The fuel efficiency of cars in the US has gone down for most of the past two decades (so to speak). Obama now seems ready to ensure that isn’t true in the years ahead.
According to Politico, he has been conducting “secret meetings” over recent months with state officials and representative of the auto industry, and tomorrow he will announce a boost in fuel economy standards to 35 miles per gallon by 2016. Arnold Schwarzenegger and auto executives from around the world will reportedly be flying to DC to stand at the president’s side when he unveils the plan.
The new rules “will harmonize the corporate average fuel economy, or CAFE, standard and the Environmental Protection Agency’s greenhouse-gas standard. That way, officials explain, industry will not have to worry that the administration will regulate those on separate tracks.”
The new plan will also clear up what was becoming a muddled regulatory situation for auto makers: “The administration will bill the tailpipe-emissions announcement as historic because it avoids a patchwork of standards and has won agreement from so many stakeholders, including automakers, state governments, the Department of Transportation and the EPA.”
This is good news, though one wonders how it will look in few years. If, as the energy analysts at Raymond James and some other experts believe, we face dramatically higher oil prices in the years ahead, it will probably turn out to be immaterial. Fuel efficiency will rise–and rise fast–by economic necessity. If, however, oil supplies hold up for the medium to long term, then this will stand as a meaningful and appropriate nudge to the market.
On the question of style points, the president scores highly again. Trying to raise CAFE standards has always been a horribly messy business in Washington. Obama handled all the negotiations first, before making the announcement. It probably made things easier that the industry can’t fight back now — but the process was still remarkably clean and efficient. Like cars of the future. [My attempt at dumbest kicker ever. -Ed.]
May 18th, 2009 at 6:43 pm
I took environmental economics from a Marxist Quebecker who told the class that fuel emission standards had long been discredited as a means of reducing fuel consumption. Efficiency just makes people just drive more miles and comes at non-negligible environmental cost (since hybrids etc require massive embedded carbon), not to mention the loss in utility in general resulting from regulation.
Just sayin’.
May 18th, 2009 at 6:57 pm
Jevon’s Paradox, it’s called.
Yeah. I mean, I know. But I suspect there is still some good in it. Perhaps if you instituted congestion pricing with it.
And: Quebecois, no?
-Jebediah