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Why Fuel Efficiency Advances Haven't Translated To Better Gas Mileage
greenrainbow tips an article about a research paper from an MIT economist that attempts to explain why technological advances in fuel efficiency haven't led to substantially better gas mileage for the average driver. Quoting:
"Thus if Americans today were driving cars of the same size and power that were typical in 1980, the country’s fleet of autos would have jumped from an average of about 23 miles per gallon (mpg) to roughly 37 mpg, well above the current average of around 27 mpg. Instead, Knittel says, 'Most of that technological progress has gone into [compensating for] weight and horsepower.' ... Indeed, Knittel asserts, given consumer preferences in autos, larger changes in fleet-wide gas mileage will occur only when policies change, too. 'It’s the policymakers’ responsibility to create a structure that leads to these technologies being put toward fuel economy,' he says. Among environmental policy analysts, the notion of a surcharge on fuel is widely supported. 'I think 98 percent of economists would say that we need higher gas taxes,' Knittel says."
I think 98 percent of economists would say that we need higher gas taxes Knittel says.
93% of all statistics are made up. 99% of economists know that.
Adverse conditions to not favor top heavy rear wheel only SUVs.
This is then a market failure. What we should do is tax fuel at a rate that makes it internalize the costs it normally externalizes when the results go out the tail pipe.
One of the US crash safety standards required by the NHTSA that adds weight and expense to new vehicles is for "unrestrained drivers", despite the fact that under 10% of US drivers go un-belted these days. The punch line is that the IIHS found the NHTSA test not very useful, because un-bented passengers often aren't held in place in front of the intended safety devices.
Keep in mind that the US Gas tax is used to pay for highways, that it's not indexed to inflation, and it was last raised early in Clinton's first term. Which means it doesn't actually cover the cost of maintaining highways.
The result is that my, non-car-using, ass has to pay income taxes to subsidize all these people who love their cars so much, but if I dare to ask them to pay for a train or another bus I'm breezily told "nobody will use that."
Given all the electronic junk such as ABS, TCS, TPS, multiple airbags, electric seats, motorized windows, mirrors, rear-seat DVD players etc etc that they shovel into cars as standard these days, All the efficiency gained is probably mostly lost in extra weight and power consumption to drive that stuff.
I for one would welcome the opportunity to buy a simple car without all that junk, except there isn't really the option any more. Apart from the fuel savings, think of the production cost savings the car companies could pass on to the consumer.
Because they're so simple. They would also allow our highway fund to be self-sustaining, which would mean that we could stop subsidizing it with income taxes from people who don't drive. Things like tax credits and CAFE Standards can be gamed.
In the long-term taxes also have the advantage of getting people used to $6 Gas. Oil production isn't rising. Indian and Chinese guys are finally getting rich enough to drive home for the holidays, which means it's inevitable that gas will go up. Period.
But since everybody pays the gas tax all the time nobody wants to be responsible for raising it, therefore we get a mess.
I'm not necessarily against taxing gasoline. However, before we start using a gasoline tax as a tool to force people to behave a certain way, maybe we should consider eliminating the billions of dollars of subsidies given to the oil industry so that we can see the *true* price of gasoline?
(NY Times on oil subsidies: http://www.nytimes.com/2010/07/04/business/04bptax.html)
All the posters here keep crying about how "the open market" has failed, but we aren't in an open market, so that is nonsense.
Taxes are for funding the govt services we all need...that should be it...period.
People should be free to choose to drive and spend in the fashion they wish.
Taxes weren't passed to allow a 'chosen' few to dictate citizen behavior....
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
The increase in gas prices hasn't drastically changed what vehicles we buy. Many of those that really would rather buy more efficient vehicles can't afford them, and are stuck with older ones, so the economists would just be hurting the poor.
As consumers shouldn't we choose what vehicle economies we use? Where I live, SUVs are all over. But, it makes more sense. Adverse conditions favor SUVs. An economist, you would think, would say people buy what they want.
Few people really *need* a 4WD SUV or even an AWD car.
When I lived in the northeast, I commuted entirely with a front wheel drive car. I put on snow tires in the winter, and never got stuck (or in a winter time accident). For 3 winters, I moonlighted as a snow-plow driver for a local business, so part of my commute meant driving in conditions that many people stayed home in (and I regularly saw 4WD vehicles that had run off the road). As long as the roads had less than 8 inches of snow, I was good to go - beyond that I'd need more ground clearance than my car provided. I did resort to chains on a few icy days.
Smart driving and snow tires are much better than blind trust in an SUV. And unfortunately, many SUV drivers do appear to use that blind trust rather than good driving skills.
4 wheel drive (or AWD) only helps you move forward, you already have 4 wheel braking, and for most of us, it's the braking that's more important when driving in adverse conditions.
Now it's possible that you have a need to travel on unmaintained roads to your cabin in the woods, for that I'll grant you that an SUV may be helpful (but not infallible, get a Sno-cat if you *have* to get somewhere in the snow)
Whatever you think..taxes should not be used for behavioral manipulations.
Taxes are for funding the govt services we all need...that should be it...period.
People should be free to choose to drive and spend in the fashion they wish.
Taxes weren't passed to allow a 'chosen' few to dictate citizen behavior....
So you advocate rolling back tobacco taxes?
Speaking for myself, absolutely. Taxes used for social engineering are wrong. Period.
The purpose of taxes are to pay for the government. If the specific role of fuel taxes are to pay for the roads, then raising them with the idea of forcing 'economy' is wrong.
It is also amazing to me that some of the same people who will practically demand such taxes in the name of the environment will turn right around and argue that a flat tax is wrong because it hurts the poor. As if the higher fuel tax doesn't?
I was raised on the command line, bitch
"Nemo me impune lacesset"
Ok. But should taxes be used to capture the costs of externalities not accounted for otherwise?
For instance, the increase in the cost of healthcare caused by polution isn't reflected in the price of gas at the pump. That cost is passed along to society at large. Do you think it's appropriate for that cost to be captured by a tax?
No. For two reasons. The first being that once you allow government to start collecting taxes for "externalities" then you've given them practically a blank check for whatever new taxes they want to levy, as long as it is to "capture the cost of an externalty." Second, It ought not be the role of government to be deciding such things. What's more, who is to say what the increase in cost of health care is or even if it can be tied to car pollution or any other sort.
I was raised on the command line, bitch
"Nemo me impune lacesset"
The purpose of taxes are to pay for the government.
As long as we have any publicly funded health care, then government is paying for the health consequences of smoking. With that in mind, why is it wrong to tax a behavior that increases an individual's societal burden?
That's cute. You think the market will naturally do what's right instead of what's profitable. :)
Take a look at http://en.wikipedia.org/wiki/Sumptuary_tax
One of the original reasons given for a tax like that:
The sale of alcohol necessitates higher costs in policemen and prisons, Pigou argues, because of the crime associated with alcohol. In other words, the net private product of alcohol businesses is peculiarly large relative to the net social product of the same business. He suggests that this is why most countries tax alcohol businesses.
In the case of oil, there are many costs beyond that of simply producing the oil, refining it and transporting it. The most obvious is the cost of maintaining trade relations with many OPEC countries. Most industrial countries would have no need of Middle Eastern countries if they weren't sitting on a sea of oil, and could leave them to their own devices like countries in Africa and South America.
There's the cost of CO2 emissions, although many people are still burying their heads in the sand about this.
Then there's the cost of transitioning from oil. We could wait until we simply run out of cheap oil before doing anything, or we can preemptively start the long process of transitioning away from oil as a primary source of fuel used for transportation.
I don't know, ask all the overweight people out there what's wrong with a junk food or fast food tax?
The cost of obesity on society is 100 times the cost of smoking on society, and we're footing the bill just the same as with smokers. Ask yourself this: if a parent allows their child to eat themselves into their own grave, does that constitute child abuse? Should the state be allowed to remove the child from a home that does not make sure their children are of a healthy body weight? If a child is severely underweight, the state will absolutely take a child into custody, it happens all the time. But overweight? Never.
So how do you feel about a crappy food tax? Because honestly, I find that nine times out of ten, the person that is all about the smokers tax thinks the shitty food tax is just going too far. That's not to say that it is always true, but it usually is. Smoking is considered the dirty habit, but cramming 10 servings of powdered mini donuts in your mouth in a single sitting isn't? Eating 3 Double Cheeseburgers for lunch with an extra large fries and half gallon of coke isn't a dirty habit, too?
And then there's the excuses "Why should I be punished for eating fast food once in a while?! I am not overweight!!" That's a bullshit excuse because not everyone that smokes gets fucking lung cancer, but they all pay the tax just the same, don't they? So the fact that a person is healthy and only eats a little candy is immaterial.
Mind you, I'm not a smoker, but I used to be, and it really was the increased cost of the things that encouraged me to quit...$7 a pack when I finally managed to lock myself in the house for 3 days without cigarettes and get off of them once and for all. I just find it funny how hypocritical most people are when it comes to smokers, and how easily they ignore their own bad habits. Human nature, I guess...
Whatever you think..taxes should not be used for behavioral manipulations.
Taxes are for funding the govt services we all need...that should be it...period.
Almost all taxes manipulate behavior, it is just that we are more used to some type of taxes than to others. Intrinsically it is no more manipulative to tax a scarce polutant vs taxing work, investment and real estate like we do today.
I would rather say that since we need some taxation to support certain government function, let's tax the things with the least negative (or even positive) manipulative effects. Taxing gas would come well ahead of taxing work in that argument.
All taxes modify behaviour, intended or not. At the moment most taxes are raised in ways which result in modifications to behaviour which are bad. For example, taxes on labour, and taxes that cause corporations to prefer debt financing over equity financing when there's no underlying business reason to do so. You have to pay your taxes somehow.....much better to have them levied on things where there's an obvious economic advantage (like fuel and anything else with negative externalities) than where the opposite is true. There's a limited supply of those things, but what supply there is isn't being fully used.
Whatever you think..taxes should not be used for behavioral manipulations.
I would argue the exact opposite. Taxes are the only way to fairly manipulate behaviour. Should it be in the overall interest of everyone to reduce our rate of fuel consumption, a tax is the only way to go. What are the alternatives, make gas guzzling vehicles illegal? Or how about requiring automakers make specific types of cars.
A tax on gas will change national behaviour without placing limits on what we can do. Want to drive a Hummer? - just be ready to pay for it when you fill up. The tax acts as an incentive for people to minimize fuel consumption. This is better then the alternative as people retain the freedom to do drive and purchase whatever vehicle they want.
People should be free to choose to drive and spend in the fashion they wish.
Yes, but when those "fashions" have a negative impact on their neighbours then it is time to apply a tax. The true cost of a product is not measured with just dollar signs. For example, the environmental repercussions of consuming a product are almost never part of the original purchase price. If the "invisible hand" is going to work correctly, monetary values for those repercussions must be artificially added in the form of a tax.
If you do not allow society to lay the cost of externalities onto the perpetrators, you invariably produce a tragedy of the commons. You can, in principle, use Ron Paul's approach and simply make people pay for polluting private property - i.e. if you produce CO2 that turns up in the air over my property, you are trespassing and need to pay damages. But that is technically implausible for shared resources like air, water, and the ecosystem as a whole. Thus, using taxes to approximate the externalities is a reasonable approach. Of course we can only approximate the cost, but that is no different than with any other financial planning, wether by government or in the private sector. Very very few projects end up exactly on budget. That's not a reason not to plan, nor is it a reason not to act.
Stephan
Really?! Then what is a government supposed to tax. Any economist will tell you that negative externalities are *exactly* what a government is supposed to tax and then use the money to subsidize positive externalities. The government is certainly not the most efficient body in the world, but I'd argue that compensating for externalities should be the government's first priority.
Any economist? Keynesian economists, perhaps, would argue the POV you are espousing right now. Many who follow the Keynesian school of thought are in prominent positions in government power including the current chairman of the Federal Reserve as well as the President of the United States... and several treasury ministers in other countries too. And how they've been handing the economic situation over the past five years or so is supposed to give us confidence that they are doing the right thing and their philosophy is sound?
There are several economic philosophies which do not accept this basic premise you are claiming here, in particular those who follow the Austrian school of thought instead. Most of them feel that personal liberty is far more important than some sort of command economy controlled by some government bureaucrats, because those same bureaucrats simply can never have enough information to make proper decisions in the first place.
At issue here to is a sense of trust on the part of the government towards its citizens. A government which trusts its citizens to do the right thing is by far more likely to give you personal liberties and stay out of your life than a government which wants to monitor every detail in your life and protect you from yourself. Are you sure you want a government sticking its nose into your business, telling you how to live your life?
I have a hard time with that. We live in a world where "because f**k you is why" is the attitude of far too many people. Far, far too many. The libertarian ideal of "the government can piss off and get the hell out of my life" leaves open an unimaginably large chasm that ought to be occupied by societal responsibility, harmony and equality. To remove government as the modulator of behavior will see anarchy, chaos and destruction fall in to replace it. Everyone doing what's right in their own eyes cannot sustain a functional society. Some may think rape is OK because "really it's just good fun and that's what women were made for right?", others dumping toxic waste into rivers isn't a problem, I'll drive 90MPH down the highway and ignore red lights if I think the intersection is clear. etc. etc.
Nobody will ever agree with every behavior the government chooses modulate. That's obvious, but without a conductor the symphony is just going to break down into a discordant mess. As members of that society it is our responsibility to be educated, and provide intelligent, well thought out feedback to the government doing the modulating. This regrettably is often the missing component.
Two of my imaginary friends reproduced once
I live in Canada. I've lived in Canada all my life (Alberta and Quebec). I can rock a FWD car out of a snowbank that is up to the wheel wells. If I can't move the car with a shovel, a bit of time, and my own effort, most 4WD vehicles wouldn't have made it out of that situation either.
I've driven in blinding snowstorms through the crow's nest pass in the Rockies, and I've been stuck on the top of the Coquihalla with the semis putting the chains on their wheels. I made it through there just the same as they did. All I needed was some winter tyres and a modicum of care.
With traction control systems and some experience, driving in the snow is not a thing that requires 4WD. I know that they're better in the snow and ice, but they're not essential. Even with the car that I have (diesel VW Jetta wagon), which has a very low nose and consequently not much ground clearance, city driving in bad conditions isn't a concern. If it's so bad that I can't move the car, it's too bad to be driving, period.
If you need an SUV or truck—and there are people that do, obviously—then that's fine. But you almost never need one just for day-to-day things driving in the city.
Most of the US, if not the world, does not have any form of public transport.
No, that's just US. In the rest of the world "city planner" and "fuckheaded asshole" are two different professions.
Contrary to the popular belief, there indeed is no God.
"At issue here to is a sense of trust on the part of the government towards its citizens. A government which trusts its citizens to do the right thing is by far more likely to give you personal liberties and stay out of your life than a government which wants to monitor every detail in your life and protect you from yourself. Are you sure you want a government sticking its nose into your business, telling you how to live your life?"
Unfortunately, from what I've seen, most people are fucking morons. And yes, I'm OK with the government charging me more to smoke, drink, and eat shitty food if they're going to provide healthcare. I'm OK with the government charging more for fuel and coal-generated power due to their externalities. Your rights end where the next person's right's begin, and that includes the water and air you pollute for someone else, as well as the costs you shove onto someone else.
It's always "personal liberties" when it's your rights, and not someone else's rights.