Raising the Corporate Average Fleet Economy (CAFE) standards appears to have a 10 – 20% rebound effect – as gas mileage improves, some of the fuel and greenhouse gas savings is lost to increased driving. (See Effectiveness and Impact of Corporate Average Fuel Economy (CAFE) Standards)
The rebound effect in Europe is 20 – 30%.
That’s the figure obtained when trying to separate out various different effects across a continent. Diesel cars in Europe get better mileage than gasoline cars, and diesel is cheaper than gasoline there. (Back in the 1970s, the price of oil went up quickly, what with OPEC and Iran. When the price of oil came down, the Europeans left the prices of gasoline and diesel high, taxing them became a major source of revenue. The price of diesel did come down some to please the truckers. Today, diesel is about $1/gallon cheaper than gasoline.)
Lee Schipper, et al, found that diesel drivers use more fuel and emit more greenhouse gases than do drivers of gasoline cars. As noted, 20 – 30% is because of the rebound effect, perhaps a larger portion can be attributed to lower diesel prices, some because long distance drivers self-select for diesel, and some because people with two or more vehicles will use the cheapest for long distance trips.
It’s like treading water. How about if we improve gas mileage and increase fuel taxes? We’re going to have to raise taxes anyway, so why not raise taxes on fuels?
More explanation There are two rebound effects: buying a more or less fuel efficient car as fuel prices change, and driving more or fewer miles after buying the new car. The 20 – 30% figure is the change in driving behavior with the new car if only the improved mileage is taken into account. Europeans, from a number of countries with a number of pricing schemes, switching from petrol to diesel increased their yearly distances from 16,000 km to 19,500 km, a 22% increase. People switching from diesel to petrol reduced driving distances from 21,000 km to 15,000 km, a 29% decrease. These changes appear to correlate with the change in fuel costs, including better fuel mileage, as few simultaneously made other changes such as moving to or from the city. The diesel gets about 26% better fuel mileage than does the petrol car, so the shift in behavior to diesel cuts the reductions in fuel use and greenhouse gas emissions by 85%. Of that 85%, some 20 – 30% appears to come from improved mileage and the rest from the lower prices of diesel. The price of diesel is being raised across Europe.
The assumption is that Europeans show a greater change in behavior with changing efficiency because they have public transit as an option—Americans are choosing between one car and another, while Europeans are choosing between public transit and cars with a range of fuel economies.