It seems that the Obama administration will be introducing some tough (ish) new mileage standards for cars and light trucks — 42 mpg for cars and 26.2 mpg for light trucks by 2016. Kevin Drum is happy:
This is really important stuff.Â Cap-and-trade is the centerpiece of the Waxman-Markey energy bill, and it’s a critical part of any global warming plan.Â (Krugman’s column today strikes the right tone on Waxman-Markey, by the way.)Â As important as it is, though, I think of it as sort of like a headwind, something that helps get all the ships moving in the right direction.Â But that’s not enough.Â There are plenty of other currents and eddies and storm systems that, individually, aren’t as important as pricing carbon, but put together are actually far more important.Â Mileage standards for cars are one of them: pricing carbon will help motivate people to drive less and buy more efficient cars, but federal mileage standards will do it a lot faster and a lot more efficiently.Â Waxman-Markey is no substitute.
Now, I support this move. It provides an incredibly strong incentive to automakers to work seriously on efficiency. Which is a good thing. At the same time, I have to say that among the potential policies out there for addressing fuel use and emissions, this is one of my least favorite.
Drum is wrong — this move will do nothing to reduce driving. On the contrary, if we assume that oil prices will rise again with economic recovery, an exogenous increase in vehicle efficiencies will lead to more driving than would have otherwise taken place. This will also do nothing to motivate people to buy more efficient cars, at least up until 2016, when folks buying new cars will be “motivated” to go efficient since all vehicles will need to meet the new standards.
To me, there are three big failures to this policy. One is that if we want people to buy more efficient new and used cars now and drive less, then we need them to believe that driving (and gas) will be getting more expensive very soon, and mileage standards are counterproductive on this count. Two is that if we want people to cut vehicle emissions quickly and efficiently, then we need to give them good alternatives, which will cost money, which this policy does not generate. And three, if we think that rising oil prices could pose an economic danger to the country, then we want people to begin preparing for them now, and this policy does nothing to encourage such preparations.
What I’d like, as most of you know, is a series of substantial increases in the gas tax, to begin taking effect in 2011. This would have the same effect on vehicle fleets, more or less, as mileage standards. It would also encourage people to drive less, and it would reduce emissions among drivers who choose to purchase used vehicles, and it would provide revenues to build cleaner transportation infrastructure, and it would encourage consumers to continue substituting away from petroleum, reducing the economic impact of any future oil spike.
So to me, this is better than nothing, but I’d much rather see someone in Washington do some political heavy lifting on a policy to make drivers pay more for gas.