Fuel for Thought
Should our government regulate the fuel economies of our automobiles or should this be left up to the market? The Corporate Average Fuel Efficiency (CAFE) standards that were implemented in the 1970s contributed to great improvements in vehicle fuel economies. While we have environmental and political reasons to want cars with better fuel efficiency, there are also costs involved. The declining fuel economies of the last fifteen years seem to reveal that many Americans are not willing to bear these costs. Still, the vehicles that we drive today may be a misrepresentation of our true values. We may value environmental quality and/or independence from foreign oil, but sometimes our individual actions misrepresent our personal or societal goals. Since people's actions can be disconnected from theirvalues and society's goals, we cannot rely solely on the market; the governmentshould take action to increase the fuel efficiency of our vehicles.
The energy crisis of the 1970s led congress to pass a law requiring automakers to improve the number of miles per gallon (mpg) that U.S. automobiles used. These CAFE standards led to vast improvement in fuel efficiency ("Another Cup...", 6). In 1973 the average fuel economy of light-duty vehicles, which includes cars, SUVs, vans and pickup trucks that weigh less than 8,500 pounds, was 14mpg. By 1987 average fuel economies had reached 22.1mpg. CAFE standards were frozen in the late 1980s. Since then,fuel efficiency has declined slightly. The average fuel economy in2003 model-year cars is 20.8 mpg. This decline is mostly due to theincreased popularity of SUVs. "The SUV market share increased by morethan a factor of ten, from less than two percent of the overall new lightvehicle market in 1975 to 24 percent of the market in 2003"(Hellman and Heavenrich,3). The huge number of SUV drivers probably influenced Congress's decisionto reject a proposal for new CAFE standards, in 2003. The plan "wouldhave required the auto industry to produce a fleet of cars, trucks and sportutility vehicles that averaged 36 miles per gallon by2015"(Mateja, F8).
There are three main reasons for the desire to increase vehicle fuel efficiency. First, the United States does not want to be dependent on foreign oil in case of wars or other conflicts. Furthermore, oil is a limited resource. As Steven Plotkin points out, "Light-duty vehicles...account for about 40 percent of U.S. oil consumption" (25). While estimates vary on how long oil will last, no on argues that it can last forever. Whatever cuts we make in energy use today can help ensure a better future. Finally, a car that consumes more fuel per mile will produce morepollution than another, assuming they both travel the same distance and arein similar mechanical conditions. U.S. citizens have become increasinglyconcerned about smog and the possibility of global warming. As majorusers ofenergy and producers of pollution, our vehicles are good candidatesfor reform.
The CAFÉ standards helped to promote technological change, specifically improved engines and computerized controls ("Another Cup...", 1), but there are also other ideas for reducing gasoline consumption. One idea is to increase fuel taxes. Increasing fuel prices would decrease driving and pollution. High fuel prices encourage people to find other modes of transportation. For example, European countries have gasprices that are much higher than those in the U.S., and Europe's public transportation system is generally better and more widely used than that of the U.S. Another possible policy would be tax incentives for fuel-efficient vehicles and/or higher taxes on fuel-inefficient vehicles. This would encourage people to buy more fuel-efficient vehicles. With an increasing demand for better fuel economies, companies would invest more in technology that increase fuel efficiency. After all, manufacturers want to produce what will sell.
Some people are concerned that none of these methods would really help reducepollution over time. While some driving is done regardless of fuelprices, other driving increases or decreases depending on the price of fuel.Few people would drive around for leisureif the price of gas were quitehigh. Unless the price of gas also changed, improvements to fuel economywould result in a decreased cost to travel each mile. This would lead tomore driving. If it were cheaper to drive each mile, many people would increasetheir leisure travel. The additional amount of driving would not completelyoffset the decreases in fuel consumption,but it 'could offset the pollutionreduction benefits of the decreased gasoline consumption," as suggested byMolly Espey (4). This is because current emissions standards are measuredon the basis of emissions per mile rather than emissions per gallon (Espey,3). Incentives to buy efficient cars would lower the cost ofeach mile of driving and lead to more travel. This would increase pollution,unless other changes were made. In the case of fuel taxes, consumptionwould decrease because of a decrease in driving so pollution would also decrease,in the short term. Still, once technology improvements were made toincrease fuel efficiency, driving would return to higher levels, possiblyerasing the emissions benefit overtime (Espey, 4).
The solution to these problems is to switch to a system where emissions areregulated based on the gallon rather thanthe mile (Espey, 5). Whenemissions are regulated by the mile, as theyare now, an increase in drivingwill lead to an increase in allowable emissions. The car manufacturerswould be able to cut back on technologies that reduce emissions. Onthe other hand, if the emissions were measuredby the gallon, you would needan increase in fuel consumption in order toincrease allowable emissions. For example, imagine a car that gets20 mpg, and the standard foremissions is x amount of emissions per mile. Under the emissions permile standard, the car can emit emissions upto the amount of 20x for eachgallon of gas. If that car's fuel economyincreases to 30mpg, thecar can then emit up to 30x in emissions for eachgallon of gas. Ifinstead we say that the car is allowed emissionsup to the amount 20x foreach gallon of gas, that will remain constant despiteincreases in fuel efficiency.As long as the fuel consumption decreases, whichis the point, the pollutionwill also decrease using the emissions per gallonstandard.
So, the question remains, should we have any form of government intervention? Some people, including car manufactures believe that the issue should beleft to the market. Opponents of government intervention would saythat many people are already interested in decreased fuel economies, andtheir demands have lead to the creation of new technologies, like the hybridand fuel-cell vehicles. If people value better fuel efficiency theywill pay the costs involved to increase fuel economies. If we do notvalue increased fuel efficiency, then why should the government get involved? After all, the government is supposed to represent the interests of the people. If we truly value having big, fast, comfortable cars over our independencefrom foreign oil and the protection of our environment, then that is whatwe should have.
Unfortunately, the problem is not that simple. Our actions can oftenmisrepresent our values. Some people may buy gas-guzzlers withoutknowledge about the related environmental orpolitical issues, but most ofus are more informed than that. The biggerproblem is known as the"free-riding" problem. This occurs when thereis a commons, essentiallya resource or good that many people share. When someone gains all ofthe benefits of an action without bearing all ofthe costs, he or she isknown as a "free-rider". When commons exist,people are more likelyto make decisions that do not maximize the overallbenefit to society. In this case, clean air and political stabilityare examples of commons.No one can claim the right to them, and no one canbe excluded from theirbenefits. A society may truly value clean airand oil conservation,but many members of that society may choose to buy vehicleswith bad fueleconomies, even if they share the same societal values. This is becausea person who buys a SUV gets all of the benefits of the SUV,while the othermembers of society must share many of the costs with him orher. TheSUV owner is the only one who gets to drive the SUV and experienceits powerand comfort, but he or she is certainly not the only one who breathesinthe dirty air that is produced by the car. Many people who driveSUVswould rather that other people did not because they value clean air,butthe costs that they bear from their own vehicles are not enough to deterthem from driving inefficient automobiles.
Since the market is not always efficient by itself, the U.S. government shouldimplement a system aimed at reducing fuel consumption. A lack of informationor the presence of a commons can lead us to make decisions that are inconsistentwith our values. The free-riding problem does occur with issues ofenvironmental quality. Whether we implement new fuel efficiency standards,increase fuel taxes or increase incentives for people who drive fuel-efficientcars, the resultsare likely to be good for our country and the environment,worldwide. Most of us value a clean environment and a secure nation,and we should bewilling to bear the costs in order to share in the benefits.
Works Consulted
1. "Another Cup of CAFE, Please." Scientific America 285 (Aug 2001): 6.
In this short article, Scientific America describes the results of the CAFE standards from the 1970s. It says that such standards are the surest way to encourage the auto industry to develop new more fuel-efficient cars. After describing a few reasons why better fuel economies are necessary and addressing some of the opposition's concerns about regulation, Scientific America concludes that the United States should implement new fuel efficiency standards.
2. Bierman, Rosin and Robert M. Friedman. "The Road to Reduced Carbon Emissions." Issues in Science & Technology 8 (Winter 1991): 58-66.
This article, by Bierman and Friedman, takes a broad look at methods of reducing greenhouse gasses, the cause of global warming. Bierman and Friedman discuss possible solutions in the areas of construction, forestry, utilities, manufacturing and transportation. Within the transportation issue, they cover the possible results of fueleconomy standards, gas taxes, vehicles taxes and rebates, and transportationcontrol. While these methods all have slightly different results, interms of vehicle and fuel demand, Bierman and Friedman conclude that anyof these programs could be used to increase fuel efficiency and reduce emissions.
3. Espey, Molly. "Pollution Control and Energy Conservation: Complements of Antagonists? A Study of Gasoline Taxes and Automobile Fuel Economy Standards." Energy Journal 18 (1997): 23-39.
In this article, Molly Espey outlines reason for considering a new standard for measuring tailpipe emissions. After studying the probable economic ramifications of gas taxes and fueleconomy standards, Espey concludes that neither would help reduce pollution,given our current system. Today, we limit vehicle emissions based oneach mile. Through economic models, Espey shows that gas taxes andfuel efficiency standards would both eventually lead to more driving, andpossibly more pollution, unless our emissions regulations change.
4. Hellman, Karl and Robert Heavenrich. Light-Duty Automotive Technology and Fuel Economy Trends: 1975 Through 2003. U.S. Environmental Protection Agency. 20 May 2003
< http://www.epa.gov/otaq/cert/mpg/fetrends/s03004.pdf>
This document, a part of the EPA's website, is an executive summary of data gathered on fuel economies of light-duty automobiles from 1975 through 2003. It discusses reasons that better fuel economies are important for the environment and our country and providesdata on average fuel consumptions over the past 28 years. While fuelefficiency levels increased well into the 1980s, they have since fallen,despite new technologies that could be used to improve fuel economies.
5. Mateja, Jim. "Senate Backs Off Stricter Fuel Economy Standards." Orlando Sentinel 28 March 2002: F8+.
6. Plotkin, Steven E. "Automobile fuel economy: How far should we go?" Environment 35 (April 1993): 25-30.
This article is a look at the possible benefits and costs of fuel economy standards. Steven E. Plotkin analyzes the results of a study on fuel economy done by the National Research Council, which estimates technologically achievable fuel efficiency levels for coming years. Plotkin identifies and discusses some of the concerns that are held by people in opposition to fuel economy standards. Some people are concerned about safety implications, increased vehicle costs and/or problems within the auto industry.
7. Samaras, Zissis. "Emissions Reduction via Improvements in Engines and Fuels: The Tehran Case." Journal of Urban Technology 6 (April 1999): 63-87.
In this document, Zissis Sararas looks at a two-year project done in Tehran, Iran that aimed to reduce vehicle emissions by making engine and fuel improvements. Sararas provides data on emissions in Tehran and compares that to emissions in developed countries. Sararas describes methods from around the world that are used reduce emissions and/or increase fuel economy. He discusses emissions standards, particularly in Europe, diesel engines, fuel improvements, fuel economy regulations in the U.S. and alternative technologies.