Light trucks' share of the US light vehicle market rose from 20% in 1980 to 41% in 1996. By 1996, annual energy consumption for light trucks was 6.0 x 10{sup 15} Btu (quadrillion Btu, or quad), compared with 7.9 quad for cars. Gasoline engines, used in almost 99% of light trucks, do not meet the Corporate Average Fuel Economy (CAFE) standards. These engines have poor fuel economy, many getting only 10--12 miles per gallon. Diesel engines, despite their much better fuel economy, had not been preferred by US light truck manufacturers because of problems with high NO{sub x} and particulate emissions. The US Department of Energy, Office of Heavy Vehicle Technologies, has funded research projects at several leading engine makers to develop a new low-emission, high-efficiency advanced diesel engine, first for large trucks, then for light trucks. Recent advances in diesel engine technology may overcome the NO{sub x} and particulate problems. Two plausible alternative clean diesel (CD) engine market penetration trajectories were developed, representing an optimistic case (High Case) and an industry response to meet the CAFE standards (CAFE Case). However, leadership in the technology to produce a successful small, advanced diesel engine for light trucks is an open issue between U.S. and foreign companies and could have major industry and national implications. Direct and indirect economic effects of the following CD scenarios were estimated by using the Standard and Poor's Data Resources, Inc., US economy model: High Case with US Dominance, High Case with Foreign Dominance, CAFE Case with US Dominance, and CAFE Case with Foreign Dominance. The model results demonstrate that the economic activity under each of the four CD scenarios is higher than in the Base Case (business as usual). The economic activity is highest for the High Case with US dominance, resulting in maximum gains in such key indicators as gross domestic product, total civilian employment, and federal government surplus. Specifically, the cumulative real gross domestic product surplus over the Base Case during the 2000--2022 period is about $56 x 10{sup 9} (constant 1992 dollars) under this high US dominance case. In contrast, the real gross domestic product gains under the high foreign dominance case would be only about half of the above gains with US dominance.
