> we find that CAFE has been providing safety cobenefits because it encourages down-weighting. Using the Department of Transportation’s value
of a statistical life, at $9.4 million, the welfare benefits of reduced fatalities, found in our
simulations to range between 393 and 439 lives nationally, are more than $3.5 billion annually. ... our findings suggest that CAFE would pass a cost-benefit test based on benefits from reduced
fatalities alone. This is particularly notable because the current EPA analysis does
not include benefits or costs from fatalities, but relies heavily on myopic consumers realizing
large future fuel savings to pass a cost-benefit test, which recent economic evidence brings
into question (Busse, Knittel, and Zettelmeyer, 2013; Allcott and Wozny, 2014; Sallee, West,
and Fan, 2016). Our results suggest CAFE standards may have positive net benefits even
without any undervaluation of fuel economy.
This is true for efficiency reasons, but lighter cars also save lives. Here's a recent discussion:
The Effect of Fuel Economy Standards on Vehicle Weight Dispersion and Accident Fatalities
Antonio Bento, Kenneth Gillingham, Kevin Roth
http://papers.nber.org/tmp/22190-w23340.pdf http://www.nber.org/papers/w23340
> we find that CAFE has been providing safety cobenefits because it encourages down-weighting. Using the Department of Transportation’s value of a statistical life, at $9.4 million, the welfare benefits of reduced fatalities, found in our simulations to range between 393 and 439 lives nationally, are more than $3.5 billion annually. ... our findings suggest that CAFE would pass a cost-benefit test based on benefits from reduced fatalities alone. This is particularly notable because the current EPA analysis does not include benefits or costs from fatalities, but relies heavily on myopic consumers realizing large future fuel savings to pass a cost-benefit test, which recent economic evidence brings into question (Busse, Knittel, and Zettelmeyer, 2013; Allcott and Wozny, 2014; Sallee, West, and Fan, 2016). Our results suggest CAFE standards may have positive net benefits even without any undervaluation of fuel economy.