To be fair, CAFE needs to be massively redesigned or ripped up entirely. The way it currently works is by tying the required fuel economy with the footprint of the vehicle. The bigger the vehicle, the less efficient it has to be. But the curve is so steep that it makes it virtually impossible to build small compact cars that fall within these regulations. Notice how cars keep getting bigger and bigger with every redesign? This is the main reason why. The Honda Civic of today is massive compared to 20 years ago. Sure, crash safety plays a part, but CAFE is the main reason. Many automakers aren’t even selling cars in the US anymore, it’s all SUVs and pickup trucks, because these are easier to design for CAFE standards.
It’s also making cars less reliable. Gone are the days of robust, 500,000 mile engines. Most vehicles have downsized engines with turbochargers for better efficiency, but turbos are finicky and delicate machines that are expensive when they fail. Basically all engines use EGR (exhaust gas recirculation) to improve efficiency, but that introduces dirty air into the intake. Direct injection instead of port injection is commonplace now too, where fuel is sprayed directly into the cylinder rather than just before the intake valve where it can wash over the valves and keep them clean. Combine EGR with direct injection and you have a recipe for fouled valves that don’t seal and can potentially require an engine tear down to clean by hand. Add finicky electronic control for fuel injection, valve timing, ignition timing, etc. and you have a recipe for unreliable engines, everywhere.
Vehicles that are less reliable get scrapped earlier, but this doesn’t get factored in when discussing reducing CO2 emissions. The emissions of producing cars isn’t exactly negligible. There has to be a middle ground between efficiency and reliability, it just doesn’t make sense to squeeze out minuscule increases in economy at the cost of halving an engine’s lifespan. And it doesn’t make sense to deny us the small and efficient cars that the rest of the world gets to have, because CAFE says they’re too inefficient, while a gas guzzling monster pickup truck is perfectly okay.