The Obama administration this week unveiled its new proposal to raise fuel efficiency in American cars. Clear as smog, right? Well, Freakonomics Q&A guest Keith Hennessey, a former economics adviser in the Bush White House, has written up a detailed post on the proposal’s complications and its likely unintended consequences. [%comments]
What You Didn't Know About Obama's Fuel-Efficiency Rule
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Wouldn’t it be easier just to raise gas taxes? You could reduce some other taxes if you didn’t want to increase taxes overall. Or am I naive?
The old NHTSA analysis was very controversial and I believe extremely poorly done. The claim that this would do little to reduce climate change emissions I think is highly questionable. I think a far better way would be to tax driving and fuel use. The Obama proposal will have some rebound effects as people will drive more mileage because of lower fuel costs per mile. Which will increase pollution, crashes, etc. But it is still going to reduce GHG emissions almost without a doubt.
Traciatim, fair enough on small cars vs. SUVs (though note that for the deaths per registered vehicles, the increase for pickups is roughly double what it is for small cars over SUVs). Of course, I’m not all that worried about the relatively small difference in numbers. 100 deaths per million registered vehicles, BFD, who cares.
Care to address the excruciatingly improbable odds of being in a horrific crash? “OMG it’s a deathtrap!” is only an issue if you’re worried about either driving into a wall at 60 mph, or being hit by someone else at similar speeds. I’d suggest that if you’re worrying about that, you’re wasting your time.
Traciatim, “more crumple” does not apply to SUVs which are the real offenders here and which are considerably *stiffer* than passenger cars. More people switching from 12MPG compensator-mobiles to 24MPG full-size cars would be better for safety as well as for the environment. Not subsidizing auto production and use at the expense of mass transit would be even better in both senses, as it would reduce vehicle-miles and make those vehicle-miles more efficient. Somehow I think Hennessey probably counts that as a “societal cost” rather than a benefit too.
The President’s proposals will not decrease fuel consumption nor our dependence on foreign oil. They are a continuation of the failed CAFE policies that have brought us the SUV and other gas guzzlers. Claims that additional regulation will close loopholes are naive. Never underestimate the power of the market to out-smart government regulations.
Decreasing fuel consumption is an extraordinarily simple problem to solve. Increase the price of fuel. Many will probably recognize this solution from their high school economics classes. It is time tested and proven.
This one simple action also provides an automatic incentive for the market to increase research into alternative fuels.
President Bush did not have the backbone nor the charisma to advance this idea. It was my sincere hope that Obama’s message of “change” would include the use of sound economic principles. Unfortunately on that issue I have been profoundly disappointed.
seems to me that if a consumer pays 650 dollars more for a car but then saves 350 dollars a year on gas it’s not too terrible of a deal for the consumer.
Who knows that extra grand in a persons pocket after 5 years might even contribute to creating a job or two.
Check this out for a preliminary listing of all the CAFE loopholes. I don’t understand why the greens are happy about this legislation, especially when the auto industry was fervently behind it. Gotta read the stuff more closely. CAFE is about the worst possible way to try to achieve what they say they’re trying to achieve. However, if their goal is to look like they’re doing something without actually doing something, then they’re winning.
http://www.thetruthaboutcars.com/cafeghg-standard-loopholes-appear/
Sure, if you look at injuries the stats are pretty much just as skewed too. Considering the odds of being in a car accident in your lifetime are pretty good, especially if you own a car, wouldn’t you prefer the mid sized sedan or larger that cuts your risk of death or injury by roughly half?
Having been in a high speed accident where a rather large car made a left turn across the passing lane on a highway (making us T-Bone the left turning car, since we were attempting to pass) I’m putting my family in a mid-sized or larger.