In the wake of last week's announcement by President Obama that the proposed California greenhouse gas emissions rules would be adopted on a national level, Keith Crain, the publisher of Automotive News has published an editorial calling CAFE a failure. The imposition of fuel economy rules certainly played a part in the tremendous technical innovation that has occurred over the last three decades. Cars today are significantly more fuel efficient than they were back in early 1970s while emitting only a tiny fraction of the noxious pollutants they did then and producing much more power.
Crain's point however, is that what needed to happen then was a change in American driving habits and the same is true now. The problem is that politicians tend to prefer the course of action that is likely to get them re-elected rather than the one that will actually address the real problem. Thus they have always resisted the idea of raising fuel prices even though that has consistently been shown to have a much larger impact on fuel consumption than any fuel economy rules.

This time around, the new rules may actually have some of the desired behavioral effect although in a round-about fashion. The larger vehicles that Americans have traditionally preferred are going to become substantially more expensive in order to meet the new rules. Rather than directly influencing fuel pricing, politicians think they can hide from the blame for more expensive vehicles that they helped create. The economics of car buying will drive consumers to the smaller vehicles that they will be able to afford.

[Source: Automotive News - Sub. req'd]

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