With Higher Efficiency Standards, Lower Efficiency
It appears I have another bone to pick with Bill Chameides, Dean of Duke's Nicholas School of the Environment, who sang the praises of President Obama's plan to increase fuel efficiency standards for American cars on his Green Grok blog: "Obama Steers American Cars Into the 21st Century." Here is a classic example of government intervention leading to the exact opposite of its noble intention:
* If you want to encourage American manufacturers towards more fuel efficient fleets and American drivers towards more fuel efficient driving, a federal gas tax is vastly more effective, since the problem isn't manufacturers for making gas guzzlers so much as its us drivers for buying them.
* Let me say it again: the problem with emissions isn't that our cars are too inefficient, but that it costs too little for us to drive them, a market failure that a gas tax would help solve.
* Imposing higher standards on car manufacturers will just make cars more expensive, encouraging people to hold on to their cars longer before they buy new ones, thus reducing the efficiency of the total universe of cars being driven (since older cars are less efficient than newer ones).
* Depending on how the legislation is written, manufacturers may be able to exploit loopholes so as to "trade down" their fleet towards categories with lower standards, and/or "get to" make low-efficient models if they have enough offsetting high-efficient models.
As David Brooks notes in his column this week, this is par for the course for the Obama administration: having identified the right ends, and apparently with a mandate to be the means, they have created a tidal wave of support, without a proper vetting of whether the means actually lead us closer to those ends or if in fact they get us further away. In the case of fuel efficiency, government has identified a problem, and it has a role to play in the solution; but this isn't it.
Comments
Yes; that was known as "the loophole you could drive an SUV through." Even worse, to my understanding it was essentially what created the whole SUV boom in the first place. Before, SUVs were limited to people who actually used them for sporty purposes: low-level off-roading, and/or hauling skis, snowboards, and rafts. But when carmakers realized that SUVs on truck chasses qualified them for lower standards, I think that's right about when SUVs really started to take off.
On a related note, just to further emphasize the frequent ineffectiveness of government regulations in inducing the sort of behavior we want: A friend of mine admitted to me a year or so ago that he and his wife were looking to buy a second car, as they were about to become parents. They had always owned small cars, and had assumed their second car would also be a small car. But it seems there was a window of opportunity to qualify for a big tax credit for buying hybrid SUVs - policymakers were apparently hoping to convince SUV owners to buy hybrid SUVs instead of regular SUVs. So he and his wife, instead of buying a regular or hybrid small car, bought a hybrid SUV.
I'm not sure that's what the policymakers wanted. And, I'm not sure policymakers supporting higher CAFE standards are going to get what they wanted, either.