Fuel economy

Week 4 – Discussion 2

Fuel Economy

Air pollution is one critical issue that the United States economy has been struggling to deal with. A vehicle creates a lot of pollution that has negative externality effects in our economy. The Corporate Average Fuel Economy (CAFÉ) was designed to reduce American dependence on foreign oil by producing more fuel-efficient vehicles to help curb emissions. Should the government force car manufacturers to increase fuel efficiency standards, or should the government increase fuel taxes? When evaluating this question, discuss the different costs and benefits that are associated with the options listed and which one you think would be the most efficient way to reduce emissions.