European and Japanese fuel economy initiatives: what they are, their prospects for success, their usefulness as a guide for US action

The new Japanese weight class standards for fuel economy and European Volun tary Commitment for reducing carbon emissions, both aimed at light-duty veh icles, are likely to further separate the fuel efficiency of the Japanese a nd European fleets from the US fleet.... and they may put substantial press ure on both US manufacturers and the federal government to take action to n arrow the growing fuel economy gap. This paper describes these two new init iatives, discusses some concerns with their outcome, and provides some insi ght into their potential applicability to the United States market. In part icular, the paper compares the regulatory conditions governing fuel economy (test regimes, emissions standards) and the differences in the cost-effect iveness of new fuel economy technology (given differences in fuel prices, v ehicle taxation, and other factors affecting technology cost/fuel savings t radeoffs) for the three markets. European and Japanese market conditions ar e more conducive to improving fuel economy because of less stringent emissi ons standards (that make direct injection engines more feasible and will li kely allow better performance from them) and much higher fuel prices than i n the US. However, factors such as high vehicle taxes and, in some European countries, a high percentage of company cars may narrow the gap between th e US market and the European market. And very high rates of driving in the US also enhance the cost-effectiveness of efficiency technologies (C) 2001 Published by Elsevier Science Ltd.