There are some scenarios where it’s a coordination problem. People could drive light fuel efficient vehicles if so many other people weren’t driving large, heavy, dangerous ones, for example.
Those large heavy vehicles are incentivized by loopholes in regulations because politicians were afraid of affecting "domestic jobs" as US automakers weren't even trying to compete with JP fuel-efficient imports.
Yeah, apparently it was originally to try to stop the rules from killing Jeep, which was having a hard time. New ones that allow more emissions for bigger vehicle footprints are also a big issue since it encourages larger vehicles.