Abstract

The likely effect of an unexpectedly large increase in the period 1990 to 2010 in retail fuel price on the average fuel efficiency of light-duty vehicles is shown here. Light-duty vehicles include all cars and light trucks. Because vehicles consume a substantial part of energy, average vehicle fuel efficiency is an important indicator for greenhouse gas emission and climate change policy making. The lower the fuel efficiency, the higher the emission per vehicle, and, consequently, the greater its contribution to greenhouse gas production. Gasoline cost is the major vehicle operating cost. An increase in gasoline price would, to some extent, cause users to choose more fuel-efficient vehicles in order to reduce vehicle-operating cost. The Prairie Provinces would have the most sensitive response in fuel efficiency improvement to retail fuel price.