CAFE Standards and Rainbow-powered SUVs

17 05 2011

There are plenty of principled reasons to oppose regulation of private enterprise. Sometimes, however, one can set the intellectual arguments aside and simply point out the obvious: under our current political system, proposed regulations often have no basis in in the real world. Corporate Average Fuel Economy (CAFE) standards, which aim to continuously ratchet up the efficiency of our vehicles, ably demonstrate this divorce from reality.

I bring this up because a recent poll claims that 62% of Americans want to see CAFE standards increased to 60 miles per gallon by 2025 (that’s not quite double the mandated 35 mpg standard automakers must achieve by 2016). It’s almost impossible to get 62% of us to agree that the sky is blue, let alone support a controversial fuel economy proposal. So what is going on here?

Criticizing CAFE standards, or at least the principle behind them, is risky business. On the one hand, few are complaining that cars are, generally speaking, of a higher quality, safer, and more efficient today than they were, say, fifty years ago (styling critiques notwithstanding). On the other, nearly everyone wants more fuel efficient cars in the future–as long as that fuel efficiency doesn’t make cars smaller or more expensive. Trouble is, sales figures indicate that we  want cheap, relatively inefficient SUVs and pickup trucks now. What we want now and what we claim to want at some fuzzily-defined point in the future are two very different things.

In this respect, I guess I’m no different than the majority of the auto-buying public. I’d love to walk onto a dealer’s lot and pick up a 60 mpg luxury sedan that is built like an Abrams tank, does 0-60 in 2.5 seconds, handles beautifully, and costs less than $20k.

And you can park it anywhere!

But I don’t believe that I can use the power of government to legislate any of these features into existence. I don’t think the legislators who create fuel economy standards believe it either; in any event, they don’t seem too concerned with checking their standards against reality before passing the laws. After all, it’s all on the automakers once the law is passed–if those automakers can only achieve those standards by selling smaller cars at higher prices, well, then, so be it.

It all matters very little to the lawmakers themselves. By the time those standards take effect, the legislators have either been forced out of office due to sex scandals of varying degrees of luridness or have retired from office to become highly-paid lobbyists for higher fuel standards.

Automakers are right to oppose any and all fuel economy standards, though it is unrealistic to expect them to take such a principled stance today (bad for public relations in this era of rampant greenwashing). Manufacturers will build fuel efficient vehicles as fuel costs rise and technology improves, creating both a market for gas-sipping cars and, importantly, the ability to manufacture those cars at an affordable price in the first place.

These automakers understand far better than the public that law does not create reality, and that a 60 mpg standard will not magically create affordable, efficient vehicles. Perhaps we should pay attention when they caution against increased regulation instead of foolishly trusting politicians solve our problems by edict.

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