I'm thinking of term limits....

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As much as this news pi$$es me off, I'm inclined to think that at this point
a) people are sufficiently aware of the geo-political ramifications of burning lots of gas that we have to buy from middle eastern "allies" and
b) the price of gas is high enough EVEN in the USA

that even if CAFE were abolished people would continue to factor mileage into their purchase decisions.
Maybe that's just wishful thinking.

That being said, I'd like to see a record of political contributions to this goof-ball from automotive groups. Lobbyists are really getting out of control. I know publically funding elections would be complicated and piss off a lot of fiscal conservatives, but it would at least return the interests of the politicians to people, rather than organizations. Those interests overlap sometimes, but sometimes they don't. And the organizations you belong to don't necessarily think about all matters the way you do.

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GoodCheer: You are wrong about people. They may know that ramifications of their purchases but that does not prevent them from making them. They may also assume, well this is the best I can get and I will live with it.

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Killing off CAFE would be no bad thing if it were replaced by a substantial shift away from general sales tax and toward specific fuel taxes. Alas, that is not likely to happen.

The EU is currently going through CAFE-like contortions with its push for mandatory low fleet average CO2 emissions. Such hard regulation is effective in the short run but tends to be undermined by loopholes in the long run. In the US, especially lenient treatment of FFVs has undermined the spirit of CAFE to such an extent that it is now a mere shadow of its former self.

There is little doubt that in the long run, consistently high fuel taxes are an effective way to curb aggregate fuel consumption / CO2 emissions by the LDV fleet. Cars in Europe are generally smaller, lighter and equipped with manual transmissions and lower displacement engines delivering higher BMEP - i.e. the drivetrains are more efficient than those in the US. On top of that, despite several rounds of tightening, EU emissions standards are still lax enough to make diesels possible at reasonable cost.

By contrast, US politicians are loath to raise fuel taxes because of the voter ire that would arouse. Since US House of Representatives members are limited to ridiculously short two-year terms, they can ill afford to take the long view in any policy area, especially one as emotionally charged as personal mobility.

Historically, most European countries have maintained a differential tax advantage for diesel over gasoline. This appeared to make sense up to the 1980s when diesels were still used mostly for tractors and commercial vehicles and, the EU was still focused almost exclusively on farm interests and cross-border trade.

Since then, however, there has been a massive boom in diesel passenger LDVs. Ironically, this was actually kick-started by several years of wrangling over the pan-European introduction of three-way catalysts and the lead-free gasoline they require.

The European diesel boom has led to significant air quality problems in many city centers, reduced fuel tax revenue and until very recently, allowed the European auto industry to avoid getting serious about alternatives such as electric hybrids. New diesel emissions technologies such as DPFs and LNT/SCR systems will eventually clean up the air, but it takes time for the fleet to churn.

Meanwhile, European refineries are having trouble meeting diesel demand and need to export their inevitable surplus of gasoline. Fortunately for them, the US has few diesels LDVs and is chronically short on refining capacity because of rampant NIMBYism. Imported gasoline now accounts for roughly one in seven gallons consumed there.

There is a EU mechanism for harmonizing taxes and ultimately undoing this differential, but it requires the unanimous consent of all 27 member states. Unsurprisingly, it is a very slow process.

The lesson from all this is simple: if - big IF - the US ever decides to switch from CAFE to higher fuel taxes, it should continue to base its tax rates on energy content per gallon. Neither diesel nor E85 nor any other fuel should be given preferential treatment at the pump. If there are national energy security reasons for boosting domestic fuel sources over imports, that is a separate matter than can and should be addressed using separate policies.

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would like to suggest that the EUA promulgate a law based on the following:
Every American ethanol producer would be allowed to import the same amount of his production from the external market without taxes, as long as the participation of renewable fuel will increase, it could be twice as is now. The profit of this operation would enable the producer to enlarge the farmed area, since the other part of the investment would be covered by the profits of the imported ethanol. Thus, the net present value of the ethanol producers would be very higher.
The effects of a law like this in the domestic market will be of great importance:
- Creation of new employment positions, reducing the present unemployment taxes;
- The petroleum price would fall, leading to lower inflation rates and lower interest rates.
- With lower inflation, even the sub prime mortgage financial crisis could be benefited.
- The refining capacity for oil is limited and for the time being would not needed to be increased
But the effects of a law like this would not be restricted to the domestic market, giving place also to worldwide favorable consequences like:
- Reduction of the greenhouse effect, positive for the USA image
- Developing countries would also be benefited by the creation of more employment positions
- Worldwide reduction of the petroleum prices, leading to a decrease of the oil producers power and profits
- Reduction of terrorism acts, since there would be less financial resources to sponsor them.\
- According to the AMA's submission to the Biofuels Taskforce, there are three components of present vehicle emissions that have been shown to damage human health:
the particulates (particularly PM 2.5);
the aromatic component (polycyclic aromatic hydrocarbons); and
the gaseous irritants such as ozone (O3) and nitrous oxide (NO2).
- Giving the renewable fuel the same treatment in terms of taxes as for the Oil, will show to the world the USA concern to the environment.
Gilberto Jamardo
Sao Paulo/Brazil
egjamardo@uol.com.br

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