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So now the automakers are going to have to meet new mileage standards. 42mpg for cars, 27mpg for light trucks by 2016.

The question I'd like to ask is - why does anyone think this will change anything? It's not like people are buying gas hogs because of a shortage of economical cars on the market. So these econo cars are going to languish in the dealer lots while people will still buy the cars/trucks they want. Which is what they've been doing. Which gets us nowhere. And doesn't do the automakers any favors as they lay out billions in R&D for cars that are poor sellers, thus losing a ton of money.

So when that happens what does the goverment do next - limit *production* of larger/thirstier cars so once they run out, anyone else looking for a car will have to buy some thing smaller/more economical or wait until next year? Does that strike anyone else as too much government intrusion?

Now, I *do* see that there will be *some* benefit in that we'll see improvements in technology such as hybridization, and establishment of economy of scale for the hybrid components to reduce the hybrid/non-hybrid price difference, that will help lift the fleet mileage up somewhat.

Personally, even as a fiscal conservative, I think they should raise the usage (fuel, etc) taxes. That will encourage selection of more economical vehicles as well as a reduction of miles driven as people will elect to reduce their driving, which is the BEST way to improve mileage since you're getting INFINITE MPG and emitting ZERO pollution while not driving. If you carpool, you're getting nearly DOUBLE the mpg and half the pollution and wear and tear. Businesses can pass the cost along to consumers (as they already do with sales taxes) and also consider their usage habits as well (better planning, for example UPS uses software to plan their routes to minimize left-hand turns which take longer and burn more fuel than right-hand turns - SMART). Businesses can help avoid these costs for employees by encouraging telecommuting, etc. I save a bunch of time, fuel, wear and tear, and pollution by telecommuting three days a week.

Trucks and large vehicles are available for rent for when the average person needs them. Insurance regulations could be enacted that limits the burden of occasionaly-driven "utility" vehicles that are owned (i.e. used once or twice a month to tow a boat or race car).

Unfortunately, the general population will not do any of these things (even though the benefits can already be realized today) unless you make them hurt. I also think that any taxes raised for this purpose should be diverted directly into a separate fund specifically to support infrustructure and/or support better, more useable, and more accesible public transportation.

the proper way to address this is from demand side.

rather than ramping up required MPG over the next 7 years, they should instead ramp up the use tax (as you suggested) over the next 10 years.

supply side will never be THE solution to the problem. it may help, but it certainly won't be able to dictate the demand.

Great article discussing the subject from Car and Driver...

http://tinyurl.com/qm9hdh" onclick="window.open(this.href);return false;

Key point:
"...neither politicians nor environmentalists acknowledge that our fleet would start to resemble Europe’s if CAFE were raised. Doing so would get too close to telling our citizens that they need to change their lives in order to save energy."

A CAFE also seems to assume that a car or a light truck is a commodity item. That they are fungible, identical. Or at least it assumes that car companies all present the same product lines.
A company with a line limited to just low end small economy cars has very little work to do. Yet technology can yield savings in these cars as well. The real pain is targeted at luxury brands and full line domestics.

A use tax makes more sense. If you really want to target the worst vehicles then tiered gas guzzler/emissions emitter taxes. Though it would be better for new sales if the levy was yearly on new and old registrations so it didn't discourage new purchases. Better still might be a focus on use taxes, but credits/subsidies for efficient new vehicle sales.

Steve Ekstrand wrote:A CAFE also seems to assume that a car or a light truck is a commodity item. That they are fungible, identical. Or at least it assumes that car companies all present the same product lines.
A company with a line limited to just low end small economy cars has very little work to do. Yet technology can yield savings in these cars as well. The real pain is targeted at luxury brands and full line domestics.

A use tax makes more sense. If you really want to target the worst vehicles then tiered gas guzzler/emissions emitter taxes. Though it would be better for new sales if the levy was yearly on new and old registrations so it didn't discourage new purchases. Better still might be a focus on use taxes, but credits/subsidies for efficient new vehicle sales.

The problem is no politician wants to even mention the "T" word when discussing gas prices. Any pol that approved a substantial use tax on gas like that would be grilled over an open flame. That's why it's easier for them to try and shift the burden to the automakers and let them deal with all the fallout.

And as for a use tax on guzzlers/polluters, most of them happen to be owned by poorer folk who can't afford to get them fixed properly or buy a new car, so the cry of racism would begin flying fast and furious.

Basically, we're screwed.

Steve Ekstrand wrote:A CAFE also seems to assume that a car or a light truck is a commodity item. That they are fungible, identical. Or at least it assumes that car companies all present the same product lines.
A company with a line limited to just low end small economy cars has very little work to do. Yet technology can yield savings in these cars as well. The real pain is targeted at luxury brands and full line domestics.

Not necessarily. The formula isn't simply take the fuel economy of each model x the number produced and then divide by total production to get an average. Surprisingly, one of the Japanese automakers has as a big a burden when it comes to meeting CAFE as GM does.

Note also that industry execs and UAW prez Gettlefinger were standing behind the rostrum for the announcement. Could be just PR on their part, but probably not when they're standing with the president instead of sitting in the audience.

Bob Beamesderfer wrote:

Steve Ekstrand wrote:A CAFE also seems to assume that a car or a light truck is a commodity item. That they are fungible, identical. Or at least it assumes that car companies all present the same product lines.
A company with a line limited to just low end small economy cars has very little work to do. Yet technology can yield savings in these cars as well. The real pain is targeted at luxury brands and full line domestics.

Not necessarily. The formula isn't simply take the fuel economy of each model x the number produced and then divide by total production to get an average. Surprisingly, one of the Japanese automakers has as a big a burden when it comes to meeting CAFE as GM does.


I'm confused. How does a harmonic average make it the same burden on BMW and Mercedes than it is on Kia or Diahautsu? The harmonic average just means Chrysler can't get the full benefit of selling golf karts as passenger cars. And the split fleet means Fiat has to build cars here if they want to sell Hemi's.

From Toyota's web site:

Q:The EPA ratings for E85 show a significant drop in fuel efficiency from your unleaded gas models. Why would owners want to use E85 with such poor fuel efficiency, while at the same time paying more at the pump?
A:The reduction in fuel efficiency for E85 is not limited to Toyota models. If you check the EPA Web site, you will see that the EPA fuel ratings for all manufacturers are lower when comparing E85 with unleaded gas. Although you would use more E85 than unleaded gas to go a given distance, overall you would use less fossil fuel with E85. That's why E85 is an option for Tundra and Sequoia 4WD buyers who are concerned about our dependency upon foreign oil.

Q:Why did Toyota feel there was a need for an FFV?
A:FFV is part of Toyota's comprehensive alternative fuel strategy to help reduce the nation's dependency upon foreign oil. The potential market demand for FFV was a contributing factor in making it available in Tundra and Sequoia models.

Real answer, to receive the CAFE MPG benefit of offering the FFV, and not fall behind the (can't use the term domestics, can't use Big three, as neither is true, well you know what I mean) playing the same game.

I can't believe what I'm reading here. Why does anything need to be done? Looks to me like it's back to 80's where automakers will be back making cars nobody wants and charging more for them, not only in additional purchase costs but also taxpayer subsidies. If given a choice, mine would be let the market decide. Right now we are being asked to pay more and reduce consumption while we ignore solutions that would require no such sacrifice. It's as if living with less while paying more is somehow a noble endeavor. Am I the only one who is angry by this intrusion from our government? Cafe standards...........bah! humbug!

George Schilling wrote:I can't believe what I'm reading here. Why does anything need to be done? Looks to me like it's back to 80's where automakers will be back making cars nobody wants and charging more for them, not only in additional purchase costs but also taxpayer subsidies. If given a choice, mine would be let the market decide. Right now we are being asked to pay more and reduce consumption while we ignore solutions that would require no such sacrifice. It's as if living with less while paying more is somehow a noble endeavor. Am I the only one who is angry by this intrusion from our government? Cafe standards...........bah! humbug!

I am angry. All this crap is so stupid.

And by the time I am old enough to afford a nice fast car there won't be any left.

Tadd Ekstrand wrote:And by the time I am old enough to afford a nice fast car there won't be any left.

I think by the time you can afford a fast car all the CAFE BS will have been exposed as BS. You may be buying a different animal than we have today, but one way or another, it'll still be fast as crap. CAFE is trying to ride a tidal wave, and it ain't gonna work.

I hope your right

me too

George Schilling wrote:I can't believe what I'm reading here. Why does anything need to be done? Looks to me like it's back to 80's where automakers will be back making cars nobody wants and charging more for them, not only in additional purchase costs but also taxpayer subsidies. If given a choice, mine would be let the market decide. Right now we are being asked to pay more and reduce consumption while we ignore solutions that would require no such sacrifice. It's as if living with less while paying more is somehow a noble endeavor. Am I the only one who is angry by this intrusion from our government? Cafe standards...........bah! humbug!

Yeah yeah yeah.... But its not realistic. There is a market failure. The political world has decided that the SUV and gas guzzler are bad for society. The market will not achieve those ends because the consumer still sees gas as cheap and size and performance provide great marginal utility. The market place wants gas guzzlers! You can't get to any emissions or gas savings without market intervention. The question is what is the most efficient and fair way to meddle with a market.

You may not want market interventions. But that probably makes you a holocoust denier... er global cooling denier... err a conservative?

History, you have to love it.

My first car, purchased in early '75 was a three year old Honda Coupe. A two cylinder, 360cc, 32 horsepower and five speed on the dash. I paid 40% of the sticker price paid by the original owner, he paid the dealer above sticker, way above. In 1972 the world included an unpopular war, crazy countries with nuks and global financial turmoil.

By '75 or '76 things started to look better: the "crook" had left the white house, the congress stopped supporting an allye that we had help to defeat an aggressive neighbor and the movies were all based on "shake, bake and devour" (think Earthquake, Poseidon Adventure and Jaws).

Then we elected "Jimmy". Then cars really sucked.

Thank God for Ronnie, History can be fun. Any one been to the movies lately?

Tadd Ekstrand wrote:

George Schilling wrote:I can't believe what I'm reading here. Why does anything need to be done? Looks to me like it's back to 80's where automakers will be back making cars nobody wants and charging more for them, not only in additional purchase costs but also taxpayer subsidies. If given a choice, mine would be let the market decide. Right now we are being asked to pay more and reduce consumption while we ignore solutions that would require no such sacrifice. It's as if living with less while paying more is somehow a noble endeavor. Am I the only one who is angry by this intrusion from our government? Cafe standards...........bah! humbug!

I am angry. All this crap is so stupid.

And by the time I am old enough to afford a nice fast car there won't be any left.

I said the same thing back then. Cycles. Public demand will prevail.

Tadd Ekstrand wrote:

George Schilling wrote:I can't believe what I'm reading here. Why does anything need to be done? Looks to me like it's back to 80's where automakers will be back making cars nobody wants and charging more for them, not only in additional purchase costs but also taxpayer subsidies. If given a choice, mine would be let the market decide. Right now we are being asked to pay more and reduce consumption while we ignore solutions that would require no such sacrifice. It's as if living with less while paying more is somehow a noble endeavor. Am I the only one who is angry by this intrusion from our government? Cafe standards...........bah! humbug!

I am angry. All this crap is so stupid.

And by the time I am old enough to afford a nice fast car there won't be any left.

Not that I'm excusing the CAFE rush, but that's what everyone said back in the 1980s. They were wrong then ...

Bob Beamesderfer wrote:

Tadd Ekstrand wrote:

George Schilling wrote:I can't believe what I'm reading here. Why does anything need to be done? Looks to me like it's back to 80's where automakers will be back making cars nobody wants and charging more for them, not only in additional purchase costs but also taxpayer subsidies. If given a choice, mine would be let the market decide. Right now we are being asked to pay more and reduce consumption while we ignore solutions that would require no such sacrifice. It's as if living with less while paying more is somehow a noble endeavor. Am I the only one who is angry by this intrusion from our government? Cafe standards...........bah! humbug!

I am angry. All this crap is so stupid.

And by the time I am old enough to afford a nice fast car there won't be any left.

Not that I'm excusing the CAFE rush, but that's what everyone said back in the 1980s. They were wrong then ...

They were right for nearly 20 years. Then technology overcame. But its painful to get there.

But technology evolves a lot faster then it did then.

Revenue-neutral gasoline tax, something around $2 a gallon. Federal income tax rebate, based on average MPG and average miles driven by state. Probably need an income factor so the regressiveness is negated.

I don't know... The low hanging fruit is long gone. And the jump in standards is huge.

Safety standards are going to have to disappear as we decide that Polar Bears are more important than human beings.

George Schilling wrote:It's as if living with less while paying more is somehow a noble endeavor. Cafe standards...........bah! humbug!

George, you're leaving out the benefits! It's a noble endeavor if it reduces the amount of money we send out of our country and into the Middle East. It's a benefit to have cleaner air. It's a benefit to extend the supply of oil. You sound like the people who whined and cried and fought against catalytic converters and smog controls. Is cleaner air worth some horsepower and a few dollars? Your car still got you to work, which really is it's primary purpose, no matter how much we like to romanticize our automotive desires.

Industry is resistive to change (one of the reasons environmental groups get so militant is because industry gets so entrenched) and we do in general need to guide society into morphing the market and thus our technology for the better. Jamming it down indutry's collective throats as California did a few years back with it's electric car mandate will not work. It's a societal change and you can't just force people or industry to change overnight. Just like civil rights issues - it takes time to change a society's views and the pressure it places on the markets. We're in a time where a greater percentage of people are more concerned with environmental issues and the tide will continue to change and industry will adapt. It's smart not to pollute and it's worth some cost when applied sensibly.

Steve Ekstrand wrote:I don't know... The low hanging fruit is long gone. And the jump in standards is huge.

I agree that a lot of the low-hanging fruit is gone but many of the technologies are not fully applied. My '06 Civic's VTEC system has a very nice refinement for economy - at low loads it opens only one intake valve to promote good mixture turbulance and delays the closing of that valve, making the 1.8L effectively a 1.5L one. My Civic gets me over 40mpg on the highway (43 mpg from Vegas to LA) where as my Escort got about 31 on the highway. The Civic has 10 more HP and also pollutes a lot less (ULEV). And that's one model from one manufacturer. Same applies to hybridization. This may be where the CAFE standards will have soem positive effect.

The rest of the mileage improvements will rely more and more on societal changes. Because you need a truck on the weekends (towing, hauling) or occasionally haul seven people around, doesn't mean you need to drive one around the other 95% of the time. I expect to see pooled-vehicle businesses pop up where you rent a truck for a weekend for a reasonable cost when you need one. Or you drive around in a 40-mile electric as your primary car, renting a gas-powered one for long trips. Amost everyone can get by with a 40-mile electric range for their daily commute, but nobody wants to get stuck when they need to drive 50 miles in one shot so nobody will buy them.

On another note, not all emissions are tailpipe emissions and fixing those has virtually zero effect on how the car operates. The new standards consider the car as a whole, including the manufacturing process. Sealed fuel systems (and the ability to detect a leak - i.e. loose gas cap), less outgassing from interior plastics (you know that new car smell is toxic gas from curing plastics and adhesives, right?). Using catalyzing paints rather than solvent-based ones has reduced pollution a tremendous amount. Sure, it's lead to some cars exhibiting "dandruff" in their later years but that seems like a minor concern overall.

I've heard that the least polluting cars you can buy actually pollute less driving down the highway than a '60's car sitting in the garage, because of those evaporative issues. And their tailpipe emissions are cleaner than the intake air on a smoggy day. Those are real improvements.

Will Kalman wrote:

George Schilling wrote:It's as if living with less while paying more is somehow a noble endeavor. Cafe standards...........bah! humbug!

George, you're leaving out the benefits! It's a noble endeavor if it reduces the amount of money we send out of our country and into the Middle East. It's a benefit to have cleaner air. It's a benefit to extend the supply of oil. You sound like the people who whined and cried and fought against catalytic converters and smog controls. Is cleaner air worth some horsepower and a few dollars? Your car still got you to work, which really is it's primary purpose, no matter how much we like to romanticize our automotive desires.

Industry is resistive to change (one of the reasons environmental groups get so militant is because industry gets so entrenched) and we do in general need to guide society into morphing the market and thus our technology for the better. Jamming it down indutry's collective throats as California did a few years back with it's electric car mandate will not work. It's a societal change and you can't just force people or industry to change overnight. Just like civil rights issues - it takes time to change a society's views and the pressure it places on the markets. We're in a time where a greater percentage of people are more concerned with environmental issues and the tide will continue to change and industry will adapt. It's smart not to pollute and it's worth some cost when applied sensibly.

Sorry Will, but most desirable changes occur naturally without government mandates. Smog controls are the exception, not the rule. The gas mileage we are getting from our vehicles is improving every year without government mandates. Production of gas guzzlers has been cut back dramatically if not stopped altogether without government mandates. Do some research and find out about the emerging companies who are already developing fuel efficient vehicles. Find out about he cars that are already classified as zero emission vehicles. The market is demanding more fuel efficiency and it is happening without government intrusion. Fuel demand is already down. We don't need more taxes. We don't need the government telling us what is good for us. We as individuals already know that and the automakers that meet that demand will be the ones who survive while we get the cars we want. This has nothing to do with horsepower. It has everything to do with government cramming things down our throat we don't want and telling us how much happier we will be. Bah...Humbug.

George,

The market is not flawless nor always right. There are no infallible systems.

Bob,

You are the market, spend your money as you see fit.

My sister lives near Washington DC. When the family ventures into the district they pack the families lunch and always include extra sandwiches. If approached by someone panhandling they offer what they them self's will have to eat. They get turned down more that not.

Sales is sales. If you don't get the results you are looking for keep prospecting. Her peanut butter sandwiches don't buy the desired booze.

The market works, like the government. Messy, never go into the kitchen of you favorite restaurant, I'm sure you know why.

The illusion of you satisfaction will not survive the reality of the kitchen.