Corporate Average Fuel Economy (CAFE) standards for cars and trucks haven't been raised in quite a while. But now, big changes are in the works, and it naturally worries people in the auto industry:
The Big Three automakers believe such strict requirements will be extremely expensive to implement and ultimately will lead to the loss of jobs and fewer choices for the consumer.
Those in favor of the current legislation say it will help reduce the U.S.'s reliance on foreign oil.
If you click on WANE-TV's video, you'll see more details, including the claim that raising CAFE standards 40 pecent by 2020 would cost automakers $114 billion, including $40 billion at GM alone. That might be exaggerated -- such figures often are. But there would be costs, and they would be passed along to consumers.
Personally, I think I might eliminate CAFE standards rather than strengthening them (warning! economics argument coming). In 1974, the average American car consumed 13 mpg. As CAFE standards prompted by the OPEC oil embargo kicked in, that went to a peak of 22 mpg, and today the average is 21 mpg. And what has happened between 1974 and today? We now have twice as many cars and trucks as we did then, and we drive them three times as many miles. (The figures are from an article strongly supportive of CAFE, so I accept them as true.) If the standards are raised to 30 or 35 mpg, what do you think would happen?
Anything that lowers the price of doing something -- as Democratic calls to suspend the gas sales tax would for driving, as CAFE standards do -- will prompt people to do it more. And the more the price is lowered, the greater the demand will be. That means more gas used, not less, and, unless we start doing something about domestic supplies, even more dependence on foreign oil.
Or am I missing something obvious?
