This report is authored by U-M Department of Economics PhD student Alecia Cassidy. The energy efficiency gap is the failure of consumers or producers to make energy efficiency investments that would seemingly save money or increase profits. The phenomenon is important to understand, because if it exists and reflects irrational decisions on the part of consumers or firms, then policy intervention might be warranted. This report examines evidence for the energy efficiency gap in the automobile industry, and ultimately finds that the evidence is inconclusive. Three general approaches were employed: survey research, reduced-form analysis, and discrete choice modeling. Survey research finds evidence of an energy efficiency gap. Reduced-form analyses find no energy efficiency gap. The results of discrete choice models differ, with some finding evidence of an energy efficiency gap and others finding no evidence.
The light-duty vehicle fleet is expected to undergo substantial technological changes over the next several decades. New powertrain designs, alternative fuels, advanced materials and significant changes to the vehicle body are being driven by increasingly stringent fuel economy and greenhouse gas emission standards. By the end of the next decade, cars and light-duty trucks will be more fuel efficient, weigh less, emit less air pollutants, have more safety features, and will be more expensive to purchase relative to current vehicles. Though the gasoline-powered spark ignition engine will continue to be the dominant powertrain configuration even through 2030, such vehicles will be equipped with advanced technologies, materials, electronics and controls, and aerodynamics. And by 2030, the deployment of alternative methods to propel and fuel vehicles and alternative modes of transportation, including autonomous vehicles, will be well underway. What are these new technologies - how will they work, and will some technologies be more effective than others?
"Carefully examining the locations and magnitudes of fuel-related emissions indicates that the proper policy focus is on the sectors that supply fuel rather than the choice of fuels in the auto sector. Therefore, beyond fundamental R&D, policies to commercialize AFVs are not necessarily required for climate protection at present."
This National Research Council (NRC) report assesses the potential to achieve twin goals of reducing petroleum use and cutting greenhouse gas (GHG) emissions from U.S. cars and light trucks to 80 percent below the 2005 level by 2050.
ABSTRACT. Improving the fuel efficiency of automobiles (cars and light trucks) is an important means of addressing transportation oil demand and greenhouse gas (GHG) emissions. This report examines the efficiency attainable through evolutionary changes in U.S. automobiles that have fueling characteristics as well as performance, size and other attributes similar to those of today. The analysis combines results from previous engineering studies of powertrain efficiency and load reduction with new examinations of rates of technology change and cost reduction.