New CAFE Standards Mean Nothing without Consumer Dedication to Efficiency
May 28, 2009 · Print This Article
The Obama administration’s new groundbreaking CAFE and emissions standards for cars and light trucks don’t mean much if the American public can’t be goaded into choosing energy-efficient models instead of gas guzzlers.
The new rule raises the average fuel economy for cars and light trucks combined to 35.5 miles per gallon by 2016, and gives the EPA authority to regulate tailpipe emissions from vehicles. But, automakers still have loopholes to create low MPG vehicles – vehicles that American consumers still want.
The only way to get consumers to purchase the more efficient vehicles in the numbers required to make a real difference would be raising the price of gas by 100%-200%, according to Pike Research, a market research and consulting firm that provides in-depth analysis of global clean technology markets.
From Matter Network:
The ongoing problem with CAFE is that it ignores consumer demand and offers automakers too many loopholes for building lower mileage vehicles. The fact is that consumers who are paying $2 or $3 per gallon for gasoline have very little incentive to buy higher mileage vehicles, and automakers still have an incentive (consumer demand) to build low mileage, high powered, trucks and SUVs.
…Without the shift in consumer thinking, though, the CAFE rules will only be window dressing for their intended purpose – getting more fuel efficient vehicles on the road. Additionally, as automakers try to force consumers into vehicles that are not actually spurred by their demand, consumers will react with their feet, marching quickly to companies that offer vehicles they want.
After all, there is a reason that in 2008 the Volkswagen Golf was the best selling vehicle in Europe, while in the same year the Ford F-150 was the best selling vehicle in the US, and it’s got nothing to do with CAFE rules. Getting Americans to buy more efficient vehicles that use less fuel through top-down product pushes brought on by CAFE rules is failing and likely always will.
It’s true: as long as gas prices are low, Americans will stubbornly hold on to their trucks and SUVs. Last summer, people were ditching SUVs so fast that used car lots were packed full of them. Now that prices have gone back down, that momentum has come to a screeching halt.
Of course, if gas prices were simply raised as an answer to inciting consumer demand for efficient vehicles, who would benefit the most? Oil companies. That would hardly be a good thing for the environment. A high gas tax would be a more effective, albeit more complicated answer.
Link [Matter Network]
Photo credit: Freaky Humor
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The taste for gas-guzzling vehicles does seem to be uniquely American. We would need a massive transition if we adopted Europe’s gas prices, because, AFAIK, Europeans use bicycles (or – gasp! – their feet) a lot more than Americans do.
I do think a gas tax would be the best way to raise prices. The problem is, a lot of people would object to the government manipulating the economy. But who knows if the Invisible Hand will act fast enough to avoid serious trouble.