Background on Fuel Efficiency and Emissions Standards
The story of fuel efficiency standards begins in 1973 when members of the Organization of Petroleum Exporting Countries (OPEC) announced that they would no longer ship oil to nations that had supported Israel in its conflict with Syria and Egypt during the Yom Kippur War. Targeted communities included the U.S., Western Europe and Japan. The result was a 98 per cent decrease in U.S. oil imports and an increase in the national average gasoline price from 38.5 cents a gallon in May 1973 to 55.1 cents a gallon in June 1974. The price shock nudged already fragile economies in the industrialized world into recession and rationing was enforced.
The U.S. government enacted new measures to increase fuel efficiency, including enforcing a national speed limit of 55 mph. Before the oil shock, large and heavy vehicles were common; afterwards, smaller, more fuel efficient imports gained popularity. In 1975, the U.S. established Corporate Average Fuel Economy (CAFE) standards which required a doubling of fuel economy standards by 1985 (all manufacturers met or exceeded this goal by the 1990 model year).
In Canada, a voluntary program was established to encourage energy conservation. The labeling of fuel consumption ratings for new cars and light trucks emerged at the same time. In 1976, the Federal government approved the establishment of Company Average Fuel Consumption (CAFC) targets, which essentially reflect the same level of fuel efficiency as CAFE in the U.S. But, whereas CAFE targets were legislated in the U.S., CAFC targets were voluntary. In 1982, the Motor Vehicle Fuel Consumption Standards Act was passed by Canadian Parliament which would make CAFC targets enforceable by law; however, the MVFCSA was not proclaimed until November 2007. More recently, the Government of Canada has moved away from regulating new vehicle fuel consumption level, and instead has announced that Carbon Dioxide Emissions from new vehicles will be regulated under the Canadian Environmental Protection Act.
North American automakers doubled fuel efficiency levels between 1974 and 1985, in compliance with CAFE, reducing annual U.S. GHG emissions by 100 megatonnes. However, U.S. fuel economy levels entered a period of long decline, and have only begun to climb again in recent years. In Canada, the decline followed a similar trend. For an update on what governments are doing right now, look at What is Being Done by Governments.
Everything you ever wanted to know about fuel efficiency appears in our Primer on Automobile Fuel Efficiency and Emissions. Take a look for yourself! 