Corporate Average Fuel Economy (CAFE) Standards

In 1975, in response to an energy crisis in the United States, Congress enacted the Energy Policy and Conservation Act, which included the Corporate Average Fuel Economy (CAFE) Standards. Initially, CAFE standards were part of an effort to reduce U.S. dependence on foreign oil. Today, these standards are part of the debate surrounding global climate change, as vehicles are one of the major emitters of greenhouse gases.

CAFE standards require automobile manufacturers to meet certain miles per gallon (mpg) standards for their fleet of vehicles. In 1974, the average U.S. passenger car had an mpg of less than 13, which was less than the average mpg of just a few years earlier. The CAFE standards required all new automobiles to have an average mpg of 27.5 ...