I had posted earlier on supporting government intervention to reduce fuel consumption, specifically the CAFE standard. Here's another perspective from Matthew Iglesias at the American Prospect that has me rethinking:

http://www.prospect.org/web/page.ww?...rticleId=10183

I especially like his point of rewarding lower consumption vs. penalizing specific vehicles. What do you think?

Mike

 

The link is working again.

 

While I agree with his assessment that CAFE simply does _not_ work, I disagree with his argument on the fix.

He pre-supposes that the car makers actually WANT to produce SUVs.

Car companies want to make a profit -- just like any other business. CAFE drives them to undercut the cost of economy cars (they lose money on every car they sell), but more than make up for it in the higher-profit margin of the some other car. What that other more "desirable" car is, is completely up to the consumer. Currently SUVs are very popular, but they also charge a big profit margin on high-end luxury cars and sports cars.

With CAFE gone, _all_ cars would suddenly become "profitable" cars -- so the car company would no longer be incented to push the SUV moreso than the economy model.

I'm also skeptical of any tax that you end up paying "a little at a time" (like the tax at the gas pump). People don't respond well to it. For some strange reason, people will tolerate "a little pain, but frequently" much better than they'll respond to "a lot pain just once a year". Don't believe me? Look at the amount of "sin" tax that cigarette smokers pay per year? You can even look at people who visit Starbucks twice a day at $5/visit (and there are tons of these people) -- they're burning through $2500/year (based 5-days per week x 50 weeks), but if you tell them they're spending that much, they wont believe you until you make them do the math.

The pump tax might seem to be more "fair", but if you want people to take notice and have the desired impact of changing buying decisions, then I think charging them an annual fuel-economy tax everytime they go to renew their plates/tags would be more of a sticker-shock. You'd get even more impact if you legislated a requirement that the annual tax for fuel economy had to be estimated and printed on the window sticker (a bit more complicated though because those taxes are usually set at a state level).

I suspect this would have a much stronger impact on consumers the next time they go to buy a car.

 

I agree with the author of the article that the CAFE standards have outlived their usefulness. But I disagree that it's liberals that are somehow to blame for weak CAFE standards. CAFE was and still is a fall back since we couldn't implement a real gas tax.

I'm a firm believer that a society should tax the things it doesn't like and provide incentives for the things it does like. "Feebates" is the term Amory Lovins of the Rocky Mountain Institute coined to describe this idea (www.rmi.org). In his most recent book, The Oil End Game, he explains how GIVING all low income households a brand new hybrid car would be cheaper for society in the long run than leaving them to drive clunkers. You can download the entire hardback book for free www.oilendgame.com.

 

You silly greenie. Liberals are to blame for *all* society's ills. What cave you been living in ??

 

You make a good point about an annual tax having more "pain" than a tax at the pump, but your suggestion penalizes the person for their car choice rather than how much gas they use. Why should you pay a large annual tax on a Hummer if you drive it only 1000 miles a year and I pay nothing for commuting 200 miles a day in a Prius? I'd use 10 times the amount of gas that you did.

Mike

 

I agree with this, however I think there should be some yearly penalty for choosing a vehicle that pollutes more. That way emissions will be on the table for people who only respond to financial motivation. Getting the Hummer and other heavies out of the emissions loophole is a must as well.

 

I fully believe CAFE is NOT broken, and that it DOES serve it's intended purpose. Luckily for me, I've used my superpowers to create the new multi-class system to raise CAFE for light trucks, much as many of you have read me post about in the last year or so. Pay no attention to the fact I don't work at the EPA, it was my psychic powers and tin foil helmet that did it.

 

SolarDad is spot on. The goal is to decrease consumption. Tax the consumption. If people want to buy hummers, gut out the engine, and live in the bloody things, that is a OK with me.