these programs are more ambitious than the program underway in the
United States. Fuel economy programs and GHG emission targets, either
mandatory or voluntary, have proven to be among the most effective tools
in controlling oil demand and GHG emissions from the transportation
sector. While fuel economy standards for passenger vehicles have been
largely stagnant in the United States over the past two decades, the rest of
world—especially EU nations, Japan, and recently China and the U.S. state
of California—has moved forward, establishing or tightening GHG or fuel
economy standards. This chapter reviews and compares the programs under
way around the world.
In a broader sense, fuel economy programs include both numeric
standards and fiscal incentives to improve energy efficiency of individual
vehicles per unit of travel distance. In today’s technology-driven world, new
technologies offer great promise to drastically improve vehicle fuel
economy. However, realizing such technological promise has proven to be
a big challenge. Historical trends in United States have clearly demonstrated
that technological advancement tended to be used to boost vehicle size and
performance over fuel economy, given a lack of regulatory pressure, as
trends demonstrated from the mid-1980s to today. However, technology
development has also been capable of responding to regulatory requirements
to improve vehicle fuel economy, when such requirements were in place
from mid-1970s and mid-1980s (An and DeCicco, 2005).
Fiscal incentive programs have improved fuel economy or reduced fuel
use, especially in combination with standards. Incentives can be directed at
improving the efficiency of the vehicle fleet, through variable registration
fees or taxes, or at limiting vehicle use, through fuel taxes and road use fees.
Many European countries have established vehicle tax systems either based
on engine size, fuel efficiency, or carbon dioxide (CO
) emission rates, in
support of mandatory standards. Higher fuel taxes in the EU reinforce efforts
on the part of automakers to meet voluntary GHG emission targets. Taxes
are a major factor in the predominance of smaller and more fuel-efficient
vehicle models and the limited growth in vehicle miles traveled (VMT) in
Europe. Table 9-1 summarizes major approaches for the purpose of reduc-
ing automobile fuel consumption and GHG emissions.
Comparison of Vehicle Standards around the World
Research at Energy and Transportation Technologies, LLC, indicates that at
least nine countries and regions around the world have established or pro-
posed their own motor vehicle fuel economy or GHG emission standards,
as shown in Table 9-2. Motor vehicle fuel economy standards have been
established for most of the developed world, including the United States,
EU nations, Japan, Canada, and Australia. The EU has also negotiated
voluntary vehicle CO
emission rate targets as a means to control GHG
144 Driving Climate Change
International Comparison of Policies 145
TABLE 9-1. Measures to Promote Fuel-Efficient Vehicles Around the World
Approach Measures/Forms Country/Region
Standards Fuel economy Numeric standard U.S., Japan, Canada,
averaged over fleets or Australia, China,
based on vehicle Taiwan, South
subclasses Korea
GHG emissions Grams/km or grams/mile EU, California
Fiscal High fuel taxes Fuel taxes at least 50% EU, Japan
Incentives greater than crude price
Differential Tax or registration fee EU, Japan
vehicle fees based on engine size,
and taxes efficiency & CO
Economic Gas guzzler tax U.S.
Support for R&D programs Funding for advanced U.S., Japan, EU
new technology research
technologies Technology Sales requirement for California
mandates and ZEVs
Traffic control Incentives Allowing hybrids to use California, Virginia,
measures HOV lanes and others states
in the U.S.
Disincentives Banning SUVs on city Paris
Source: Based on Table 1 in An & Sauer, 2004.
TABLE 9-2. Fuel Economy and GHG Standards for Vehicles Around the World
Country/Region Type Measure Structure Test Method Implementation
United States Fuel mpg Cars and light U.S. CAFE Mandatory
European CO
g/km Overall light- EU NEDC Voluntary
Union duty fleet
Japan Fuel km/L Weight-based Japan 10–15 Mandatory
China Fuel L/100-km Weight-based EU NEDC Mandatory
California GHG g/mile Car/LDT1 U.S. CAFE Mandatory
and LDT2
Canada Fuel L/100-km Cars and light U.S. CAFE Voluntary
Australia Fuel L/100-km Overall light- EU NEDC Voluntary
duty fleet
Taiwan, South Fuel km/L Engine size U.S. CAFE Mandatory
Source: Energy and Transportation Technologies, LLC.

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