WASHINGTON, Jan. 5 (UPI) -- The Congressional Budget Office said Monday that an increase in fuel economy standards for automobiles would raise vehicle prices $228 and reduce gas consumption by 10 percent.
In its newly released report on federal Corporate Average Fuel Economy, or CAFE, standards for cars and light trucks, the CBO -- the investigation arm of Congress -- estimated the cost of compliance for industry at $1.2 billion.
However, that cost could be reduced to $800 million a year through the implementation of a fuel efficiency credit trading system.
Under such a system, which is akin to the one in place for controlling some toxic air emissions from manufacturing plants, automakers that exceed the fuel efficiency standard requirements for their entire fleet of vehicles could sell credits based upon their excesses to companies that fail to meet federal requirements, thereby lessening their burden.
The agency also found in its review that the least expensive alternative would be a 42-cent-per-gallon increase in federal gasoline taxes, which would raise $2.9 billion in tax revenues per year, while reducing consumption.
