Date of Award


Document Type

Honors Thesis (Colby Access Only)


Colby College. Economics Dept.


Thomas H. Tietenberg

Second Advisor

Michael Donihue


In addition to the serious health effects caused by oil production, distribution and consumption, there are environmental as well as political effects. Equally important is the issue of our nations security. America imports 53% of the oil it consumes daily, leaving us extremely reliant on foreign sources (especially the strong OPEC cartel) for our daily intake. Currently, 68% of the U.S. oil consumption is devoted to transportation. As a result, the need to improve the fuel economy of today's car fleet is dire. Although the Corporate Average Fuel Economy (CAFE) standards have significantly increased fuel efficiency since their inception in 1975, due to the increase in miles traveled per vehicle and the change in the product mix towards light trucks (including the popular sport utility vehicle) these efficiency levels are at their lowest point in 20 years. The first section of this paper examines the full effects of oil consumption as well as the pros and cons of the CAFE standards and evaluates the technological possibilities that could be utilized to dramatically increase fuel economy today and in the future. In the second section, I develop models to explain the past and present movements in sales of both passenger cars and light trucks. In the final section, I discuss four possible policy scenarios and conduct a quantitative analysis of the effects of these reforms on total emissions and fuel economy in three different states of the world between now and 2020.


Full-text download restricted to Colby College campus only.


environment, SUV, emissions, Pollution, CAFE Standards, Oil Dependency