Ford gets a pretty hefty credit for each vehicle the is flex-fuel capable (also called dual fuel), making the CAFE MPG much higher than the EPA estimated MPG.

You can read about it at http://www.nhtsa.gov/cars/rules/cafe/overview.htm, under the “How are alternative fuel vehicles treated under CAFE?” section

I don’t see any gas tax increase politically, unless it was used for repairing and rebuilding most of our highway infrastructure.

Instead of a federal gas tax increase we should start with ending tax breaks to petroleum companies, make them build in more costs associated with risks from environment and safety issues, and charge a lot more for leasing federal land or permits for offshore drilling (depending on distance from shore, or environmentally sensitive areas). The point is to make the petroleum industry set and dictate their own prices (without federal subsidies) to the consumer in a way that factors in hidden costs.

Charles your side comment is interesting in that it is so discouraging to have limited voting options (two parties) based on wackos or those who give vague &or misguided short-term promises, while always caving in to those who pay for their elections. Guess it is naïve but I do agree in theory to CO2 taxes and higher federal gasoline taxes but our political system and talking points only makes me discouraged that politicians and many voters who fall for propaganda can’t think for themselves or let alone think long-term. Political leadership is clearly lacking but that is something I should just except as something that will continue to get worse…

CAFE standards, an increased gas tax, incentives for fuel-efficient cars, etc. are still excellent factors because even if we don’t know how the magnitude or timing of climate change, why take unnecessary risks? Our technological leaders and innovators appear capable of improving things, despite our political systems, and they should be encouraged to do this (let’s not forget there has never been a documented case, that I know of, of a DC politician ever knowing how to turn the wrench on any technology which makes our lives better). Let’s also not forget that industrial and technological activity has contributed to the greatest mass distribution of wealth and material well-being the world has ever imagined, even as we know that we all need to take care of higher-level needs.

I am in a really bad mood today, and was a bit short on that post. I should only post when I am in at least on OK mood.

You are correct that in the current political environment any tax would be be political suicide. So how about a blended approach. Keep and raise CAFE to the level that is needed to prevent catastrophic climate change (as determined by scientific data) and raise the fuel tax slowly based on the fuel’s CO2 contribution as part on an overall environmental law overhaul after we get out of our current economic mess. The proceeds from the tax could be used to fund research for CO2 reduction, green job training and other worthwhile CO2 lowering projects.

Off topic side note: Please do not vote for the couch this November.

1. Consumers do not pay for hidden costs associated with petroleum or CO2 (that in itself is a market distortion). Stronger CAFE regulations does do a good job of keeping disparities somewhat predictable, unlike a market where the consumer truly decides what mpgs is right from them. This would shift most of the burden on those who can’t afford a luxury vehicle or those who do not fall for marketing schemes like the ones from the SUV craze a few years back.

2. Automakers generally make more profits with less fuel efficient technology. Things like ECO boast, or full to part hybridization does add costs that can be avoided if producers are no longer required to add fuel efficiency that eats into profit margins.

3. Shifting the burden onto the consumer ie. CO2 tax away from the producer is a bad idea. In this day of political nut jobs and short-term thinking, any long-term “tax” would be disrupted by political cycles and in the moment type of legislation or deregulation. Regulating a few dozen auto-manufactures is a lot easier than regulating millions of drivers who vote and can make irrational decisions based on in the moment thinking.

If the goal is to sell fuel efficient vehicles, I think CAFE should really just go away. It is a really bad way to distort the market. People are going to buy what they want. CAFE does nothing to change the want side, just the supply side. If we taxed fuel in a responsible way, people would want fuel efficient vehicles. So given a choice I would prefer distorting the market with a CO2 tax, and not CAFE.

So far Ford sales this year:
Ford Trucks: 469,734. Most of it F-series that have at best average MPG of 17.
Ford SUV and Crossovers: 290,783. The best of it is Ford Escape with average 23 MPG (128,507). Ford Edge is at best average 20 MPG (74,320).
http://media.ford.com/images/10031/August10sales.pdf
So Ford light trucks average MPG is around 19 MPG only!!! Wow!!! It is 4.5 MPG below CAFE standard!!!

Let’s see how much penalty Ford will pay.$5.50 USD per 0.1 mpg under the standard (see CAFE link above). It is $247.5 per truck. Guys this amount is ridiculous!!! What is $247.5 per $22,000 truck. No wonder that as of model year 2006, Chrysler and Volkswagen choose to pay penalty instead of obeying. Now Ford chose to do the same – it is more profitable!!! Or man! CAFE standards are useless – the market is self regulating right now – the only reason people are not buying bigger cars and trucks they fear the potential of higher gas prices.

The CAFE penalty should be at least 20 times more!