Earlier this month, the Environmental Protection Agency and the National Highway Traffic Safety Administration jointly issued their final rule setting standards for corporate average fuel economy (CAFE) and emissions of greenhouse gases (GHG). These standards apply to light truck, other light-duty vehicles, and passenger vehicles for the model years of 2012-2016. These standards increase the average fuel economy for vehicles by approximately five percent over each year covered by the rule. For example, for passenger vehicles the CAFE standards will require 33.3 miles per gallon for 2012 and up to 37.8 by miles per gallon in 2016. The combined average figures for passenger vehicles and light trucks increase from 29.7 miles per gallon to 34.1 miles per gallon.

These standards will increase vehicle prices, but also decrease fuel usage. The agencies estimate that the new CAFE standards will lead to a decrease in usage of gasoline and diesel fuel by 61 billion gallons in gasoline and diesel fuel by affected vehicles in comparison to the existing standards. This decrease in fuel sales will likely decrease the amount of money directed into the Highway Trust Fund, which receives funds from gasoline (at 18.3 cents per gallon) and diesel fuel (at 24.3 cents per gallon) taxes. Such loss to the fund is likely to be in excess of $11 billion. This loss raises concerns over how best to maintain the Highway Trust Fund and whether other funding approaches would more accurately reflect the usage of highways and the needs of the fund.