Motor Trend jumps on the demand side of the fuel efficiency push
I fully agree that we need more fuel efficient vehicles. But I also firmly believe that the vast majority of American drivers (and others around the world) will always buy the biggest, most powerful vehicle they think they can afford to operate. When gas was cheap in this country, they bought big SUVs and trucks because they could afford them, even though there were plenty of small, efficient vehicles offered. Sure, some people bought compacts for a variety of reasons but most people went big. What caused that trend to turn around seemingly overnight? Certainly not anything that politicians and bureaucrats did with fuel economy regulations. Plain and simple, it was that gas prices shot up.
Gore Vidal has dubbed this country the United States of Amnesia because consumers have a notoriously short memory. Raising CAFE standards will not help reduce fuel consumption unless people are willing to buy more efficient vehicles and that's something that is unlikely to happen if fuel prices drop (unless of course our economy continues its collapse, in which case nobody will be buying anything). Over at Motor Trend, editor Angus McKenzie thinks that CAFE combined with low fuel prices has actually made things worse by encouraging automakers (including Toyota and Nissan and to a lesser degree Honda) to build big trucks and consumers to buy them. Instead, he suggests attacking the demand side (as I have done for years) by scrapping the plans for $100 billion in loans to the industry along with the current supply-based CAFE rules. McKenzie says the money should be used to stimulate demand for high efficiency vehicles. McKenzie doesn't mention fuel prices, but I would add that attempts to reduce fuel prices much below $4 / gallon should also be abandoned. As Dr. David Cole has said, a floor price should be set for petroleum to keep demand up for efficiency and then if the market price drops below that, tax it up to the minimum price. This will do a lot more to reduce fuel consumption than the ridiculous footprint-based fuel economy rules now being put forward by NHTSA.
[Source: Motor Trend]
Reader Comments (Page 1 of 2)
Jacob 9:31PM (9/21/2008)
While I don't like paying $4 for a gallon of gas, I agree that people won't buy fuel efficient cars if prices drop much lower.
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Demosthenes 9:58PM (9/21/2008)
I agree that lower fuel prices will affect high mileage vehicle sales but I disagree that taxing fuel to meet a stated minimum is the right method to combat this. Retailers and distributors will simply increase prices to reach that four dollar amount (or what ever price is set). Sure it will keep the price high but the extra amount will line the pockets of distributors and retailers rather than be invested in alternative fuels and high mileage vehicles.
I would much rather have a graduated tax on vehicles under a certain mpg (higher tax the lower the mileage) and use that money to fund alternative fuel programs and tax credits for high mileage vehicles.
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JDred 10:13PM (9/21/2008)
All I can say to them is,
ARE YOU OUT OF YOUR FREAKING MIND!!!?!
I have a hard enough time with high gas prices taking a bigger chunk out of my budget and that is with a scooter and two cars that get 30+mpg.
People didn't primarily buy SUVs and trucks primarily because gas was cheap, they bought them for the same reasons that everyone has to have the latest cell phone or any other consumer gadget. It's a status symbol, nothing more.
Sorry but if I want Social engineering and all the other failed Socialist ideals, I'll move to Europe. How about M/T focus the contents of their magazine to cars that real people drive instead of the gushing over Luxury and Exotics that suck enough gas to make a Hummer blush.
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Woodenbee 11:43PM (9/21/2008)
well social engineering has worked fantastically well in the US for Decades, since the 50's suckers have been brainwashed to buy the latest year model car, because it had the latest body style etc, and it continues today, I agree with you on that, and trying to remedy that wrong with sound public policy is nothing at all to do with socialism, it's what government is supposed to do, but is constantly hobbled by strange creatures such as yourself, I think we would all be a lot better off if there was one car, one engine and one government agency overseeing it all, making sure it matched our energy policy, but since we have energy/transportation policy that is written by the US automakers gleefully supported by the oil companies and their respective marketing machines we have the current madness of giving away our countries wealth to our enemies to subsidize an energy source that is killing our planet, how you managed to correlate that with some pinko fear mongering from your distant past is the least baffling of your arguments
dhofmann 10:33PM (9/21/2008)
Rather than a price floor which would basically give free money to any oil company that could otherwise sell gasoline for less, how about a revenue-neutral carbon tax? If the average American uses 500 gallons of gas a year and the carbon tax is $1/gallon, then everyone would receive a $500 refund every year. People who don't drive, such as the poor, would have that much more money to spend on groceries, and the average American would have that extra $1/gallon incentive to reduce his or her consumption.
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Dave 10:48PM (9/21/2008)
According to this, the USA used 179,100,000,000 gallons of motor vehicle fuel in 2005.
http://www.infoplease.com/ipa/A0004727.html
IIRC, the annual federal budget is about 1.5 trillion dollars.
I say eliminate income taxes and raise federal fuel tax to $8+ per gallon.
We would simplify the tax code and encourage fuel efficiency in one fell swoop. (Of course, there would probably be tax credits for low income individuals for example)
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LaughingMan 10:05AM (9/22/2008)
You would need more than just tax credits for the poor.
While a gas tax like that would be commendable from the perspective of stimulating the market toward more fuel efficient cars, it's fundamentally a regressive tax.
That means that it hits the poor and the middle class much more than the rich.
If a middle class family that makes $50000 per year spends $1000 on gas, under your tax system, you'd tax them $1000, or 2%.
Compare that to an executive that makes $10 million per year. To tax that executive the same rate (2%), they'd need to spend $200000 on gas! Not even if they had 13 cars would they likely spend that much on gas.
So the fact is, if you eliminated the income tax and taxed a bunch out of gas or any commodity, the rich would simply not pay their fair share, yet the hurt would be put on the middle class, primarily.
It's not proportional. The rich wouldn't care as much as the middle or the poor if the price of gas doubled since their fuel costs are a significantly smaller percentage of their income.
Nick 11:18PM (9/21/2008)
A low gas price definitely will ruin the sale of electric cars, and necessary steps need to be taken.
Tax gas and tax gas guzzlers like they do in Europe. It's working, it's proven, so what are we waiting for?
Maybe it could reduce the $700 bn that are sent overseas each year and give that back to the people.
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Christian de Saint Preux 8:33AM (9/22/2008)
NO! It has been the primary downfall of our economy. People will simply drive even less that they are doing now. That means... Less fuel bought at retailers (going bankrupt every day), less tires changed, less brakes repaired and less things repaired. Lots of less things bought because people are NOT traveling certain places.
I mean.. Why would you keep the fuel price high if there is an alternative? I think that making the manufacturers emphasize in fuel efficiency is best, as they are doing now.
Tax cuts to more fuel efficient vehicles is the way to go. Why is everyone so FOND up of giving money to oil companies?
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Richard 1:35PM (9/22/2008)
I find your statement contradictory. Having high gas prices DOES promote efficiency. If your current car gets 15mpg and you switch to a car that gets 30mpg, you've cut your gas bill in half! Having lower gasoline prices only promotes bigger cars and trucks. It's the reason car makers don't sell a lot of efficient cars in the USA! Europe has so many models that average 40mpg or more. Some even get 60+mpg! They don't sell them here because of legislation that makes it hard for them to sell here. Of course most of that legislation protects the US automakers, and to much more a degree is now hurting them.
I say keep the price of gas high and let the market demand more efficient cars. Electric cars will flourish because of that as well.
Todd 8:43AM (9/22/2008)
"One car, one engine, and one government overseeing it all"....ah, those good old days of the size 9 black shoe, eh Woodenbee? How's Berkley these days?
Our country also has an obesity epidemic (outside of the Bay Area, I mean). Shall we apply the same social engineering and tax all food products? No wait! One food item! Which you could pick for us! (Oh, PLEASE pick Guiness, PLEASE...) Spewing pure Marxism then castigating others for "pinko fear mongering" doesn't do much for your lectur...I mean, arguement. Finally, the beautiful thing about marketing machines is you can simply choose to ignore them - it's called free will and I really don't need the government to do that for me. - another "Strange Creature" apparently.
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Woodenbee 4:00PM (9/22/2008)
Well taxing the foods that cause obesity would be a good idea, since they are the ones that cause our Health insurance rates to skyrocket, sodas and fast food are killing our kids, so when we finally get a health system that isn't for profit the corporate entities most culpable for the obesity epidemic should be taxed at a higher rate to compensate the rest of us for their negligence, I'm sure they can afford it, you cant blame kids for eating junk but you can sure blame the junk food companies for selling it in schools, I don't eat fast or sodas and guess what, I'm not obese, I wont even go into what agribusiness is doing to the soil and the environment with their pesticides and genetically modified frankenfoods.....
Andy 9:28AM (9/22/2008)
It's a rare treat to have this green car blog hijacked by the political science department......Handbags at dawn please ladies!
A fixed price for gas is a crazy idea. A well designed carbon tax wouldn't kill off America. The proportion of tax payed at each income level should remain balanced. The overall tax burden should not increase.
There would be a distribution of wealth .... From the less carbon efficient to the more carbon efficient. It would probably cause a bit of social re-alignment. But that should not be an objective of a carbon tax policy.
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Woodenbee 4:07PM (9/22/2008)
I like that "handbags at dawn", I couldn't make it way too early
Rick 12:06PM (9/22/2008)
So to get people to buy more fuel effecient cars, we should force the recession into becoming a permant economic crisis? WTF!?
Someone neglects to use any wisdom and fails to realize the majority of the US population CANNOT AFFORD $4 GAS!!!! So, then, how the FRACK can these same people, AFFORD A BRAND NEW FUEL EFFECIENT CAR?!!?!?!?
Dumb, dumb, retarded, shortsighted, ah forgive me....
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Paoli 12:04PM (9/22/2008)
People also own larger vehicles because they are surrounded by large vehicles on the road. Drive defensively - drive a tank.
Get the 18-wheelers off the interstate and thier freight back on the rails where I would certainly expect central-planning advocates to think it belongs, then talk to me about considering something less defensive. I care a great deal less about chairman mao's 5-year plan to put me in a committee designed suicide box than I care about the safety of my peeps.
What other features will the chairman instruct his committee minions to design in? A speech processor to detect and incinerate any persons considering the possibility that global warming is more popular delusion than science? Does no one remember the all too recent furor over "The Coming Ice Age"? Does no one recognize the eerily similar tone of today's tulip craze?
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meme 12:57PM (9/22/2008)
"the all too recent furor over The Coming Ice Age"
Myth. Between 1965 and 1979, there were 7 peer-reviewed articles predicting cooling, 44 predicting warming, and 20 that were neutral. And this was back when climate science was in a far more primative state.
http://ams.confex.com/ams/pdfpapers/131047.pdf
S. Baker 11:38AM (9/22/2008)
You mean amnesia about how my relative had his head chopped off because he was a westerner by Imperial Japanese thugs? Or the fact that ECO-NUTS think they are saving the world by driving a car that uses less fuel (but still uses it) rather than taking public transportation or get involved in a vanpool? Please, the only car company that has a real game changer is GM with its Volt, no fuel, I repeat no fuel for 40 miles. If that is not a game changer then I do not know what is!
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Richard 1:36PM (9/22/2008)
The volt is the "only" game changer? How about bicycles? All the slow speed electric cars? How about the electric motorcycles? Tesla? How about converting a regular car to electric? Please elaborate on the "only" part.
gorr 12:06PM (9/22/2008)
What taxes collected serve? It serve the war on irak and it serve to give subzidies to the ones that burn foods before their eaten.
It give some spare change to make researchs that are never put in practice like hydrogen cars and it give assured jobs to mad scientist that say to raise the price of gasoline to save the air and they tell us that hydrogen is impossible. By increasing gas price and diesel all it do is that it's ruining everyone except state-employees.
It's consumers like me writing in this site that should drive what the market is going at. I want a car that cost next to nothing to fuel and a gazeous tank for natural gas and gazeous hydrogen, put in the trunk of my car with associated fitting should just add 1000$ to 1500$ and be available at mechanical-tuner-shops.
As for making h2 fuel at home, it shouldn't be a problem with water electrolysers that can enter the market like the ones from ITM compagny in england or any clever ones that can come from china or malasia.
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