By Allen Penticoff
President Barack Obama recently announced there were agreements made (not at all unanimously) with automakers to target Corporate Average Fuel Economy standards (CAFE) to be 54 miles per gallon for 2017-2025. That sounds great, until you dig a bit deeper — more like scratch the surface.
First of all, the White House quickly caved in from its original goal of 62 mpg. Or, perhaps, it was a first high bid, knowing the counter would be lower. The proposed legislation won’t be finalized until 2013, and there is plenty of wiggle room for the manufacturers and Congress to change things along the way.
A CAFE 54 mpg is a window-sticker 40 mpg. That’s not bad, considering that CAFE standard is now 35 mpg for 2012 through 2016. Light trucks will be affected by 2011 standards, saving a bit of fuel for pickup and SUV users — but still a long way from having truly great fuel economy. The proposed 54 mpg CAFE standard will have exceptions for vehicles more than 6,000 pounds — that’s all those trucks and SUVs. Many critics predict consumers will not flock to the new, higher-mileage vehicles, but will be enticed by the manufacturers to buy these bigger vehicles to circumvent the mileage mandates — as they have in the past.
Other critics complain the government cannot control the consumer market via regulations. On one hand, I agree; on the other, the public is being rather slow to move in the right direction. I’ll take a quick look at both sides of this coin.
Most of the rest of the world has higher CAFE-like standards than we are proposing. In the real world of highly-taxed fuels, people want and do drive more fuel-efficient vehicles, or forgo driving at all. American politics is incapable of passing legislation that would tax fossil fuels at a level that would discourage citizens from abandoning their large vehicles. So, we continue to buy them, as long as we can foot the bill, even while we cut the economy short by no longer making other purchases because we can’t afford them.
Enter regulating the nature of the machinery itself. CAFE standards have always been hotly debated and resisted, and ignored for a couple of decades. During those ignored years, vehicles did become more fuel-efficient, but only when the price of gasoline arrived at $4 per gallon did you start seeing fuel economy as a part of regular advertising.
Since CAFE is a government mandate, our politicians line up to give GM, Ford and Chrysler plenty of millions of our tax dollars to conduct research and development. Few other industries get this kind of handout. Volkswagen is complaining that the CAFE standards favor the big three automakers and do nothing to encourage implementation of clean diesel — something VW and other European automakers have been doing for years already. VW cites its American-made Passat TDI as obtaining 45 mpg on clean diesel already and that such technology would save drivers billions in fuel cost and drastically reduce imports.
Constant media pleadings (including self) imploring auto buyers to “go green” go unheeded. In fact, there is little to choose from that is both green and affordable (I know, I’ve been shopping). Today’s hybrids are rather pricey vehicles, and many of them do not get all that impressive of fuel economy. We want our big cars, and we want to feel green, too. I do see a lot of Priuses about, and I want to thank everyone who drives one — this is where the rest of the auto-building and auto-buying state should be. I do notice that people on the senior side of life are usually the drivers of Priuses — no need for speed or flash, just get me where I need to go efficiently.
I would rather see government tax fuel at much higher rates than we presently do and lower other taxes in a swap, so the net cost to us is about the same. Such moves encourage consumers to buy more efficient vehicles — that encourages competition to make them — without the need for subsidies. I’d have a weight tax on vehicles as well — people driving pickup trucks and large SUVs should have a good reason for doing so and be willing to pay for it on top of fuel cost. More encouragement to drive moderately-sized vehicles is needed. These are not regressive taxes — it’s up to you entirely how much you pay in taxes with the way you choose to consume. Free your income from taxes — we want you to earn more. We need you to use less fuel, for the sake of the economy and the planet.
From the Sept. 7-13, 2011, issue