CAFE and Unintended Consequences. Guess which law wins?
The Chicago Tribune's Steve Chapman writes that the new CAFE standards (35 miles per gallon by 2020 - about 12 short years away) won't do much good because folks like us will buy the more efficient vehicles and drive them more miles resulting in more congestion and fuel use. It is just our human nature to behave that way. The result will be little net reduction in the number that really counts - our gross use of non-renewable carbon-based fuel. Self defeating. Mr. Chapman prefers the ever unpopular Carbon Tax (CT) as the way to bite the bullet. With the CT, you are encouraged to both be more efficient AND use as little carbon as possible. Maybe that is not what you want to read but it is probably what Al Gore and the rest of us - all 6.6 billion of us - need.
I am beginning to agree. Carbon is carbon whether it comes from petroleum or coal or gas. Use carbon in excess and you damage the world for all of us. It is not a local phenomenon. Of course, if you don't use much carbon, by using renewable fuels or solar or wind or use a bike or telecommute, you won't pay very much CT. You can still get around. And if you don't get around by using electronics (telecommuting) but you use some carbon - as I am in writing this post - that will also include a CT. All in all, the effort to avoid paying CT will lead us to not only carbon efficient vehicles but to an overall carbon efficient way of life. (Note: For seven years, I drove 30,000 miles a year for my job in alternative fuels. That is 210,000 miles and 8,400 gallons of fuel - one full tanker truck just for me!)
There is still a problem. Advocating in Congress for a CT is political suicide right now. Remember however, that Washington was built on a drained swamp. When the Capital basement is flooded like New Orleans, I suspect the CT will be a whole lot more popular. Congress will even include a little extra in the CT. Why? To pay for pumping out their basement, of course.
[Source: The Week]
Reader Comments (Page 1 of 1)
mike 5:30PM (8/11/2007)
Not quite the deep economic analysis I'd hoped for.
This analysis assumes I have Infinite Time to burn that extra gas.
Whereas, in fact, most people today, esp. the working classes have schedules we need to meet.
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rgseidl 8:26PM (8/11/2007)
The more salient point is that a CT (e.g. higher fuel taxes in return for lower income/sales taxes) generates demand for better fuel economy *and* reduces fuel price volatility in response to gyrations in the price of oil.
CAFE constrains supply but with less attractive offerings, consumers may decide to hang on to their big old clunkers longer. In response, car makers will lobby politicians (read: make campaign contributions) to obtain loopholes (cp. E85 nonsense), defeating the whole point of the exercise. Unless you happen to be a politician, of course.
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Glenn Mercer 9:06PM (8/11/2007)
I completely agree that higher fuel tax is a better way to go than higher CAFE. That being said, I think the columnist makes two errors. First, there have been more than a few studies on VMT rebound (how much VMT, vehicle miles travelled goes up when fuel efficiency improves) and most find a 0.1 to 0.2 effect: improve MPG by 10%, driving goes up 1% to 2%. The one study he cited is one of many, as usual, and they do not all agree. Second, the effect can still be positive overall. If that pickup truck was getting 30 MPG (burning 500 gallons in a typical 15,000-mile year), then going to 35 MPG while adding 1,500 more miles is still positive: 16,500 / 35 is 0 gallons.
Raising CAFE is not the best way to go, but it can still do good.
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satan 10:20PM (8/11/2007)
****With the CT, you are encouraged to both be more efficient AND use as little carbon as possible. Maybe that is not what you want to read but it is probably what Al Gore and the rest of us - all 6.6 billion of us - need.****
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I couldn't agree more. When Al Gore puts his money where his mouth is, and his house starts using less than $30000 per year in electricity, I'll drive less and turn my second computer off when its not in use.
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Chris M 12:00AM (8/12/2007)
The assumption that improved fuel economy causes people to use even more fuel because they drive more is false. That notion came from the discovery that while fuel economy improved from the 1970s, fuel consumption doubled - but ignored in that analysis is that the number of cars and the number of drivers more than doubled! In other words, while total fuel consumption went up, average fuel consumption per driver went down, just what would be expected from improved fuel economy.
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Benson Leung 11:40AM (8/12/2007)
"I couldn't agree more. When Al Gore puts his money where his mouth is, and his house starts using less than $30000 per year in electricity, I'll drive less and turn my second computer off when its not in use."
Why? Why should Al Gore being a hypocrite affect how you live your lifestyle? You think it'll be sticking it to the man, in a profound act of spite if you ignore what the man has to say and needlessly waste your own money?
I don't have a $3000 a month electric bill, but for the size of my apartment, and my single lifestyle, it was very high. I took the time to check my electronics, and found quite a few places where I could save energy by powering equipment down all the way instead of letting it idle or sit in standby.
The net result for me was an electric bill that was cut in half. That's money in the bank for me, and probably for you too... but if spite is more important to you than a smaller utility bill, then meh.
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Dan 12:59PM (8/12/2007)
Advocating for a carbon tax in Washington is not quite political suicide, but this session it's certainly an uphill battle. Next session, after the election, should be a far more positive environment. There is increasingly a recognition that something has to be done about climate change and that the something should include "putting a price on carbon." With enough time to compare the relative merits of carbon taxes and cap-and-trade, a revenue-neutral carbon tax is going to start looking much more attractive.
Politically, a carbon tax does have that inconvenient “T” word. But, cap-and-trade really isn’t any better politically. Don’t forget, the idea of both a carbon tax and cap-and-trade is to put a price on carbon to reduce carbon emissions. Guess what happens when you put a price on carbon? Somebody has to pay. Where does the money go? With a revenue neutral carbon tax, such as that proposed by the Carbon Tax Center, www.carbontax.org, the revenues flow back to Americans through a reduction in payroll taxes or rebates. With a cap-and-trade system, the revenues go to polluters if the allowances/permits are allocated rather than auctioned and to all the lawyers, consultants, brokers and traders looking for a profit. My guess is that when cap-and-trade is closely examined, people are going to prefer the revenue neutral tax.
A carbon tax is far easier to administer than a cap-and-trade system. The carbon tax is administered by the existing tax system and should be relatively uncomplicated. A cap-and-trade system, by contrast, is far more difficult to implement and administer. Unfortunately, that complication means the benefits of putting a price on carbon will be delayed for many years. We don’t have time to waste. See the Carbon Tax Center’s paper comparing carbon taxes to cap-and-trade. And, please check out our web site and tell us what you think.
Please check out our web site and tell us whether you think we’re moving in the right direction.
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DCS 9:06PM (1/08/2009)
To anyone who believes that a CT can be exempt from the law of unintended consequences, take a look at the perpetual motion machine i have in the corner. If a CT is implemented in the US, remember than energy use pervades everything we do, not just whether or not we bike to work. Food and consumer goods all require energy to produce and transport. The first act of many industries after imposition of a Ct will be to move offshore to places where there is no CT. More Americans will lose their jobs and have more problems paying for the increased cost of what they use to live. If the marginal cost of drilling for oil increases, less will be produced and there will shortages. Remember gas lines in the 70s? Before blithely assuming that a so-called revenue neutral tax will bring a green utopia, look at some of the potential negative consequences.
miike-1-2-7 7:05AM (8/13/2007)
I agree with Benson on this one.
Simply switching 10 100 watt bulbs to the spiral fluorescent type,
and the highest efficiency refrigerator i could buy, caused me to get a visit from my local electric utility, checking my meter.
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Hans 10:18AM (8/13/2007)
In the CAFE v. gas tax debate, there is a pretty clear history of the effects of both. in the US, CAFE has resulted in extremely efficient technology applied to enormous SUVs; while in Europe and Japan, high fuel taxes have resulted in roomy small cars and good public transportation.
The other thing is that world oil prices are not determined in the market. They are set by Saudi Arabia and OPEC. SA prevents the price from going so high that the world economy is damaged, but still the price is higher than a market result. That excess price is more like a tax than a market price, and it is paid mostly to Saudi Arabis, Iran and Venezuela. Meanwhile, the US Navy protects oil shipping to the tune of $50 Billion a year. If the US taxed oil imports or carbon, that would put pressure on OPEC limit price increases or risk worldwide recession, which is also against their interests. Higher fuel taxes could replace the need for the various costly subsidies of alternate energy technologies, and encourage conservation. As Dan said above, higher fuel taxes could also be used to replace payroll taxes, which largely addresses the argument that they would be bad for the working poor. checkout www.carbontax.org
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motorman 11:25AM (8/13/2007)
remember the "libs" are a friend of the "poor people" so raising the gas tax will hurt them. since they do not pay income tax so they will not be able to get any rebates for the gas tax. remember when the libs were going to raise the gas tax $.50 a gallon to cut down on usage well the price has went up over a $1.00 a gallon since then and people use more now than ever.
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DRP 7:59PM (8/16/2007)
Detroit 3 and UAW further demise by fighting CAFE
http://dpatterson.blogspot.com/2007/08/detroit-3-and-uaw-further-demise-by.html
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