Understanding Proposed CAFE Reforms for Light-Duty Trucks

Understanding Proposed CAFE Reforms for Light-Duty Trucks

An RFF Workshop
October 20, 2005

The National Highway Traffic Safety Administration (NHTSA) recently released a package of proposed reforms to fuel economy standards for light-duty trucks. These reforms would gradually shift from the traditional, single-standard approach in favor of standards differentiated by manufacturer, based on the size distribution of their fleet. Further, the level of the standards would be based on an explicit cost-benefit analysis designed to maximize gains to society. Despite the considerable attention given to the suggested level of the standards, little attention has focused on these proposed architectural reforms.

RFF presents a half-day program designed to answer questions, encourage debate, and spur informed comments on the proposed reform package. In particular, speakers discuss how the new system will work, how it improves (or does not improve) on existing policy, and how key questions concerning implementation might be resolved. Official comments on the reform package are due November 22, 2005.

Audio and presentation slides from this workshop follow below.

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Phil Sharp - Introduction
President, Resources for the Future and
Member, 2001 NAS CAFE Panel

Phil Sharp became President of Resources for the Future in September 2005. His career in public service over the last 35 years includes 10 terms as a member of the U.S. House of Representatives from Indiana, during which time he took key leadership roles in the development of landmark energy legislation. Following his decision not to seek an eleventh consecutive term in the House, Sharp joined Harvard’s Kennedy School, where he was a Lecturer in Public Policy from 1995 to 2001. He served as Director of Harvard’s Institute of Politics from 1995 to 1998 and again from 2004 until August 2005, and was also a Senior Research Fellow in the Environmental and Natural Resources Program. Sharp has also served as Congressional chair of the National Commission on Energy Policy.

Stephen R. Kratzke - Overview of the Reform Package
Associate Administrator, NHTSA

Presentation Slides
(Printer-friendly PDF format)

Stephen Kratzke is Associate Administrator for Rulemaking at the National Highway Traffic Safety Administration. He began his service at NHTSA in 1976 as a Rulemaking Attorney and has since held various positions, including Director of the Office of Crash Avoidance Standards, Program Analyst in the Office of Motor Vehicle Safety Standards, and Deputy Assistant Chief Counsel for Rulemaking. He earned a B.A. from Duke University and a J.D. from Georgetown University.

Adrian K. Lund - Panelist
COO, Insurance Institute for Highway Safety

Presentation Slides
(Printer-friendly PDF format)

Adrian Lund is chief operating officer of the Insurance Institute for Highway Safety (IIHS), where he has overall responsibility for the research programs of both IIHS and its affiliate, the Highway Loss Data Institute. Since joining IIHS in 1981, Lund has directed research on driver, vehicle, and roadway factors involved in the safety of motor vehicle travel. He also served on the National Academy of Sciences Committee on Effectiveness and Impact of the Corporate Average Fuel Economy Standards and the National Research Council Committee for the Review of the Intelligent Vehicle Initiative.

William Pizer - Panelist
Fellow, Resources for the Future

Presentation Slides
(Printer-friendly PDF format)

Billy Pizer’s research seeks to quantify how various features of environmental policy and economic context, including uncertainty, individual and regional variation, technological change, irreversibility, spillovers, voluntary participation, and flexibility, influence a policy's efficacy. He applies much of this work to the question of how to design and implement policies to reduce the threat of climate change caused by manmade emissions of greenhouse gases. Since August 2002, Pizer has worked part-time as a Senior Economist at the National Commission on Energy Policy. During 2001-2002, he served as a Senior Economist at the President’s Council of Economic Advisers where he worked on environment and climate change issues. He was a Visiting Scholar at Stanford University’s Center for Environmental Science and Policy during 2000-2001, and taught at Johns Hopkins University during 1997-1999.



Ian Parry - Panelist Senior Fellow, Resources for the Future Presentation Slides (Printer-friendly PDF format)

Ian Parry is a senior fellow at Resources for the Future. He received a Ph.D. in economics from the University of Chicago in 1993 and an M.A. in economics from Warwick University in 1987. Parry’s research focuses primarily on environmental, transportation, tax, and public health policies. His recent work has analyzed gasoline taxes, fuel economy standards, transit subsidies, alcohol taxes, policies to reduce traffic congestion and accidents, environmental tax shifts, the role of technology policy in environmental protection, the incidence of pollution control policies, and the interactions between regulatory policies and the broader tax system.

Kurt Van Dender - Panelist
Assistant Professor, UC Irvine

Presentation Slides
(Printer-friendly PDF format)

Kurt Van Dender is Assistant Professor of Economics at the University of California, Irvine, where he specializes in the applied microeconomic analysis of public policy in passenger transportation. Within the EU-financed TRENEN project, Van Dender was closely involved with the development of a simulation model of urban passenger transport systems and its application to five European cities. These ideas were further developed in recent work for the California Air Resources Board, for which Van Dender co-developed an economic model of the aggregate demand for vehicle use, fuel economy, and vehicle ownership. He is currently developing empirical applications on markets for air travel between U.S. metropolitan regions containing more than one airport. In 2001, he obtained his Ph.D. from Catholic University of Leuven, Belgium.

Discussion and Q&A
Raymond J. Kopp - Moderator

Ray Kopp’s interest in environmental policy began in the late 1970s, when he developed techniques to measure the effect of pollution control regulations on the economic efficiency of steam electric power generation. He then led the first examination of the cost of major U.S. environmental regulations in a full, general equilibrium, dynamic context-using an approach that is now widely accepted as state-of-the-art in cost-benefit analysis. Kopp is an expert in techniques of assigning value to environmental and natural resources that do not have market prices, which he uses in cost-benefit analysis and to assess damage to natural resources. He is a member of the U.S. Department of State’s Advisory Committee on International Economic Policy and the coauthor of Valuing Natural Assets: The Economics of Natural Resource Damage Assessment.