Over the last two years, soaring gasoline prices, post-9/11 concerns over energy independence, and growing awareness of carbon dioxide as a greenhouse gas all came together. Public demand forced the US Congress to strengthen fuel-economy standards last year, raising the requirement to 35 mpg by 2020. (The actual math is complex; each automaker has a slightly different target to meet, based on sales mix.)
But was this the right way to go? A steady chorus of dissent has been heard for years, from a surprisingly diverse set of critics. Last week, notoriously testy auto journalist Jerry Flint neatly summarized the argument against fuel-economy mandates. In a piece for Forbes, he argues that CAFE requirements are exactly the wrong way to reduce fuel consumption. His solution? Higher taxes on every gallon of gasoline.
The logic goes like this: If you want to reduce consumption, raise the price of something, and people will buy less of it. But mandating the sale of more efficient vehicles removes the burden from consumers—they don’t have to modify their behavior, drive more efficiently, or drive less—and shifts it entirely onto automakers. And that comes with a kicker: Carmakers must build vehicles that cost more to make, which will cost consumers more…which may mean fewer vehicles are sold. Worse yet, if gasoline remains cheap, what they have to build may not be the vehicles consumers actually want to buy.