Andrew Samwick Says: Don't Linger in this CAFE

Andrew Samwick gives a very good version of the economists' rant against the CAFE standards. I, too, was abashed to discover that my Subaru Legacy is an "SUV."

From Congress's point of view, CAFE is useful because it keeps people from thinking that Congress is taxing them. What CAFE does is to impose a tax on fuel-inefficient vehicles which is then rebated as a subsidy on fuel-efficient vehicles. This tax, however, is collected and then rebated by the auto manufacturers themselves--they reduce prices on fuel-efficient vehicles below what they would otherwise be in order to meet their CAFE targets, and make it up by raising margins on fuel-inefficient vehicles.

Thus Congress is far from the scene of the tax. The problem is that, as Andrew says, it is a lousy tax to be levying. What we want to tax is gasoline usage, and taxing fuel-inefficient vehicles is a lousy substitute.

Twelve years ago the Clinton administration proposed such a tax--an energy usage ("BTU") tax. Think how much better off we would be on how many dimensions if that tax had been passed back in 1993.

Vox Baby: Don't Linger in this CAFE: ...driving an SUV... a vehicle subject to the lower standards of fuel economy for light trucks under the CAFE regulations. Like many of my liberal friends in rural New England, I drive a Subaru Outback. I had no idea at the time I purchased it that it qualifies as a light truck.... I think the CAFE standards are lunacy as currently conceived, and I'll cite three issues. The first issue, as I've alluded to earlier, is that the problem we care about is total usage of gasoline. Total use is the amount of miles driven divided by fuel economy. CAFE standards, at best, address fuel economy, but they provide no incentive to economize on the number of miles driven. This is why a gas tax is better--it allows people to decide how they want to conserve on fuel usage, fewer miles or fewer gallons per mile.

The second issue is that the CAFE standards operate at the level of a fleet of vehicles produced by one manufacturer.... Why provide an incentive for Toyota to make larger cars just because it happens to make good small cars? If the objective is to regulate the average fuel economy of all cars on the road, then there ought to be a tradable permit system established. We would get a better variety of cars on the market, though not at any one particular dealer. Pure welfare gain.

The third issue is that the CAFE standards operate in a hidden fashion, and as a result there have been plenty of abuses. CAFE standards are negotiated behind the scenes with a few entities (the manufacturers). They lobby for complexity and then exploit loopholes, like the different standards for cars and light trucks or, as I fear, all these new flavors of SUV. Lack of transparency is the enabler of bad policy. Is there anything more transparent than a gas tax at the pump?

Keep it simple. Scrap CAFE, set a higher gas tax, and return the aggregate revenues from that gas tax through lower income taxes in a progressive fashion.

Comments

[Rob]

Yes a gas tax would be better. And I'd like a pony. Both are unlikely to happen. And a big issue that is being ignored is lock in. Right now a increase in CAFE is possible. An increase in gas taxes isn't and in fact the American Petro Insitute is calling for a repeal and given this Congress would you expect them not to get it? Once new CAFE's are set there is little incentive to roll them back politically. There will always be rewards for rolling back taxes.

[liberal]

Samwick is simply wrong.

CAFE standards, historically, are extremely effective at increasing efficiency.

The amount of tax you'd need to begin approaching the efficiency under CAFE would be pretty steep. While it could be done in principle, as commenter Rob points out above, it's very unlikely the necessary gas taxes would ever be passed.

[wcw]

Who says they'd be "pretty steep"?

I guess $5 gasoline seems "steep" but it works
just fine in Europe. People still drive. Heck,
a couple years back I put 1,500k on a rental.
People respond very well to price incentives.

For the record, rather than a BTU or carbon or
petrol tax, my pipe dream is for a cabinet-level
Department of Externality continually to account
for same and charge accordingly.

Ah, crazy dreams of advanced capitalism.

[anne]

"Keep it simple," agreed. Then there will be no increase in the tax on gas, especially no increase when prices have already risen so much. There is theoretical economics and there is political-economics. Legislators who pushed a tax increase on gas just now, with whatever promises for a fanciful swap on other taxes, would not remain legislators for long. We have trapped ourselves by failing to care that gas mileage levels would be frozen at 1986 levels for the following generation.

Still, personal choices have beeen made all along. We could have choosen to favor high mileage cars for all the supposed inconvenience that we never really noticed in the days before Explorers or, even better, Hummers flashed by. We chose.

[anne]

Remember what happened not so very long ago in California when the vehicle registration fee was supposed to be allowed to rise? Not so long ago, but long enough for there now to be another Governor. However, I see no reason why Congress after Congress these 20 years could not have tightened fuel efficiency requirements for every class of gasoline burning machine. There is however a significant tax subsidy for buying the largest of SUVs.

[Ken]

"We could have choosen to favor high mileage cars for all the supposed inconvenience that we never really noticed in the days before Explorers or, even better, Hummers flashed by. We chose."

With a little help from the fine folks at the NTHSA that required us to put explosive devices in the front seat to make it more dangerous for our children to sit there (not the original purpose, of course, but when this inconvenient fact came to life, their response was essentially "tough shit. And no, you can't install a switch without our permission."). If kids can't sit in the front seat, we need more room in the back, which means that we're going to need a van or an SUV.

Agreed that CAFE standards need to go. But why do we need a gas tax? Surely the price of the gas itself is a signal telling us how much effort we should go to to economize on its use. Less traveling is not an unmitigated good - more and cheaper traveling is useful for trade, allows cheap outlying land to be put to good use rather than going to waste, allows grown children to get the hell away from their overbearing parents (and other illiberal influences) more easily, provides mental stimulation, acts as an antidote to provincialism, and allows us access to greater opportunities of every sort.

So the real goal shouldn't be "make everyone use less energy" but "encourage people to find the best and cheapest way to produce energy so people can use more to improve their lives, and in the meantime encourage people to use energy only when it makes more sense than the alternatives". The price mechanism is good for that, and anything that masks the price signals (CAFE standards, higher gas taxes, etc.) should be deep-sixed without delay.

[Cranky Observer]

It would be nice to at least acknowledge that personal vehicle fuel economy is probably the #1 issue cited by critics of the standard Economics model as the perfect example of market failre and planning-horizon problems. You probably do not agee with those critics, for sure, but not mentioning that seems a bit odd.

Cranky

[Samuel Knight]

First, regret. If I remember Clinton caved on the BTU tax because he wanted to get one Oklahoma Senator (Boren?)'s vote, which he never got.

Second, although we normally would prefer to have one mechanism, such as taxes, there is nothing wrong with CAFE and a fuel tax.

Third, what some of the "free-market" arguments miss is the concept of risk. The price mechanism only operates on the present supply and demand. It does not take into account the societal risk of a sudden loss of supply. That's a classis case where another institution, such as government must come in and supply the necessary "insurance". In this case encouraging the buidling of a more energy efficient infrastructure.

[lise]

There has been no problem having space enough in my Camry to carry children and packages safely and conveniently. I find no problem with mileage standards other than a lack of strength and coverage of all categories of vehicle. Taxes on energy consumption will be quite regressive, and I find no reason for them.

[theCoach]

"What we want to tax is gasoline usage, and taxing fuel-inefficient vehicles is a lousy substitute."

I am not sure this is accurate. We want, actually, a tax on both. With a gas tax we want to capture the externalities. With a tax on fuel inefficiency we want to target research and development into a more beneficial area (and, yes, I mean more beneficial as decided by some pointy headed elites rather than through the wisdom of the crowds).

[Jonathan W. King]

liberal writes:
> The amount of tax you'd need to begin approaching the efficiency under CAFE
> would be pretty steep. While it could be done in principle, as commenter Rob
> points out above, it's very unlikely the necessary gas taxes would ever be passed.

It's very unclear how steep it would have to be. GM and Ford *right now* are in a lurch because people are not buying their larger vehicles as much due to rise in the price of maybe $1.50 in the price of gas. I think the key point is that people do change their behavior in response to economic incentives. But if we want to change people's behavior for long enough to matter, the incentive (or disincentive) must be seen as being around for the long-term. If everybody "knew" that gas would never again go below $2.50 per gallon, they would flee to more efficient vehicles far more quickly than they are now. I think is a real problem for trying to generate conservation through price increases alone, or taxes as they are conventionally imposed. What *really* needs to happen is a situation where people can only expect gas to become more expensive, and that their only choice is to rethink their vehicle and driving choices. CAFE is obviously an incredibly unwieldy way to achieve this end. A better way would be to note that our dependence on oil and gas is now a national security issue, that conservation must be pursued, and that the government will set a (high) floor on the price of fuels that will go up as fast as some index. We really have to make it a point of questioning somebody's patriotism if they choose to squander scarce resources.

If Bush wants to be a war president, that's fine: he just needs to choose a more suitable battle. And this would be one.

Yes, yes, I know this will never happen. Here in Missouri, we're apparently about to add to the mandate of the upcoming special session of the legislature, so that they might enact a bill that would REDUCE or ELIMINATE the gas tax here during "ermergency" periods when prices are too high. It's pretty depressing.

[wkwillis]

A gas tax is a tax on driving. A gas tax is a tax on living a long way from work. A gas tax is a tax on office buildings downtown.
I don't think a gas tax is a good idea for urban voters.

[João Carlos]

If the peak oil doomsayers are right, the gas tax was a good idea...6-7 years ago...

[save_the_rustbelt]

Sure, let's pound the middle class with more taxes so the elites can feel all warm and fuzzy about public policy.

Most of us are at fault because the problem has been obvious since 1973, and we went about our lives rather than taking a long-term policy view.

Maybe we can speed up the destruction of UAW jobs, we don't want manufacturing jobs in this country anyway.

CAFE is dumb, taxes are oppressive, any better ideas out there?

[RT]

I'm with Rob on the "and I'd like a pony" sentiment. Like Anne said, legislators who vote for gas taxes become former legislators. Increases in CAFE standards, OTOH, are politically feasible, if we ever have a Dem (i.e. non-dumb) Congress again.

Ken - I was driving a rental car last week in Montana that had a very prominent switch on its dashboard for disabling the passenger side airbag. Now you have no excuse to eschew that Nissan Altima in favor of a SUV.

[MobiusKlein]

wkwillis has it wrong -
A gas tax is not a tax on office buildings - it's a tax on driving your 20 MPG SUV there.

[SqueakyRat]

"CAFE is dumb, taxes are oppressive, any better ideas out there?"

You mean, like, clap our hands until there's lots and lots of cheap oil again?

[A. Zarkov]

“Twelve years ago the Clinton administration proposed such a tax--an energy usage ("BTU") tax.”

A general tax on energy seems like a good idea. However energy comes in different forms and it doesn’t seem rational to levy the same tax on a kilowatt-hour of electricity as 3,413 BTU (the energy equivalent) from (say) natural gas or coal. After all electricity is a high quality form of energy compared to the heat energy from natural gas combustion. When we generate electrical energy we have to worry about things like load matching, and meeting peak demand. It’s also expensive to store it. So wasting a kilowatt-hour seems worse than wasting 3.4 cubic feet of natural gas. I’m not sure what form a general tax should take; perhaps we should consider entropy as some kind of weighting factor. Without very careful thought, we could introduce economic distortions we won’t like with a general energy tax.

[free_trader]

Just an example to highlight how screwed up the CAFE standards are. My friend is an environmentatist who hardly ever drives. She buys the most efficient car possible when she gets a car, and then it sits in the driveway. That allows the manufacturer that produced her car to sell a guzzling behemoth to some other idiot who will drive it all the time. CAFE turns my friend's virtue into a vice. Put on a sizable gas tax and the car companies will invest in fuel economy technologies. CAFE would be redundant if the gas tax were high enough. Surely we can find some other activity that we would prefer to tax less?

[piotr]

I think that gas tax + carbon tax would be fine.

People (at least conservatives, but they fall under the rubric of people) seriously consider national sales tax. Given that VAT is quite succesful in Europe, one can propose this formula: "regressive tax" combined with "progressive benefits". Say that you fund health care with a tax that is regressive in the sense that lower income people pay larger proportion of the income, but they pay less while the health benefits are worth the same, so they get a better "return" on the tax money.

Back to taxes: suppose that we collect 5c on every pound of fossil carbon being burnt, extra 5c if this carbon is a hydrocarbon, and extra 5c if that hydrocarbon is liquid.

Quick calc: we collect 100 G$ from coal, 100 G$ from gas and 300 G$ from oil, for the total of 0.5 T$. Is it 3% of GNP?

This would add ca 160c per gallon of gasoline (which consumes ca. 11 lb of crude oil) With the cost of gasoline being predicably 4$ or more, fuel-efficient vehicles, living closer to work, carpooling, public transit etc. would be much more attractive.

My plan would increase the cost of coal-produced electricity by 5c/kWh (I would had to check, this from memory), gas-produced electricity by 10c/kWh. Wind and nuclear power would become highly competitive, and solar -- close to, and reaching parity with gas in the next technological generation. Private ingenuity could invent a myriad of ways to lessen the bite of 0.5 T$ tax -- so this revenue would hopefully decline sharply in time. Yet, with tax being so simple, tax avoidance would form a constructive activity.

[Ottnott]

Samwick doesn't convince me that CAFE standards are a poor way of encouraging energy-efficient automobiles, but he does reinforce my already strong belief that our current CAFE standards are a poor way of achieving the goal.

Engine efficiency has actually continued to improve even as overall average MPG has fallen. Because CAFE standards have not been rising as technology improved, automobile manufacturers have been giving us increasingly powerful engines--we've been getting more HP instead of more MPG.

Personally, I believe that something like CAFE is needed, because it more or less forces automakers to offer some high-MPG vehicles to the market. Too often, I've read execs in one industry or another saying that "the government shouldn't force us to offer X, because our customers don't want X", when the fact is that there is no X available for customers to vote for with their dollars.

Mandatory efficiency standards have played a huge role in improving the overall energy efficiency of our economy. If codes didn't require certain levels of insulation in new homes, for example, it is dead certain that many builders would skimp on insulation to pocket an extra few thousand or to make the initial purchase price a little more attractive. Insulation is an extremely cost-effective efficiency improvement when installed during original construction.

I am convinced that efficiency standards frequently improve overall economic efficiency.

[A. Zarkov]

“... it is dead certain that many builders would skimp on insulation to pocket an extra few thousand or to make the initial purchase price a little more attractive.”

I’ll second that. Sometimes I think the builders would make houses out of cardboard if the building codes allowed that—and people would buy them. I am constantly amazed at the absolute junk people buy. It’s particularly bad in the Washington DC suburbs in Virginia.

[piotr]

With my carbon tax, improving home insulation, installing geo-heat pump etc. would be very attractive, which may provide a lot of decent blue-collar jobs.

Some very modest government programs could facilitate it, e.g. federal standards and certification for home-energy consultants.

Between the cost of heating and commuting, multifamily housing (or townhouses) would be relatively more attractive.

About CAFE: this is a sad joke. Fuel efficiency of 90% of sedans could by 20% better simply be having less powerful engines that probably would not be more expensive. Next, there is this intricate classification of "light trucks" by weight. Next, any complex program is sadly very easy to manipulate.

Carbon tax would have to have some complexities too, because one would probably have to offer rebates for exporters and duties for importers of products that have large carbon input, like steel. But steel may be produced from scrap (less energy) and from ore etc. It could help to have a compact of many countries with coordinated carbon/carbohydrates tax rate, say NAFTA+CAFTA. You know, USA could be t least a regional leader on energy saving. Sounds quaint, doesn't it?

[joeg]

Why not an engine displacement tax? and no averaging. Gas taxes hit the poor hardest, especially in urban areas with little affordable in-city housing and poor public transit, where people are forced to drive to work.

[setmajer]

Yay Joeg! 'Bout time that someone in this thread noticed that lots of Americans don't live in cities or near suburbs.

I grew up in such a place. I also lived ther for a time after college. The typical pattern for working-class individuals was to live 5 or more miles away from work. This was often true even when you worked effectively in the same 'town' as you lived as factories were often built just outside the city limits (saves on taxes).

It is also common -- indeed the rule -- for new entrants to the labor pool to be temp employees for several years before finally getting full-time work at one of the plants. As a temp, you get laid off with some regularity, and its not uncommon to switch jobs every 6-18 months. Moving close to your job is not feasible, as you're rarely at the same job at the start and end of your lease and finding another job quite often puts you in a neighboring town 10-20 miles away.

As for public transport, there is none. Not 'no good transport', but none at all: no taxis, no busses, nothing. Carpooling is done, but you need to know people at the factory living near you. When you're a temp, that's not always the case, and it is not uncommon to have nobody else living nearer than 10 miles from your home -- almost the same distance as they probably drive to work.

Things may have changed, but back in the mid-90s the young families and singles tended to drive small, 4-cylender automobiles -- Escorts, Cavaliers, old Horizons, Neons, Chevettes and so forth. They did NOT drive '20 MPG SUVs'. I personally drove a Honda Civic, but even so slapping another $0.50/gal would've seriously hurt my ability to meet expenses: as it was, when the car konked out I typically had to take on high-interest credit card debt for a rental or walk 8-12 miles to work (which I did for a couple weeks) as nobody else lived near enough to me to carpool.

I'm not unsympathetic to a gas tax, but its worth remembering that such things hit the 'NASCAR Dads' especially hard. They will go over like lead baloons in the red states, particularly with the working class.

[anne]

The more I think of higher energy taxes, the more I dislike the idea. Such taxes weigh more heavily on lower income households, and I am not the least impressed by the notion that we could make income taxes more progressive to return the added energy taxes. Both ideas are politically impossible, and voters would be inclined to be especially and rightfully annoyed at any legislator who pushed for higher energy taxes when energy prices are already worrisome.

However, we have repeatedly managed to use administrative pushes on efficiency to gain in technical expertise and improve efficiency and productivity. There were excellent efficiency gains in energy useage from 1978 to 1988. That the gains were forgotten at the persistence of industrial lobbyists, shows no problem with the concept only with a continued legislative and administrative push. Markets do not magically set socially desirable frameworks. We can set conservation and efficiency frameworks for energy markets that will dramatically benefit us, if there is a legislative will.

[Dallas]

"Keep it simple. Scrap CAFE, set a higher gas tax, and return the aggregate revenues from that gas tax through lower income taxes in a progressive fashion."

Pretty damn hard to argue against that.

[anne]

Raising income taxes moderately early in the 1990s, was a wonderful economic help and set us in enviable fiscal order by the end of the decade. But, Democratic supported income tax increases would lead to a Republican controlled Congress. Even if an increase in energy taxes were desirable, and I much doubt the case, politically such an increase would be as dramatic in political effect as the foolish attempt in California to allow vehicle registration taxes to increase.

[nate]

ideas on oil

1. consumer ed - we need more of this at the college level. this should be made avaible to the general public, including those who do not attend college. the internet and computers, and public libraries, could be used to improve productivity on this. people could be reached through community organizations.

car dealers will sell someone a bigger car than they need. salesman may make more selling more expensive cars. arguably people buy SUVs that are beyond their means, and SUVs they might not buy given more education (interest expense, financial flexibility reduced by debt, opportunity cost of high car and gas payments, awareness of economic history - 1970s, etc)

2. Govt assistance - I am for safety nets from the govt. However, it seems kind of unfair and not wise to me when we redidistribute things from 1) workers and high income people who choose to drive honda civics and accords, to 2) people who are subsidized by the government and drive Yukons and Excursions. Some of our govt programs arguably pay for people's oil habit, which could get the U.S. in a bind. It does not seem like the govt should subsidize or encourage potentially deterimental behavior. People who are subsidized or supported by the govt should be incentivized to choose fuel-efficnet transportation. Possible ideas, although maybe not great ideas or ideas I agree with, might be
... a slightly smaller social security check for beneficiaries who choose to drive gas guzzlers.
...People on other govt programs should receive less aid and assistance if they own or lease a gas guzzler vs. if they own a car with decent fuel efficiency.

[liberal]

wcw wrote, "I guess $5 gasoline seems 'steep' but it works just fine in Europe."

$5/gal gas would be fine with me, but hell will freeze over first here in the US before gas taxes get that high.

Which is why CAFE is preferable.

[meno]

"With a little help from the fine folks at the NTHSA that required us to put explosive devices in the front seat to make it more dangerous for our children to sit there"

Bastards! New Zealand has imported wholesale many of your US vehicle safety regulations. So now I'm looking at buying a station wagon because I can't safely sit small kids in the front seat where the air-bag is.

This is absurd!

[piotr]

setmajer: gas tax hits "nascar dads" particularly hard...

anne: politically not feasible

Number one, Republicans discuss eliminating income tax with national sales tax. Taxes on cigarettes are increased very often. Taxing energy is not that different.

Number two: If a lone worker commutes 20 miles to work in a semi-rural area, he/she can drive a car equivalent to Insight, 60 mpg, or a pickup truck with 15 mpg. In the former, the expenses on gas would be smaller even after doubling the price.

The problem with CAFE is that it just does not work.

[save_the_rustbelt]

I can't wait to see my friends put a tool box and cutting torch (with tanks) into the trunk of an Insight. Not everyone in the world is an economics professor.

Aparently, CAFE and taxes are about the only ideas anyone can come up with.

So why don't we do CAFE hard-and-fast and mandate the mileage, horsepower and etc. per vehicle? If we are going to do this, let's quit wimping around and just do it.

[cdmn]

It's not just the cost of the fuel that should matter, it's the total life-cycle cost of a car. Doesn't anyone understand that depreciation of value, and the cost of upkeep are the same as fuel consumption? If you buy a new "economy" car, you may have to drive it for 15 years to pay back the extra cost out of gas savings.
So how about a different idea? Why not limit each person to one new car per lifetime. Make it last, or wear it out. Make it do, or do without. If you wreck it, you'll have to persuade someone else to sell his used car to you. Or if your needs change, you can still trade used for used. Wouldn't that change the dynamics of the whole thing? P.S. The Cubans are trying it.

[hessenpepper]

Problems with CAFE

CAFE does not influence the adoption of new technology. CAFE affects quantities, not efficiencies. Big cars are more expensive and small cars are cheaper. The cost of new technology is still passed on to the consumer. If consumers are unwilling to pay for new technology without CAFE they are not going to pay for it with CAFE.

[hessenpepper]

Problems with gas tax

CAFE has created an equilibrium point around the standard. As demand for large cars decreases the price falls. (Think employee discount.) Although the demand has changed, the quantity sold does not. Before the fleet average starts to change the affects of CAFE will have to be reversed. Big cars get cheaper and small cars get more expensive.

Even if the price of gas shot up to $5, most people would not be able to go out and buy a new car tomorrow. Even fewer of us would be able to move closer to work. The US is a big place and movement of goods requires transportation. An increase in transportation costs is passed on to the consumer in the price of goods. The US runs on transportation and even a small gas tax has a significant affect on our economy.

[insert philosophical musings here> Travel is good, using oil is bad. Today travel and oil use are closely linked. A gas tax reduces oil consumption at the expense of travel. The solution is to decouple travel and oil consumption. It wouldn’t matter how much a solar car was driven.]

[hessenpepper]

The third alternative

There is a way to combine the advantages of both CAFE and a gas tax. A gas tax does increase the adoption of technology. Consumers will pay for new technology if it saves them money on gas. The higher the price of gas, the more money they save and the faster technology will be adopted.

Policy applied only for new cars would not affect owners of older cars. After all, people that can only afford used cars can only buy cars that someone else purchased as a new car. CAFE is an attempt to influence new car sales without negatively affecting everyone else that is “stuck” with an inefficient car.

The answer:
Suppose a gas tax was only applied to new cars at the time it’s sold. We need to know how much gas a car will consume. Let’s say we apply a 50 cent gas tax to the first 100,000 miles a car will travel. The tax will be 100,000miles / fuel efficiency * $.50

This effectively decreases the cost of new technology. Suppose the cost of new technology increases the cost to build a car by $1000, but decreases the up-front gas tax by $1000. The price to the consumer is the same and the result is that the technology is quickly adopted.

The up-front gas tax has one big drawback. Although it would have a very small affect on the economy as a whole, it would have a substantial affect on the auto industry. With a minor adjustment the up-front gas tax becomes revenue neutral. All money collected is given back in equal amounts. The fee paid is relative to the fuel efficiency of the car, but the rebate is relative to average efficiency of all cars sold. The feebate has the same affect on technology adoption, but does not have the negative affect on the car industry.

Feebates have been suggested before, but have been dismissed. People believe that the purpose of a feebate is to make big cars more expensive and small cars cheaper. Ironically, that’s what CAFE does. In fact, because CAFE has distorted prices the immediate affect of a feebate would be to reverse the affects of CAFE. For many car models the fee and the rebate would be absorbed by the producer (partially at least.) The price to the consumer stays the same, but producers would make more money on small cars and less money on big cars. The BIG adjustments to prices would be the new technology cars. New technology cars like hybrids suddenly become cheaper relative to the equivalent old-technology car. (Currently, new technology cars are priced like big cars, but have efficiencies of small cars, so CAFE does not affect them the same as other cars.)