The Inconvenient Truth

I think one needs to sympathize with John Dingell's view of the climate change issue. Environmental leaders have concluded that it's impossible, in the short term, to pass legislation adequate to the scale of the problem. The inconvenient truth, it seems, is just a little too inconvenient and people don't want the kind of taxes and so forth that would put a dent in emissions. So, instead, they've hit upon the most convenient solution: Higher CAFE standards, easy, popular, and with the costs hidden and mostly born by car companies.

This is, however, a bit inconvenient for the auto industry and those who work in it -- i.e., Dingell's constituents. What he's saying with his "yes to unrealistically aggressive action on climate change, no to high CAFE standards position" is, basically, "stop giving me shit about this." And he's right. Either Democrats are going to commit to taking politically inconvenient -- inconvenient for all of them -- stands to curb carbon emissions, or else emissions won't be curbed. At the moment, the party isn't there. So why should he be singled out as a figure of opprobrium for doing, in essence, the exact same thing as everyone else and refusing to take a stand that's inconvenient. Your average Democrat who wants to raise CAFE standards isn't running any political risks by doing so.

Comments

hmm...I suppose one can understand this perspective from a NIMBY, must serve my constituents, point of view (see also Schumer and hedge funds, Obama supporting coal-to-oil research etc, Kennedy not wanting windmills etc), but at the end of the day, it's not at all feasible to say that we can't do anything unless it inconveniences everyone equally. It sounds like the fair thing to do, but at that point nothing would get done and you're even worse off than before. If raising CAFE standards is the right thing to do generally (as opposed to politically), it should be done, along with a bunch of other things that would be pretty unpopular with various groups of people.

Posted by JMS | August 10, 2007 9:47 AM

for some reason this post made me think about the similarities/differences between the political parties in the states and where i live now, germany. it seems like the democrats and republican parties are just useless for tackling problems that we have today and will have in the future. don't even get me started on the republicans, while the dems can't/won't do anything about the environment, can't/won't stand up for civil liberties and the rule of law. and it's about time for a sea-change in the foreign policy department if "serious"="invade/stay in iraq" or "serious"="don't rule out using nukes to take out individual/small group targets" ??!!?!?

the nice thing about parliamentary systems is that it's not terribly hard to make new parties. and 3rd parties can still exist and play a role other than vote spoiler. witness the greens and the liberals in germany. the greens really are for big environmental change --- shutting down coal and atomic power in germany, etc. the liberals (read libertarians) really are for civil liberties, which doesn't amount to the same arguments here as in the states, but even so, less state control over life is their goal. these two parties together poll just above 20%, so they're not massive, but they get these issues on the table and, what's probably more important, legitimize the issues and make it impossible for the dominant parties/culture to dimiss their ideas as "fringe"="unserious".

i gotta think there's a lot of inertia to big political parties, which is why being able to start new ones seems like a good idea.

Posted by bs23 | August 10, 2007 9:50 AM

I don't really disagree with what you're saying, but do want to point out that we probably should raise CAFE standards in addition to doing a bunch of other stuff that puts a price on carbon emissions. Policy people love to abuse CAFE, with good reason -- it's not at all how you would design an optimal plan to discourage fuel consumption. Economically, it's wrong in so many ways.

And yet, it's worked in the past and would work again. Demand for gas is weirdly price inelastic, and there's good reason to think that a tax on gas combined with increased CAFE standards would be the quickest route by far to lower consumption.

Posted by Adam | August 10, 2007 9:52 AM

Perhaps it is because I spent my early years working on projects with 5-15 year timelines, but I can't agree. It takes a minimum of 10 years to significantly change direction in the automobile design. It is going to take a lot of changes, some big and some small, over a long period of time, to address carbon emissions. If we don't start _now_ making small changes that will bear fruit in 10 years we are going to have a really hard time of it when the day comes.

And the US automakers are clearly trapped in a prisoners' dilemma situation when it comes to fuel economy. Intervention by an outside party is absolutely required to allow them to move in the correct direction, and CAFE is one such intervention.

Cranky

Posted by Cranky Observer | August 10, 2007 9:55 AM

Ok, we can sympathize with Dingell's predicament all we want. He's playing his assigned role in the drama. That's fine, as long as the CAFE standards do get raised.

The question I have is: why is this so bad for the automakers? They are all going to have the same CAFE standards, so its not like some of them will have an unfair advantage. Is it because it means cars will be more expensive, and therefore fewer will be sold? Or, is it because it gives an advantage to foreign automakers who specialize more in the fuel-efficient segment of the market?

Posted by Jim W | August 10, 2007 9:56 AM

We're going to see a couple decades of dwindling energy supplies, collapsing economies and serious disagreements and fighting between various nations and parties over all of it. Water levels will rise, populations will be displaced and tensions will abound. Then it's going to be capped off by the U.S. nuking China and a couple other nations in a paroxysm of rage over being subservient to the whims of brown and yellow people that don't know their proper place in the world. Why bother with emission policies? We can't change the situation fast enough to avoid all the above anyway. It'd be like trying to stop a glacier. Oops, bad analogy. We are stopping glaciers if melting them counts.

Posted by steve duncan | August 10, 2007 9:59 AM

> The question I have is: why is this so bad
> for the automakers? They are all going to
> have the same CAFE standards, so its not
> like some of them will have an unfair advantage.

Somewhat contradicting my own post above: It is bad for the _US_ automakers because they are trapped in a Sergio Leone standoff with their own customers. Those who have stayed loyal to Chevy, Buick, Chrysler, Ford, etc want big big cars with big big engines and soft mushy ride. Until gas prices spike up; then they run out and buy Toyotas for a few years. But (a) they don't buy small cars from US manufacturers[*] (b) when gas prices come down (relatively) and they go back to their old friends the US mfgs they refuse to buy any fuel-efficient models introduced during the spike and demand the big big engines.

So the US manufacturers are stuck not only in a prisoners' dilemma with each other but with their own customers as well. I do sympathize with them on that.

Cranky

[*] The utter failure of the US industry to build a decent small car since the 1962 Falcon does factor into to this. I remember a friend of mine predicting that Saturn would be gutted the day after Roger Smith retired; he was correct. And the US companies are now repeating this cycle with their failure to get into the market against the Prius.

Posted by Cranky Observer | August 10, 2007 10:06 AM

Environmental leaders have concluded that it's impossible, in the short term, to pass legislation adequate to the scale of the problem.

There's a logical problem here, in that if Dingell's carbon taxes really were adequate to the scale of the problem, they would be even more costly to automakers, who would face consumer pressure to redesign their automobiles way stronger than that offered by CAFE standards.

Posted by Consumatopia | August 10, 2007 10:21 AM

Imagine a law limiting all California vehicles to 10,000 miles a year. People in Michigan could argue - it's an important step to improve the environment; it would be better for Californians in the long run; the Japanase seem to do it easily; Californians should be smart enough to figure out how to live closer together, etc.

California would naturally say the short-term pain is too much and we like the way things are even though we know it's not that great and it can't last.

Posted by apm | August 10, 2007 10:28 AM

I disagree. This seems more of a "if we're not going to do everything, then we shouldn't do anything" approach that I refuse to buy into.

In fact, it is indistinguishable from Schumer's refusal to go along with a change in tax treatment of hedge funds unless other industries were also subject to higher taxes. Schumer didn't want his constituent industry singled out in the same way Dingell doesn't want his own constituent industry singled out.

You were right the first time.

Posted by Dungheap | August 10, 2007 10:29 AM

Dear Dungheap,

We have representatives with particular constituents so that they can say "Don't gang up on my constituent industry and protect your own." That's the ever-lovin' point. Sometimes some of them will lose, but Dingell is doing his job in a representative democracy and taking a reasonable position, which I think is Matt's ever-lovin' point.

Love, James Madison

Posted by You Can Call Me Al | August 10, 2007 10:39 AM

I think a lot of this hinges on who Dingell's "constituents" are and what Dingell's role in Congress is --

Dingell's real constituents, the local voters, are collateral benefactors of his position at best. The real motivators here are the big American auto corps, their owners, and their cash.

Think about the Detroit area congressional delegation for a minute and this becomes clear. Is Dingell the only congressperson with a lot of auto workers in his district? Not by a long shot. Yet those others don't seem to put up the same fights as Dingell. What's special about his motivators?

Part of what feeds into this and makes it more confusing is that the reason Dingell is in the american auto industry's pocket is tied to his seniority and chairmanship of the critical energy committee. Dingell isn't just one of many congresspeople, facing a set of conflicting pressures and log-rolling his way to the best outcome he can manage. He is in charge of the ENERGY Committee. He is the gatekeeper for these policies, and as such has more power on legislation like CAFE than do Senators, presidential candidates or others. If he were just cheering from the sidelines on the american auto industry's behalf, it would be annoying but understandabel. But he is the person running the show -- and won't be leaving that position as long as he is healthy.

Unsubstantiated gossip side note to end with: I had a friend who staffed for Dingell back in the 80s. When "Roger & Me" came out, take a guess at who received the only invite to watch this movie with Roger Smith at a private 2-person screening? Oh, to have been a fly on the wall as Smith & Dingell mocked the auto workers on display...

Posted by anotherAnon | August 10, 2007 10:43 AM

another Anon -

Sen. Levin has been extremely active in the Senate on the CAFE issue with Stabenow's strong support. As far as I know, the other MI house members have as well, but simply don't have the platform/power that Dingell does, and so you don't hear what they say.

CAFE, as earlier noted, is not a particularly effective regulatory lever if you are looking for reduction of fuel consumption results (fleet wide fuel economy levels, which themselves are a combination of what carmakers sell and what people end up buying) do track gas prices, so fuel economy skyrocketed in the late 70s when CAFE was first intro'd (indeed, demand for fuel economy was so high that the new CAFE standards were irrelevant), and then flatlined in the 90s when gas was less than a dollar (because of demand, american carmakers struggled to even meet the 27.5 car standard then).

CAFE is nevertheless very attractive to politicians bc the costs are not at all transparent since they are passed through the carmakers to the consumers. It seems, then, at first blush to be a painless solution. it is not, though. even for the toyotas of the world (who are trying to get into the big truck business as well because that is where the money is)

As mentioned many times here, the american car makers are in a bind bc they have to sell the cars and trucks that people want to buy. you can fault them, for sure, for grabbing the golden egg of big cars and trucks/suvs, and letting their small car fleet stagnate, but on the other hand, that decision kept those companies in business in the 80s and 90s. Dingell's trying to change the demand side, and do it in a comprehensive way that might really change the game and spread the costs more evenly. his might not be the best answer, but it is a step in the right direction - comprehensiveness.

Posted by Luke | August 10, 2007 11:11 AM

Well, actually, no.

The car companies have basically written the "safety laws" that make it so hard to import small cars from abroad.

Let's go over that one more time, slowly- the car companies are the biggest influence making government regulation stronger than the marketplace. They have made it impossible for the market to drive the solution. So we need to turn to more regulation.

Secondly, the car companies could increase sales of the fuel efficient models they have supplied. A '91 Geo Metro with the small engine and the 5-speed transmission gets an honest 45 mpg and has excellent collision protection. With gas prices going up ten cents a week, there is no doubt in my mind that Detroit could sell as many of these cars as they could import if they wanted to.

There's no rocket science here. Give up some acceleration by putting in a small engine and your gas mileage improves. My personal "CAFE" in the 60s was 32-35 mpg driving ten year old cars that carried four people.

Most people don't even want to drive that fast- they're just afraid of being run down if they don't. In my county we have a county road that roughly parallels a state highway and during the day it is clogged with people who don't want to drive ten miles over the limit on the state highway.

The auto companies wrote the "safety" regulations that tell us which cars we can buy. It's time for Congress to do some heavy lifting for the good of the country.

Posted by serial catowner | August 10, 2007 11:15 AM

It seems to me that a gas tax really is the way to go. CAFE standards take way to long to have an affect on the amount of gasoline the country consumes.

With a gas tax, everyone who has a car, new or old, will bear some of the cost and some of the personal responsibility for reducing consumption.

Some people will drive less, or combine trips to the market, etc. Some people will start riding buses to work, or riding a bike.

CAFE can have the peculiar effect of increasing the number of cars sold and increasing the number of miles driven, both of which are undesirable. It can increase the number of vehicles sold, since it is a fleet average. So, a manufacturer might have to sell many many more high mileage vehicles by selling them for less than their cost of manufacture. Then, the low mileage vehicles have their prices raised or profits lowered accordingly. Since many more high mileage vehicles would be dumped on the market, they will be driven by someone somewhere. This was the conditions during the 1990s when SUVs were extremely popular.

Of course, gasoline prices are way up in the 21st century, so the demand is up for small vehicles anyway.

Basically, if energy consumption and CO2 are important, then raise energy taxes. Cut taxes elsewhere to make it revenue neutral. If you want to help the low population density farm states that would be hurt the most by gas taxes, then increase farm subsidies.

Posted by stm177 | August 10, 2007 11:20 AM

> Well, actually, no.
>
> The car companies have basically written the
> "safety laws" that make it so hard to import small
> cars from abroad.

You appear to have missed the years 1965-2005 in the United States. Hundyi, Kia, etc are now into their third generation and are pushing the dominant Japanese (owned, although many are build in the US) small cars out of the market. The US mfgrs are nowhere to be seen.

> With gas prices going up ten cents a week,
> there is no doubt in my mind that Detroit could
> sell as many of these cars as they could import
> if they wanted to.

Having lived among the Midwestern rock-core of Detroit's customer base my entire life, there is no doubt in my mind that it isn't this simple. Yes, Detroit is addicted to the 40% gross margin on large obsolete truck chassis-based SUVs. But their customers _prefer_ such vehicles and go back to them every time gas prices drop 20% (despite the fact that that 20% drop is part of a sawing-upward process in real terms). Just as with living preferences we can argue whether those preferences are being induced by various marketing machines, but you are welcome to come to a neighborhood picnic and explain to the people who live here how they really only need "Frenchified Japanese toy cars with no guts and no air conditioning". Because that is how cars such as you describe are classified by Detroit's core customers.

Cranky

Posted by Cranky Observer | August 10, 2007 11:24 AM

> do track gas prices, so fuel economy skyrocketed
> in the late 70s when CAFE was first intro'd
> (indeed, demand for fuel economy was so high that
> the new CAFE standards were irrelevant), and then
> flatlined in the 90s when gas was less than a
> dollar (because of demand, american carmakers
> struggled to even meet the 27.5 car standard
> then).

IMHO you have to go back to 1984 when the Greens took some seats in the German Parliament and started talking about serious environmental regulations including - *gasp* - speed limits. Overnight the conservative factions joined together and put the US EPA emissions regulations into effect.

Now the German automakers had been arguing since the first (US) Clean Air Act (1971 IIRC) that is was impossible - physically impossible - to meet the US EPA regulations with their wonderful high-performance cars. As a result they never exported their highest performing versions to the US during that time period. So what happened in 1985? All the German manufacturers introduced one or more high-performance models that met the German/US EPA emissions standards. As they all do today.

How long does it take to develop a new drivetrain? 5-10 years. So no later than 1979 all the German manufacturers had a program underway to meet the upcoming US EPA requirements, and they all knew that it could be done without harming performance (as the Japanese already knew, improving fuel economy very often _improves_ performance). Yet whilst knowing this they were still testifying before both the German parliament and the US Congress that it couldn't be done. Waa waaa waaah.

This is why the kick-in-the-pants approach is one of the tools we need to use.

Cranky

Posted by Cranky Observer | August 10, 2007 11:34 AM

European and American safety standards are somewhat different, but that is not some kind of conspiracy.
It's not that one standard is somehow better; they just reflect the differences in US and European policy. In fact, since many carmakers like GM and Ford try to share underbodies, powertrains, and other parts, automakers in general would like to have one set of trans-national standards.

Posted by stm177 | August 10, 2007 11:48 AM

agreed that there is merit to a kick-in-the-pants approach wholeheartedly. but that kick should be 1) based on real analysis of technological capability and a realistic assessment of demand in relation to the escalation of the standards (i am firmly convinced that the feinsteins and meehan's of the world pull their fleet average numbers completely out of their asses); and 2) should be joined with other measures to affect demand (a la dingell's attempt at a comprehensive approach).

i think laying it all on the autos with the single lever of CAFE is counterproductive, ultimately

Posted by Luke | August 10, 2007 11:50 AM

CAFE standards may not be "optimal" from a detached policy perspective, but they are realistic. They actually work. American car companies have a number of problems, but CAFE standards barely crack the list. They have serious problems with legacy costs that their competitors don't have to deal with, due to the retrograde nature of the U.S. health care "system." More importantly, though, their vehicles are shit that no one in their right mind would want to buy! I have a 2002 Ford Focus that has had its brake rotors wear out three times in less than 70,000 miles. It has been plagued with alignment problems and the air conditioner routinely leaks water onto the passenger side. None of these problems have been covered by warranty, even though I have the extended service plan. The local dealer wants $1600 to fix the water leak, a problem that other dealers conveniently failed to diagnose while it would have still been under warranty. My next vehicle is going to be a Honda Civic Hybrid, and I am never buying another U.S. car in my lifetime.

So I have zero sympathy for Dingell. Tell the U.S. auto companies to start making decent cars and stand behind their products, and stop whining about government regulation. The Japanese companies chose to hire good engineers and build cars people actually wanted to buy. The U.S. companies chose to bitch.

Posted by Josh G. | August 10, 2007 11:58 AM

look - i know that is a convenient narrative (all american cars suck), but the reality is - and i challenge you to find an actual consumer reports type thing that disagrees - the americans make far better trucks (much higher quality and performance) and better SUVs as well. these trucks and SUVs are also, for the most part, fuel economy leaders in those segments. the importers make far better small cars, and better mid-size cars as well. the relative cafe averages reflect these strengths

americans put their money into the bigger models that sold well and made money, and neglected the smaller cars. that is fair. not fair to say they "suck" as a general rule

Posted by Luke | August 10, 2007 12:15 PM

should read at end - "that is fair to accuse them on"

Posted by Luke | August 10, 2007 12:16 PM

I'm at a loss, really, to understand the hardship that CAFE standards impose on car companies. The technology for improved fuel efficiency is available - in fact, it has long been available. But rather than turn that technology into improving gas mileage, the automakers (due to the lax CAFE standards) have chosen to convert that technology into making more powerful car engines.

If CAFE mandates are applied industry wide, I fail to see how it imposes an additional cost on car companies (at least one that isn't borne by the consumer).

Posted by 3pointshooter | August 10, 2007 12:48 PM

Welcome to the data free zone--all hypothesis and idle speculation are welcome here!

Try these:

Amory Lovins in The Economist:
http://www.rmi.org/images/PDFs/Energy/E06-08_GettingOffOil_World2007.pdf

"if 2025’s cars and light trucks were onlyas
efficient as 2005’s popular hybrids, they’d
save a sixth of forecast oil use, or two
Persian Gulfs’ worth."
http://www.rmi.org/images/PDFs/Energy/E05-02_EndOilDepend.pdf

Matt, you're a smart guy. Why do you say such short-sighted things sometimes?

Posted by vorkosigan1 | August 10, 2007 1:31 PM

> I'm at a loss, really, to understand the
> hardship that CAFE standards impose on car
> companies.

See the discussion above. Increasing CAFE will start to put the non-US manufacturers on an equal footing with Detroit on Detroit's home (and most profitable) ground (pickup trucks, large SUVs, and large family sedans). Toyota is already on their 3rd generation pickup truck; if GM and Ford have to compete with Toyota in that segment on fuel economy they are in big trouble.

All that said I agree with your basic premise: this is a bunch of whining by the US mfgrs and in fact it is an exact replay of the cultural issues that have put them where they are. Brock Yates described in his 1984 book what these cultural issues were and how they would eventually kill Detroit; I don't think anything in that book has proven wrong.

Cranky

Posted by Cranky Observer | August 10, 2007 1:39 PM

What's this, Mr. Yglesias agrees with his favorite columnist Charles Krauthammer that CAFE standards are no good. What should be done is to apply some CAFE standards (not necessarily the same as passenger car standards) to light trucks and SUVs.

Posted by SLC | August 10, 2007 1:59 PM

It is worth to note that Ford and GM have European divisions that operate, rather successfully, in a market where gasoline is ca. $6/gal. So they have a different mix of products there. It should not take 10 years to bring their own designs to this continent.

I see two problems. One is that small cars, as a breed, died out totally in USA. What is called subcompact is much larger that the models sold under the same name 15 years ago. To explain people that it is fun, hip and whatnot to drive minute cars would take a huge marketing effort. It took billions of dollars to convince American public that SUVs are safer, more fun to drive etc. This marketing effort would have to be undone, and federal government could perhaps help.

Second problem is that small diesel engines and manual transmissions are popular in Europe, and both increase the car mileage. I think transmissions are a solved technological problem, but the reliability of the cutting edge automatic transmission was not so good, the last time I read about. Diesels are also discouraged by the current regulations.

By the way, does Dingell propose reasonable alternative, like "do not impose CAFE, increase gasoline tax by $2/gal instead"? And what is a dinosaur doing at Energy committee? Who elected him to be a chairman? With all due respect, energy problems are not what they were in the past, and not all octogenarians are very good in absorbing new ideas.

Posted by piotr | August 10, 2007 2:02 PM

Re: the greens really are for big environmental change --- shutting down coal and atomic power in germany

Except they may make things worse not better: Shut down coal-burning plants to combat global warming-- yes, that makes sense. But nuclear plants: no, that just makes the problem worse.
The German Greens seem to be off in La-La Land on any number of issues. Give me the sensible French any day, who have converted a large fraction of their electricity generation to nuclear plants. Yes, I know, nukes have problems too, but they are whole orders of magnitude smaller, and no, nukes are not the total answer. But they don't produce CO2 or other greenhouse gases and that buys us time which is what we need most right now.

Re: The utter failure of the US industry to build a decent small car since the 1962 Falcon does factor into to this.

Define "decent small car". I bought a Pontiac Sunbird back in 1992. Great car; had no complaints with it at all.

Re: Then, the low mileage vehicles have their prices raised or profits lowered accordingly.

And this is problem why? Seems to me we would want low-milegae vehicles to be less affordable

Re: Since many more high mileage vehicles would be dumped on the market, they will be driven by someone somewhere.

Again, where's the problem? Higher-mileage vehicles=lower CO2 emissions.

Posted by JonF | August 10, 2007 2:19 PM

> Second problem is that small diesel engines
> and manual transmissions are popular in Europe,
> and both increase the car mileage. I think
> transmissions are a solved technological problem,

For the average driver in an average US traffic mix modern automatic transmissions have better average fuel economy than manuals and do much better with emissions (you get a big burst of emissions during the clutch cycle and the autos are better at that). I prefer manual myself because it is more fun, but the problems with automatics from the 1960s and 70s have been fixed.

Cranky

Posted by Cranky Observer | August 10, 2007 2:20 PM

Yglesias is right to the extent that one’s logical focus is limited to the little syllogism he’s described regarding risk and political action, but the argument rings pretty hollow. Ultimately, CAFÉ standards are one of the easiest, most painless ways to reduce both carbon emissions and dependence on oil. Does this single out a particular industry and its employees who happen to live in Dingell’s district? Yes. Does it mean that this is unfair? No. Dingell has spent his career protecting auto companies from comparatively easy-to-meet increases in fuel efficiency standards. The entire time, car makers argued that such efficiency increases would place a crippling burden on their ability to compete. Meanwhile, as average MPG for fleets remained flat, the average horsepower of every automaker’s fleet has increased dramatically. So automakers actually HAVE been making their cars more efficient, but instead of using that efficiency to reduce the amount of gas required, they’ve used the efficiency to ramp up engine power to ridiculous and highly unnecessary levels. This is all to say that if someone spends his entire life in congress making disingenuous arguments about the burdens CAFÉ standards place the auto industry, it’s hard to feel that this person is being unfairly singled out once carbon emission discussions get serious.

The fact of the matter is that CAFÉ standards should be much higher than they are now, and the only reason they aren’t is because of the effectiveness of the auto lobby. There’s a difference between picking on a particular industry because it’s the easiest way to pass the buck, and picking on a particular industry because, frankly, that industry needs to get picked on. In this case both are true, but it doesn’t mean that Dingell, or the automakers, are shouldering an undue burden here. Dingell’s argument that either we’re all going to make sacrifices, or none of us are going to make sacrifices is based on the central fallacy promoted by the auto and energy industries that everyone should be asked to sacrifice in equal measure on global warming policy. Heroic feats of collective political courageousness are not required for incremental progress on this issue—it’s just a slight-of-hand trick that Yglesias has unfortunately bought into.

Posted by Z-man | August 10, 2007 2:29 PM

Cranky's right on the cultural issues. Americans have long loved muscle cars; when fuel economy regulations made the format economically unviable, manufacturers just changed chassis and started building muscle trucks, thus fueling the rise of SUVs and pickup trucks owned by people who never need to pick anything up.

The issue is just that the only way fuel standards are going to accomplish anything is by rendering the cheap muscle vehicle of any type unviable. The issue being that there's a huge constituency in Michigan for making cheap muscle vehicles, and there's a pretty big constituency everywhere else for buying them. Those buyers aren't going to start switching preference to Geo Metros anytime soon, but maybe they could be persuaded to head towards sporty coupes, which would be a pretty respectable fuel savings on its own.

Posted by Senescent | August 10, 2007 2:39 PM

Re gas taxes

It would seem more effective and fair if a displacement tax on automobile engines were imposed instead of higher gas taxes. The tax could escalate with increasing displacement. This would also provide an incentive for hybrid cars which have smaller gasoline engines. As a for instance, consider the following proposed tax profile (all displcements given in ccs).

1000-2000 $100/year
2001-3000 $300/year
2001-4000 $500/year
4001-5000 $1000/year
5001-6000 $2000/year

Posted by SLC | August 10, 2007 2:53 PM

I dunno, I think a direct fee like that would hit too close to home to be politically sustainable. I remember Schwarzenegger absolutely crucifying Davis over like what, a $200/yr licence fee?

Posted by Senescent | August 10, 2007 3:07 PM

Well, it's a funny thing about Americans and their love of muscle cars. There's a lot of guys around here with sleeveless t-shirts, tattoos, and old ladies to match, and a lot of Geos. I mean, really a lot.

Because there's a lot of miles between us out here, not so much money, and gas prices go nowhere but up.

In the more prosperous regions, people buy what they're told to buy. Auto companies don't blanket the airwaves with advertising because, who knows it just might work. They do it because they already know for a fact it works like a charm.

If the car companies had stiff incentives, like a CAFE act with teeth, or real competition, like letting anyone import anything, the way we do with flat-pack tractors these days, they would figure out a way to sell us the same cars they sell in Germany and Italy. So fast it would make your head spin.

Posted by serial catowner | August 10, 2007 3:13 PM

It's hard to have sympathy for the auto companies who haven't made the best use of the last 30 years and whose cries of wolf! are getting old. However, there is something unfair in how we pave, air condition, and ship fresh water to swamps and deserts and then tell Detroit to work harder for less money so we can keep on doing it.

Posted by apm | August 10, 2007 3:23 PM

Awesome post, Matt.

Raising CAFE standards has never reduced our carbon emissions and won't now. If cars are more fuel efficient, Americans will just drive more.

While fuel efficiency is one part of an overall plan to fight global warming, it is completely useless on it's own.

We see this kind of BS a lot in politics, where they seek to get the low-hanging fruit in hopes it will make a dent in the problem. Going after employers to stop illegal immigration but doing nothing else is the same thing. We all support cracking down on employment, but when we get into deportation and cutting off social services, all of a sudden we go soft. We just hope that lack of employment will stem the tide. But it just won't happen.

Any difficult problem has to have a solution that covers all the bases. Tackling global warming or any other issue with just one big plank accomplishes nothing and makes life miserable for the one target(in this case, the auto industry).

Posted by Adam Herman | August 10, 2007 4:50 PM

Re: If cars are more fuel efficient, Americans will just drive more.

Are you sure about that? I sure wouldn't drive more. I can't driving around on our crowded, congested roads and the less time I spend in the car the better (I don't mind open country, long road trip driving though)

Re: We just hope that lack of employment will stem the tide. But it just won't happen.

While I doubt we could crack down on employment enough to make difference, if we did I suspect it would indeed stem the tide. That's mainly what people from Mexico are coming here for is jobs.

Posted by JonF | August 10, 2007 10:38 PM