Raising MPG Standards: The Second-best Solution to a Gas Tax Increase

(Comstock)

It got surprisingly little press coverage given the degree to which it will affect our lives (thanks, pesky world economic meltdown), but in case you missed it, the Obama administration recently worked out a compromise with the major automakers that will dramatically raise the corporate average fuel economy (CAFE) standards.

The new regulations mandate that the mix of new cars sold in the year 2025 must achieve about 54.5 miles per gallon (though if you read the fine print you’ll see that credits for various other green innovations mean that actual fuel economy will be more like 40 MPG.) For reference, the auto fleet currently on the road gets about 27 MPG. It’s a well-done agreement that will help avoid well-done citizens as global warming accelerates.

Before proceeding, let me note that I am strongly in favor of this policy. The problem of excessive fossil fuel use in transportation is multidimensional: if the issue of global warming doesn’t move you, the thought of Hugo Chavez and Mahmoud Ahmadinejad using our own hard-earned dollars to tweak our geopolitical noses should.

However, it is worth noting that raising CAFE standards is what political scientists and economists call a “second-best” solution; we could be doing considerably better if we thought all of this through more clearly.

This is not because CAFE doesn’t work; it does. In 1975, a few years before CAFE was implemented, average MPG for new cars and light-duty trucks was 13.1. In 2010 it was 22.5. Can this be attributed to CAFE? To a large degree, yes, as this graph makes clear:

CAFE standards were aggressively increased from 1978 to 1984, and, as the chart above shows, fuel economy responded. However, from 1985 until 2007 CAFE standards were no longer raised meaningfully—and MPG flatlined. The table makes it pretty clear that the CAFE standards created a floor under MPG for a 25-year period, when low gas prices (remember those?) rendered consumers otherwise indifferent to fuel economy.

So what’s the problem with raising CAFE today?

There is a long history of debate on whether “command and control” regulations (like raising CAFE standards) are a good way to bring about change. The other option is the use of price signals—which in this case would be increased fuel taxes—to influence consumer behavior.

Regulations do have some attractive features. For example, we can directly target what, when, and how much improvement we are getting. If we want fuel economy of 55 MPG, we can decree and achieve it with greater certainty than if we try to monkey around with prices.

However, in theory at least, economists generally prefer to do things with price signals as opposed to regulatory standards. Why?

Price signals inflict pain on consumers, but let them figure out what form they want to take it in. They in turn force producers to respond to their (altered) demand, but allow producers leeway in how that demand is met. This allows consumers and producers to change behavior in the most efficient possible manner.

Instead of CAFE, why not just raise the gas tax and let drivers figure out whether they want smaller cars, lighter cars, less powerful cars, more expensive cars, shorter-range cars, or, crucially, cars that are just as heavy, powerful, and cheap—but which get driven less?

This raises the true problem with CAFE. It misses out on a potentially key part of the solution to reducing fuel use: driving less. In fact, ironically, increased CAFE standards will have a perverse and unwelcome effect; better fuel economy will increase the fixed cost of driving (i.e. vehicle prices) but will actually reduce the marginal cost (i.e. fuel expenditures). To a degree, less thirsty cars will actually cause people to increase the number of miles they drive (as I’ve written about here).

With increased gas taxes, on the other hand, less driving will be part of the consumer’s toolkit. Some who absolutely need vehicles with poor fuel economy will have the option of avoiding the tax by driving less instead. As long as their fuel use goes down, why not give them that choice? Greater economic efficiency would result. In fact, the Congressional Budget Office ran the numbers in 2004 and found that cutting fuel use through taxes was considerably cheaper in the long run than raising CAFE.

Reducing driving through a higher gas tax would have other important benefits that improving fuel economy does not, like congestion relief and accident reduction. I personally am more sympathetic to automobility than most of my colleagues in my field, and I have faith that technological ingenuity will deal a powerful and probably decisive blow to our emissions problems. But raising the price of driving above current levels is pretty much a no-brainer; it has support that stretches across ideological lines in the transportation field, even among those like me (and even among carmakers such as GM) who do not see exchanging cars for biodegradable pogo sticks as the only possible solution to our transportation problems.

Another advantage of a gas tax increase is that it would start working today. Since the car fleet takes so long to turn over (according to the US Department of Transportation, automobiles these days stay on the road an average of about 12 or 13 years), it will be a very long time before the new CAFE standards actually translate into meaningful changes in emissions. But increasing the gas tax would have immediate effects.

(Some might object that fuel taxes are regressive and would hurt the poor, and to an extent they would be right. However, the rich drive considerably more than the poor, taking some of the stink off. And paying for many of the new fuel-economy technologies CAFE will result in will be regressive too.)

Thus CAFE might be a second-best policy: good, but not as good as we could have. Then why are we using CAFE while gas taxes stay laughably low by developed-world standards? Obviously, and understandably, because voters hate taxes. If anything, the political winds are blowing towards a lower gas tax, not a higher one.

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COMMENTS: 54


  1. Alan Moore says:

    A first year stat’s student would call foul on your cause-effect relationship claims.

    “Can this be attributed to CAFE? To a large degree, yes, as this graph makes clear”

    That graph shows NOTHING other than they both went up at the same time. You present no evidence that one caused the other. It is possible for consumer demand for higher MPG effected the auto industry, that tightened budgets caused the increase, or that auto companies attempting to differentiate themselves from other auto manufactures caused the increase. There are WAY to many variables that you have’t tested for for make this claim.

    I appreciate the analysis that you have done here in saying price side demand could better encourage higher MPG standards, but your claim of cause-effect relationship is pitiful.

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    • James says:

      But you forget that a lot of us were actually around in those days, and were able to examine all those other variables for oourselves.

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      • Gary L. says:

        In his defense, the inflation adjusted cost of gasoline tracks pretty closely with the graph above. Surely any Freakonomist is going to look at a conclusion drawn from a set of data, and consider the other possibilities.

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      • Travis says:

        On the other hand, the CAFE standards were (are) law that the automakers had no choice in following. Perhaps the other potential effects influenced the decision of the automakers to comply with the CAFE standards, rather than choose another route such as litigation claiming them as unconstitutional etc., but it’s quite hard to argue that the CAFE standards were not the catalyst to the increased fuel economy, particularly given the other indications (such as the fact that the fuel economy stabilized around the cafe standards, rather than some other number).

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      • Eric says:

        True, but then the graph should have shown a line with CAFE requirements in the different years. We know it would have shown the same sort of trend, but we could have seen it more clearly if the chart was more tailored to the point being made.

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  2. Steve says:

    There is a lot more talk about fuel prices these days than there is real price sensitivity. Based on the current fleet average MPG and a roughly12,000 miles of driving per year average, increasing fuel prices by $1 per gallon will cost the consumer less than $40 per month. Because the price is so low, compared to other expenses, there is little sensitivity, so the oil companies have been able to garner huge relative profits. Increasing taxes will price fuel at a point of higher sensitivity, forcing oil companies to be more price competitive.

    Therefore, the amount of the actual price increase paid at the pump will probably be significantly less than the total increase in taxes. This would be a net win for consumers, either in reduced taxes elsewhere or increased services, such as alternative transportation.

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    • Gary L. says:

      “Based on the current fleet average MPG and a roughly 12,000 miles of driving per year average, increasing fuel prices by $1 per gallon will cost the consumer less than $40 per month.”

      This is predicated on the assumption that the only fuel cost a consumer incurs is the cost of adding fuel to their own tank. This, of course, is incorrect, since increased fuel costs increase the cost of almost all goods. That said, I agree with you in principle. One way or another, increased fuel costs will cause consumers to demand increasingly efficient vehicles. I see no sense in sending that windfall to dictators with questionable (at best) intentions, when the same shift in consumer demand can be achieved through methods that keep those dollars here.

      I like to think of it as a “Cash for Clunkers” type policy, only better designed.

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  3. Clancy says:

    I think we need some kind of “arms reduction agreement” where liberals agree that some regulations are bad and conservatives agree that some taxes are good. If we can do this, we will be on the road to a more efficient government that does more to make life better and costs less.

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  4. Skip says:

    With the way our political system works, with its rewards for politicians who cater to the fickle winds of voter opinion, controlling behavior by increasing direct costs to voters will rarely work. No matter how much better the solution, increasing a direct voter cost is nearly always less popular and therefore dead-on-arrival for politicians. It’s too bad, but as long as we tie political success only to voter opinion, we’re stuck with less-efficient regulation.

    There’s also the issue of entrenched interests fighting against the regulation, so often we end up in a position where politicians fail to solve the problem entirely. They can’t raise costs if they want to keep voter opinion, and they can’t regulate without upsetting the entrenched interests and losing influence and campaign money. Thus the long delay in getting tougher regulations in place.

    All this is a pretty sad commentary on how our political system works, but unfortunately changing it has the same restrictions. Either unpopular or defeated by the entrenched interests.

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    • cackalacka says:

      Yep, a higher fuel tax can smooth supply/demand fluxuations, repair bridges in Minnesota (and maybe build a few more) and are infinitely more sensible than cafe or the proposed ‘GPS tax’ (tax on mileage.)

      It is possible for responsible tax policy to be phased in so it doesn’t crush the working poor, and it is possible for taxes to be a sensible instrument to determine rational behaviors.

      Damn shame that half the political infrastructure here in the states has sworn a blood oath to Grover Norquist and is plays policy like some UWF cage-fighting. Up-and-comers in other parts of the world will continue to play the long game; meanwhile we’re not paying the bills, rewarding shoddy domestics (that whinged up a storm about CAFE) while telling Johnny Refinance, “Sure you can finance that SRT8, it will have no consequences for your checkbook/neighbors safety/air; after all it’s got a HEMI!”

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  5. Mike B says:

    It;s not a good solution when it comes to actually paying for the roads people use. In fact higher millage will only make the problem worse as cars can travel further on their paltry 18 cent/gal tax payment. :-(

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  6. Mark Brucker says:

    Excellent points. I’d add that the increased driving will increase a lot of environmental problems. Not only will it reduce the benefits that would occur for global warming with a gas tax. It will almost certainly increase air pollution, including air toxics, water pollution, and hazardous wastes. It will also, as you noted, increase collisions. Which means more deaths, injuries, pain and suffering, etc. And the increased mileage and wrecks will increase costs for road maintenance, for emergency services, and health care.

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  7. Deron says:

    Why not apply a license plate tax based on the weight of the vehicle, and push towards toll roads that charge more for peak times?

    At least it could be argued that users would be bearing the cost of wear and tear.

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    • Nanno says:

      Funny you should say that, in the Netherlands we actually have a sort of license plate tax called “motorrijtuigenbelasting” (“motorvehicletax”) based on the weight, type of use (business or personal), type of fuel, age (over 25 and first registered before 1987 are excluded) and province (equivalent of a State, it’s more expensive in more densely populated areas) and then there is a second tax called BPM that is (now) based on the energy efficiency of the vehicle (until 2010 adjusted for its relative weight and size).

      Now the best thing is, as all this seems logical, our government wants to move towards a system of “tax per kilometer”. Which takes away the incentives for alternatively powered, light and efficient vehicles.

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  8. James says:

    “…why not just raise the gas tax and let drivers figure out whether they want smaller cars, lighter cars…”

    Because drivers do not get to choose what kind of cars they drive. They can only choose from what the auto industry is willing to produce. The American auto manufacturers are – and have been for half a century – only interested in building large, heavy, unresponsive vehicles (despite unmistakable market signals starting from the original VW Beetle), and spending uncounted billions on advertising in order to persuade the hard-of-thinking majority that those are what they really wanted all along.

    Hot debate. What do you think? Thumb up 13 Thumb down 16
    • Ross says:

      Can you please supply some evidence for your claim there is unmet demand for more fuel efficient vehicles? It has been my experience that people buy the largest, heaviest, most powerful vehicle they can afford.

      The sentiment that people would naturally buy fuel efficient vehicles of only the Evil Corporations would make them reminds me of the frequent lament on the comments board at the YMCA: “Why don’t you put healthy snacks in the vending machines?” The response: “Because when we do, no one buys them.”

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      • James says:

        How about the fact that people HAVE been buying the somewhat more fuel-efficient vehicles produced by foreign automakers, and have been doing so since the first VW Beetle came ashore back in the ’50s. We can draw a line from the Beetle through the Honda Civic to the Toyota Prius. Along the way we could ask why the American manufacturers who owned the market half a century ago have lost half of it to foreign automakers, whose base products were smaller and more fuel-efficient than anything Detroit built.

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      • Mark Brucker says:

        TV ads suggest that the manufacturers think people really care about fuel mileage. They keep harping on xx miles per gallon…often stretching the truth in trying to get buyers…..

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  9. Tuckster says:

    The implications for governmental control are also vastly different between CAFE and gas taxes. The externalities of gas consumption would rationally be imposed by the government. Direct industry manipulation is a horrible idea, however, as even an agency of car experts can’t predict the future of the car industry (thank god–look what happened in the private market). It’s like price-fixing.

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  10. Chris says:

    Did you happen to think of anyone outside the northeast?

    Most places in the US don’t have mass transit and couldn’t have effective mass transit even if the demand was there. In all but the few places that do have effective mass transit raising the gas tax would only have the effect of making people poorer. It wouldn’t reduce the numbers of miles driven in a meaningful way due to there not being any other alternate form of transportation available. If the gas tax was particularly high for a long enough period of time it would potentially help to change patterns in where people live vs work, but that would take a lot longer than the time it would take to replace cars with the new CAFE standard.

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    • James says:

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      • JimFive says:

        Of course, when gas goes to $6/gal and Joe is paying $2400/yr in gas he can no longer afford to save the money to buy the 50 mpg car. The idea that the 25mpg used car is going to more expensive than the 50mpg car is absurd. So, no, he’s not $400/year richer. If he’s lucky the car payment + insurance equals the gas savings and he breaks even.

        JimFive

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      • James says:

        “The idea that the 25mpg used car is going to more expensive than the 50mpg car is absurd.”

        Easily disproven by checking your local Craigslist. eBay motors, or any other site with a good selection of used cars.

        Or you can look at new car prices. Seems like a simple rule of thumb that (barring a few outliers like the Tesla), the more a car costs, the worse the gas mileage. (It’d be interesting to see this as a graph, but a quick search doesn’t find one.)

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  11. robu says:

    Why is it that the government always tackles the supply and not the demand? Drug War-> go after the supply (cartels, smugglers, etc.) and ignore the demand (drug users). Aren’t we repeating that with CAFE->go after the supply (auto companies) and ignoring the demand (car owners/purchasers)? By enforcing a CAFE number, aren’t you just guaranteeing that the car companies have to sell more unprofitable vehicles for every high profit vehicle (remember that it is an average….)?

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  12. Alia D. says:

    I’ve hear it argued that one effect of CAFE is forcing families that needed the option of seating up to 7 or 8 people from station wagons, which count as cars under CAFE, to SUVs which don’t count as cars under CAFE, thus resulting in a substitution of a less fuel efficient vehicle for a more fuel efficient car. Even if SUV and mini vans were pooled with cars I would speculate that some of the demand for larger vehicles is being driven by the desire to facilitate carpooling. And two smaller, more fuel efficient, vehicles might end up using more gas then the same trip in one larger vehicle. So using regulation to force up average fuel efficiency per car could actually force down the fuel efficiency per transportation tasks in certain scenarios

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    • Joshua Northey says:

      40% of miles driven are single occupant. 7 or 8 person families are fairly uncommon.

      All the 7 and 8 person families can keep their SUVs or station wagons, or dump trucks if we can get the commuters to use a vehicle that is more appropriate for their needs (something the size/power of a motorcycle).

      I bike to work through rush hour and at rush hour 85% of the cars are single-occupant and probably 95% of them are not carrying enough cargo to justify the size vehicle they are using.

      A huge over-engineering of the problem of getting from A to B. Each person surrounded by hundreds of pounds of metal and several cubic feet of machine, when they have 1 200lbs person and a handbag 9 times in 10.

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      • BikerDad says:

        Yes, key word is “at rush hour.” However, we don’t use our vehicles just during rush hour. We use them for family vacations, (find a car that can carry a family of four, and tow a 9,000lb trailer…), for running the kids to and fro, for helping your brother move, etc.

        For the vast majority of consumers, the overriding, often unvoiced, feature of a vehicle is flexibility. Will this vehicle do 95% of what I want to do with it?

        IF y’all want to solve transportation “problems”, you really should start by asking what transportation consumers WANT. Get your solutions in accord with those, and you’ll be successful. Ignore what consumers want, and you’ll be in for a world of hurt.

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  13. Radhik Hairam says:

    Fuel consumption is highest in USA due to heavy utilization of cars! Elementary, yes; but the aspect I wish to emphasize is that most of them are occupied by one person who drives himself/herself. Why this extravaganza? Small cars with only two seats may be a solution, with higher mileage true; but they will be v light and cannot assume high speeds witnessed now! Majority of work force use cars singly and that leads to more usage of gas, as also parking space and allied problems; WHY not introduce Metro Bus Service in Major cities and ensure that is used by office goers, by some suitable means; tax their cars more IF they are used for office trips ! Difficult? Introduce Office transport at regular intervals so that flex time operations are also rendered feasible and employees are forced to use it to save money on gas and thereby help green peace movement and reduce consumption; May appear too simple, but surely deserve to be given a thought; MUST reduce traffic or road for results!

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  14. IE says:

    Increase the gas tax, but lower the income tax (or send out tax rebates), making it tax revenue-neutral.
    That would decouple the gas tax issue from the usual more taxation vs. less taxation debate. That’s the only way to make politically acceptable in the current environment.

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  15. Spokane Al says:

    I wonder about the additional impact on food and everything else that often travels on roads to reach our tables/stores etc if gas taxes are raised. By only measuring the impact on driving due to increased taxes, aren’t we missing a large piece of the puzzle?

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  16. MeanOnSunday says:

    Fuel efficiency of US cars is terrible compared to those in Europe. I was just in England for a couple of weeks and drove one of the larger VW models (since I had 4 passengers and a lot of luggage). I averaged 39 mpg, driving mostly on small one lane roads. My Dad is currently driving a Citroen (diesel) and averages 52 mpg with very little highway driving. This totally kicks the butt of the similarly sized “eco-wonder” Prius which has a 42 mpg rating.

    The technology is obviously already available and without the added cost of electric/hybrid engines.

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    • John B says:

      A good point—but you are missing the big picture.

      The reason European cars get better mileage is that they have fewer mandates and regulations than the US. You cannot legally drive the European cars in the US.

      The US “Smart Car” gets much better mileage in Europe because the one sold here has to be modified to meet additional US requirements.

      I am not saying the US modifications are not good–but there is a price. Much lower fuel mileage.

      Allowing the cars made in Europe and the far east to be sold here would do more to increase gas mileage than any CAFE standard and any gas tax.

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  17. Chun says:

    While raising the gas tax would result in less miles driven, that still doesn’t change the political reality of the situation. Very few people in /any/ Legislative session (regardless of whether any particular party is in control) would be willing/able to raise the tax. Regardless of the logical/rational desires to do so.

    On the other hand, CAFE standards can be passed with relatively less opposition. While it may be in your opinion the Second Best option, it’s the option that will actually be accepted. And what this also means is that in the event that a compromise can be reached legislatively, you could also raise the fuel taxes. While it’d have a lessened impact than solely a tax increase, it would still change the math involved so that you could have a easier transition to more or equal mobility with less environmental harm.

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  18. AaronS says:

    Hidden due to low comment rating. Click here to see.

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  19. Chad says:

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  20. Paul says:

    The gas tax approach won’t work well when cars are not gas powered, i.e. electric. Various approaches to mileage-based taxes have been floated over the past couple years (in Oregon or Wash. St. I believe) and have been shot down, but eventually the mileage-based tax will probably win out. The gov’t wins with it’s CAFE approach because it (1) increases nannystatism while appearing to look serious, and (2) doesn’t tie itself to the soon-to-die gas tax.

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    • Sam says:

      For it to be effective, the gas tax need not be any more than what it would take to cover all the external costs of gas consumption (pollution, foreign wars, damage to the environment …). Other forms of energy would be taxed (or not) based on their own external costs (e.g. tax the fuel used to power a coal or oil based electric plant).

      There are, of course, external costs of just having that vehicle on the road regardless of the energy source. So a perfect model would need to account for miles driven (and probably the weight of the vehicle and other factors that raise the external costs). Technology should be able to handle that efficiently – requiring each vehicle to have a GPS monitor would probably be cheaper than implementing and enforcing the somewhat arbitrary CAFE standards.

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  21. Mark H says:

    Even as far as top-down regulations go, CAFE standards are extremely ugly: when people get better mileage they drive more, which increases traffic accidents (and fatalities), congestion, and even some emissions, like NOx and carbon monoxide. This policy trades one externality for several larger ones.

    Contrary to what Morris is saying, if it’s not politically feasible for the government to enact a fuel tax (or cap & trade), CAFE is not a worthwhile second-best. Taking all externalities into consideration, cost-benefit analyses of CAFE come up extremely negative.

    For more info, Andrew Kleit has done some great research on CAFE. Here’s one of his papers on the subject: http://www.freepatentsonline.com/article/Economic-Inquiry/115635786.html

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    • James says:

      “…when people get better mileage they drive more…”

      Would you care to offer data to support this claim? And particularly that any extra amount driven is enough to offset the savings in consumption from the improved mpg?

      Quite intuitively, that idea really does not fly. First, the amount of driving people do obviously has an upper bound, due to the fact that there are only 24 hours per day, and some of them must be spent sleeping, eating, earning a living… Second, for many of us, driving is a more-or-less disagreeable chore. The primary “cost” of driving isn’t the gasoline, it’s the time we must spend doing it when we could be doing other things instead.

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      • Mark H says:

        From Morris’s article:

        “To a degree, less thirsty cars will actually cause people to increase the number of miles they drive”

        From the Kleit paper that I linked to:

        “CAFE standards put some or most new car buyers in more fuel-efficient vehicles. This lowers their marginal cost of driving and causes them to drive more, a phenomenon referred to as the rebound effect. A recent study Greene et al. (1999), accepted by NHTSA in its 2003 proceedings and whose results I employ, finds that for every 10% that fuel economy is increased, driving increases 2%.”

        CAFE standards almost certainly reduce the amount of fuel that is consumed–as you put it, I am not claiming that the extra amount driven is enough to offset the improved MPG. My claim is that there are other important driving-related externalities: when people drive more, they increase congestion, cause accidents, and release more VOCs, NOx, and CO (all of which is more thoroughly described in the Kleit paper). The cost of these exceeds the social benefit of the reduced gas consumption.

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  22. Michel says:

    Can this idea be tested by looking at countries where tax on fuel has actually been used as a means to lower fuel consumption. The Netherlands have been trying for quite some time. For your information, a gallon of petrol costs about 8.80$ a gallon. The difference between the price in the Netherlands and in the US is probably for over 90% caused by taxes.

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  23. Eric M. Jones. says:

    ….and when the population reaches 10 Billion?…..15 Billion?…20 Billion?

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  24. ben says:

    Good post, but I would switch : “the thought of Hugo Chavez and Mahmoud Ahmadinejad using our own hard-earned dollars to tweak our geopolitical noses should.” to…

    “the thought that the US toppled a secular democracy in Iran in the early 50′s and instated a religious totalitarian regime should.”

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  25. Justin Credible says:

    Yes, lets tax and regulate until our overlords get us to act the way they want us to act….hey were not forcing you to do anything, we are just limiting your options…one wonders when they will just rename it the Peoples Republic of America.

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  26. Allen says:

    Like most people who like government controls you lean toward the stick instead of the carrot. You can change behavior by penalizing people who do what you don’t like. Another way is to reward behavior you do like. We subsidize farms for growing desired products, oil companies and airlines so why not subsidize consumers for making your desired choice?

    Going to regulations to force manufacturers to build what you think is good or penalizing buyers for not making what you think is a good choice is the mark of the person who thinks they have the right to dictate to others. Make the price of your favorite choice less than the behavior you don’t like allows people to spend more for their “objectionable” behavior but spend less to conform to your idea of what is “better”.

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    • Chun says:

      We do both. Government has instituted both carrots and sticks in this industry.

      We have a Gas Guzzler Tax for cars that get horrible mileage(which people have the option to avoid by not buying those cars). And we’ve incentivised the purchase of cars that get better mileage, thus reducing our dependence on foreign oil(whatever size that reduction actually ends up being).

      Cash for Guzzlers was the most recent Federal program. But the government(I include both State and Federal in this statement) has also introduced tax rebates for purchasing certain products. On a more local level, in the initial phases of the introduction of Hybrid vehicles, many of those cars were given a waiver that allowed them to use HOV lanes while only carrying a single person. As the percentage of people who have these types of vehicles has increased, those waivers are no longer being granted.

      And as a side note, I’d like to point out that Ford’s Model-T, the first mass produced US automobile, got around ~13–21 mpg. At almost a hundred years after its development, it’s a pity that fuel efficiency research by automobile manufacturers has only gotten us this far. CAFE standards may be the kick in the pants they need to actually get us real improvements in efficiency.

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  27. Caleb b says:

    “…Ford’s Model-T, the first mass produced US automobile, got around ~13–21 mpg….”

    I’ve pointed this out before, bur anytime the discussion of MPG comes up, some hack quotes this, so I feel compelled to repeat the facts.

    Briefly, the model-t carried very little weight, it’s top speed was very low, and it could not go up steep hills without stalling out (unless in reverse). Despite the lower speeds, crashes were very dangerous as it had no seatbelts and the glass would shatter, severely cutting occupants.

    The “we haven’t advanced in auto-fuel efficiency in 100 years” act is completely misguided. It’s an apples to oranges argument every time.

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  28. Thinking Cap says:

    The problem with your argument is that too many people won’t stop driving the way you think they will. The new middle class are the millionaires, and raising fuel prices won’t affect them at all. Those on a marginal income will be severely affected, and may no longer be able to afford to get to and from work. Also, the cost of food will spiral up sharply making it unaffordable to the same group. You’re not thinking it through!

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  29. Phil Jones says:

    If we would have increased the gas tax after the 70′s oil crisis we would now be driving electric or hybrid cars getting 100 mpg. Also the train systems would be a lot better. Finally, and best of all, no wars in the Middle East for us.

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  30. Barbie says:

    A gas tax will discriminate against lower and working class citizens, especially in rural areas where transportation is needed to continue working and supporting their families. However, with meager wages, individuals will not be able to afford the extremely high prices and regulations which will reserve driving as a privilege for the rich and work in favor of keeping the poor poor by making them immobile (not able to commute for work or educational purposes).

    Also, the poor in inner cities would depend on public transit, which will also be impacted by higher prices and raise bus fare which will make mobility extremely difficult.

    Driving less is definitely better, but using money to dictate that just enforces that the poor will be driving less.

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    • Eric Masaba says:

      @Barbie,

      This is called social inequity in transportation. The same applies for congestion charges which have disproportionately adverse impacts on the poorest in society, further exacerbating the detrimental effects of poverty.

      A private mass transit alternative is available and indeed possible.

      See:

      Eric Masaba (@TexxiOps)

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  31. Eric Masaba says:

    How about Jevons’ Paradox, which states that in some situations, higher fuel efficiency for engines results in more overall fuel use?

    This is called “Boomerang”. More MPG means more travel (since it becomes cheaper) and more overall fuel use.

    http://en.wikipedia.org/wiki/Jevons_paradox
    http://johngeraci.com/blog/2011/11/why-smart-cities-wont-stop-global-warming-and-may-even-accelerate-it/

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  32. G. Horvath says:

    I think your analysis missed an important dimension of the new federal CAFE dictate. Unless there is a revolutionary development in engine efficiency or the government somehow finds a way to repeal one of the laws of thermodynamics, any major increase in fuel efficiency will be made by building cars that are smaller and lighter. Much smaller and very much lighter. The amount of steel will be reduced and more plastics and composite materials will form the bodies of the new fleet.

    Smaller, lighter and very much less protection for the occupants.

    And we’ll need a lot of very small vehicles to push the average high enough to meet the federal requirement. My diesel-powered car gets 48 mpg on the highway. It’ll take several ‘Smart Car’ equivalent vehicles to raise the overall average to 57 mpg. That’s a lot of tiny little cars out on the road. I don’t know about you but I’d be very uneasy to take my family on a drive in such a tiny vehicle.

    This decrease in size and mass will be to the detriment of those forced to ride inside. Traffic collisions will become more hazardous to the drivers and passengers.

    Certainly more fleet MPG will lower gas tax revenues under existing taxation schemes. I expect that those savings will be more than offset by higher insurance and medical costs as collision damage increases and more folks go to the hospital or the morgue.

    I’d be interested in seeing a report that correlates automotive casualties to vehicle size and composition. It’s something that gets no media attention.

    There’s more at risk with this federal dictate than just a loss of tax revenue. People are going to die.

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