get people thinking about global warming as a public safety issue maybe attitudes will change, but I'm not holding my breath.

Cervus

All of these curtail the freedom of movement of low earners, who understandably hate them. So do politicians who want to get re-relected when they're not too busy playing footsie in the mens' room.

Not only low earners, but middle class people who live in small towns where mass transit is an impossibility. And even suburban dwellers who can only afford to live as close to work as they can afford (like myself), given housing costs. The local mass transit we do have would take me at least three hours--one way--to get to work.

The fact is that CAFE has done a very poor job. Can't deny that. Ford CEO Alan Mullaly actually favors a gas tax over CAFE standards, because:

"I have never seen a market-distorting policy like CAFE," Mulally said. "It's a policy that forces you to put out more small cars than there is consumer demand for to make the bigger cars that people really do want. You're trying to force the market instead of being market driven."

DS

The fact is that CAFE has done a very poor job. Can't deny that.
If you had your head any further up your tailpipe, you'd be looking out the carburetor.

Cervus

DS:

If you have anything of substance to add, if you can be reasonable and open-minded like Rafael is, I'm listening. If all you have in you is abuse, I think that speaks for itself.

jack

If you have anything of substance to add, if you can be reasonable and open-minded like Rafael is, I'm listening. If all you have in you is abuse, I think that speaks for itself.

His delivery may have been raw, but the message is correct. CAFE works remarkably well. It worked so well that it took the wind out of OPEC's sails for 15-20 years. It doesn't work well when the standards don't go up, which has been the case for many years now.

It's not the only viable solution, but it's certainly better than waiting around for oil prices to go through the roof.

George

Jack is right. I might "want" a car that weighs ten thousand pounds, is twelve feet wide, and is capable of better than one G acceleration, but to drive one would be a social crime and any sane society would be correct in denying me such a vehicle. Mullaly only thinks CAFE doesn't work because he can't seem to build a car that people want to buy. CAFE would also "work" a lot better if it wasn't hacked to let "light trucks" off the hook.

jack

And even suburban dwellers who can only afford to live as close to work as they can afford (like myself), given housing costs. The local mass transit we do have would take me at least three hours--one way--to get to work.

That is such a mythical cop-out.

I challenge anyone who claims that to tell me where they specifically work, and I guarantee I can find them affordable housing with good transit access to their workplace, or that can be gotten to by bike or by foot.

If their workplace is in some crazy car-dominated place or far off removed from the world (like a nuclear plant), then I can certainly find alternative means of employment.

People make these very specific choices about career and what they think their housing should be like (including things like school districts), then they turn around and claim it's "impossible" to not be car dependent.

I say hooey to that. It's a cop out. Just admit that you don't really value environmental issues as much as having a big yard, sticking with the specific job you have, or whatever. That's fine. But don't claim that it's "impossible" to live somewhere and work somewhere that doesn't involve burning a ton of fuel every day.

Stan Peterson

Jack,

I really grow weary of your ad hominem attacks on any all people lwho have different views than you.

I have gone out of my way not to call you on it; but it only seesm to embolden you.

If you have valid things to say, say them. Please desist from insulting all the other posters.

jack

I really grow weary of your ad hominem attacks on any all people lwho have different views than you.

Where is my ad hominem attack? Here's an actual ad hominem attack -- you're a nutjob.

I have gone out of my way not to call you on it; but it only seesm to embolden you.

Stan, you are crazy, ergo, I could care less what you think about me.

If you have valid things to say, say them. Please desist from insulting all the other posters.

You're joking, right? You're the guy who relishes talk about getting the New York Times blown up and says that Democrats only have "token" blacks in positions of power. Not only do you insult people, you're a flat-out racist jerk.

Go crawl back into your hole.

jack

A limited compendium of quotes from Stan "No Insults" Peterson:

* cease with the endless conspiracy plots
* your pet nostrums for un-economic anti-science technologies, and Doomsday prophecies
* YOU sir, do without. FIRST.
* PR flacks, lawyers, and cynics in it for the boodle
* all your ridiculous friends campaigns that only served to warm the atmosphere and have not removed a single gram from the inventory
* The Doomday nouveau-religionists of Gaia worship, like old time fundamentalists preaching the arrival of "fire and brimstone" just is not revealed to be true by modern Science.
* I'll bet these clods really intend to pass the carbon tax
* Goo and dribble.
* mobilizing a mass movement to insist on reviews and quality assessments, caused certain excess propaganda and to recruit some dimwits
* I feel sorry for you, Jack. You remind me of the mindless "No Nuke" sign carriers, who never really knew what they were protesting about, save it was away to meet "chicks". And of course, to have a little fun, and revolution for the hell of it, who are now feeling betrayed.
* All your braying is finding you to be virtually alone and with little support. Yes, hardheaded American capitalism and rational human beings have made their decisions, and moved on. Yes Jack, the open reasonable people have spoken.
* [The Democratic] Party that has no real Blacks in positions of power except as tokens.
* The Republican/Conservative approach is producing valid science. Only the Abortion political lobby that seeks justification for the principle the Eugenically it is all right to kill someone, for his body parts, to give to more important others. Sanger and Hitler saw eye to eye on that, and both tried tot empty the homes for retarded and other useless people like blacks, Jews and gypsies.
* It only incidental that Al Quedists now know they can plan operations against the facility at 229 West 43rd St New York without fear of interference. If some are in danger its the same as the NSA and SWIFT exposures.
* Environmentalism has abeen captured by the Socialist wartermelon crazies.
* I don't hink we need to liquidate them as they would do to us, ruthlessly given a chance. Tom Clancy had the Solomonic answer to these loonses in one of his novels. Drop them miles from anybody, stark naked, in the middle of the Amazon jungle and let them "Commune" with Nature."

Meanwhile, here's your "buddy" Cervus's opinion of you:
"You're an embarassment to scientifically-minded conservatives like me. We get enough froth and spittle from other commenters here, and you're not adding anything to this discussion."

Sleep well, Stanley.

Cervus

I suggest both of you cool it. You're two of a kind.

jack

I suggest both of you cool it.

We shall requote you, Mr. Holier Than Thou:
"You're an embarassment to scientifically-minded conservatives like me. We get enough froth and spittle from other commenters here, and you're not adding anything to this discussion."

Heed your own advice before dispensing it.

Now, do you actually have a response to my challenge? Or will you still claim that you simply are forced to be car-dependent?

I'd also like to know how one "can't deny that" CAFE doesn't work, even though after it was instituted, average fuel economy skyrocketed and gas prices collapsed. Hard to fathom how that is a "very poor job," when in the absence of increasing CAFE standards, fuel economy has at best stagnated and fuel prices have skyrocketed.

I know you feel compelled to believe in the Omnipotent Invisible Hand, but unfortunately this case doesn't work in the Hand's favor.

usa is the biggest consumer of gasoline and the biggest polluter as a result,not to mention the huge emissions from its factory farms, and all this to the detriment of the whole planet.

You can't go on living like that, creating havoc on the environment with someone else's resources.

It's time you brought your eco-footprint down to a sustainable level.

.......

Chris from europe

doggydogworld

Gas taxes will never have a meaningful effect on US oil consumption.

Gas taxes fall disproportionately on rural areas and low-to-mid-income workers. Not surprisingly, they are mostly favored by high income urbanites. Heck, a $5/gal tax would actually make their life better. As Leona Helmsley said, if we could just force all the little people onto mass transit my driver could get me to Tiffany's in five minutes!

Actually, even $5/gal isn't enough. After all, Europeans still use half as much oil as US citizens and the effect would be weaker here due to our higher wealth and lower population density. We'd need $8-10/gal for a 50% reduction. That's roughly $1.5 trillion of annual economic distortion. It's also a political impossibility -- flyover states control the US Senate. Voters in states with $30k median incomes will never vote to raise gas taxes $15-20k per household. The whole concept is absurd.

There is a better way.

For $5000 extra a PHEV can reduce gas consumption 80%. That's only $80 billion of annual US economic distortion instead of $1.5 trillion, yet it produces a much larger drop in oil consumption. Of course PHEVs by themselves do not reduce CO2. We also need more investment in renewables. It takes about $1000 worth of wind turbine to provide the electricity for each PHEV. So total cost is on the order of $6000 per car instead of $5000. It's still peanuts compared to gas taxes, and much more effective.

From an economic standpoint PHEVs are an absolute no brainer for the USA. A $100 billion annual investment in PHEVs and wind turbines saves the $300b we spend on foreign oil PLUS roughly $200b/year of Mideast military spending. A PHEV-based plan more than pays for itself.

If you want to be effective, focus your efforts in a direction which can actually produce change. PHEVs can produce real change. Why waste time daydreaming about politically impossible halfway approaches like gas taxes?

JamesEE

CAFE does work, but not as well as higher fuel taxes. Eleven years ago I went shopping for a small car. The GM dealer was having a blowout sale of 1996 Geo Prizms -- $4000 off the sticker price. Remember that gas was cheap then, with the oil price only $11/barrel. GM couldn't make big SUVs fast enough to satisfy demand. To get a bigger allotment of Tahoes the dealers had to move more small cars. They were making so much money on the big iron that they could afford to actually lose money on the small cars. It worked out well for me, but it didn't induce me to buy the Prizm. I was going to do that anyway.

Fast forward to today. The big three aren't competitive on the small cars, and have pretty much giving up trying. They are financially weak, and Toyota & Nissan have learned how profitable the big vehicles can be. There is no more unfilled demand for SUVs. So they can no longer give away a small car to earn the right to sell one large car.

Personally I don't feel sorry for the auto workers or GM management. But the political reality is that the federal government won't allow them to go under. That's why we have the ridiculous E85 loophole and the Hummer tax credit. Most people aren't watching closely enough to even know about those laws.

Finally, if the gas price is high enough it will change buying patterns and make CAFE irrelevant. CAFE is politically easier, but doesn't change consumer preferences much. We should increase CAFE and raise gas taxes.

DS

If you have anything of substance to add
Regurgitating Corporate PR is not adding substance. Unless of course you're employed to do that.

"I have never seen a market-distorting policy like CAFE," Mulally said.
Well Golly!!! It must be true if Mulally says so. It's not as if he's got a hidden agenda!

O Mawarisan

I suggest all three of you cool it. Please desist from insulting all the other posters.

jack

Gas taxes fall disproportionately on rural areas and low-to-mid-income workers.

It's called a low-income tax credit. Problem solved.

Henrik

doggydogworld

Very nice points and I can confirm your numbers. Just have a few things to note.

Instead, of giving a fixed $5000 tax credit for each new PHEV it would create more sensible incentives to make it a variable $500 tax credit for each kWh of battery used in every highway capable PHEV. The problem with a fixed $5000 tax subsidy is that it would induce car manufactures to produce a lot of “PHEV” with very short all electric range and pour mpg.

Indeed, the best legislation will unfortunately have to be rather detailed and consider a broad range of vehicles not just PHEVs for private transportation. You would need a specialized kind of kWh battery subsidy for busses, trucks, trains, EVs, farmers’ vehicles, etc.

I also very much agree with you that it is relevant to consider military expenses in Iraq when we think about the cost of this subsidy. Indeed, it could be a politically good idea to let the US department of defense administrates such a tax subsidy system simply to deliver the message to tax payers that it is a military necessity for the US to become independent of fossil transportation fuel. This message may be better understood and accepted than trying to convince tax payers that it also is a planetary necessity by become CO2 neutral to avoid the accelerating Global Warming.

Rafael Seidl

@ doggydogworld, Henrik -

"Gas taxes will never have a meaningful effect on US oil consumption."

Actually, they did have an effect on consumption when they were introduced in the 1970s along with CAFE. It's just that they haven't been raised since, not even to keep up with inflation. Your argument is really that there is no chance that US politicians will actually approve such an increase. Sadly, you may be right on that score. Then again, no-one has even dared to propose it. If not now, then when?

Note that I suggested trading off higher fuel taxes against lower sales taxes. I believe the latter are set and collected at the state level. Some states don't levy any sales tax at all, so they would have to achieve revenue neutrality in some other way. My point is, any change in US fuel taxes would require some co-ordination between the federal and state levels. That is difficult but not impossible.

In the EU, setting tax rates remains the fiercely guarded prerogative of each member state. However, there is an agreed minimum rate that must be levied by all signatories. This was recently raised - by unanimous consent - for diesel fuel, reducing its tax advantage relative to petrol. A few countries - notably Luxembourg - opted out of this mechanism because their refineries and hence, their finance ministries stand to profit from fuel tourism. It's a somewhat messy system but the net effect has still been far higher fleet average fuel economy than has been achieved in the US.

Btw, I would caution against providing market advantages for specific drivetrain technologies such as PHEVs. Fuels are a little more complicated in that energy and national security are tightly linked. Even so, boosting corn ethanol in the US and diesel in Europe over many decades can badly skew the market.

Such measures tend to be quickly hijacked by politicians as a way of dispensing patronage to favored industries in return for campaign contributions. This is not in the public's long-term interest because it stifles R&D investment into competing approaches. That's why it is important to build in expiration clauses from the outset, cp. the US "hybrid" tax credit (which also covers FCVs, CNG vehicles and clean diesel).

The comments to this entry are closed.