June 15, 2007
Congress' establishment of the Corporate Average Fuel Economy (CAFE) program to improve vehicle gas mileage and reduce dependence on foreign oil had significantly adverse consequences for consumers, the industry and its employees. Legislation to raise CAFE standards to between 35 and 40 miles per gallon will only do the same, says former transportation secretary James H. Burnley.
Regulatory schemes like CAFE can come with a number of unintended consequences, explains Burnley, including:
- Putting smaller, sometimes less-safe vehicles on the road and pricing some vehicles beyond the reach of many Americans.
- Artificially creating winners and losers in a highly competitive environment like the auto industry.
The U.S. auto industry nearly buckled under higher CAFE standards and new tailpipe emissions requirements in the 1970s. Those regulations clearly favored Asian manufacturers who produced only small cars and very few light-duty trucks. Additionally, the old CAFE scheme has an abysmal track record in reducing America's reliance on foreign oil:
- In 1975, the United States imported about 35 percent of its oil.
- Today, even after nearly 30 years of living under CAFE requirements, more than 70 percent of our oil comes from foreign sources.
Washington policymakers should slow their rush to just "do something," says Burnley. We must reduce our dependency on foreign oil, but not by building on CAFE regulations that wipe out U.S. jobs and undermine the quality of life for millions of Americans.
Source: James H. Burnley, "CAFE quicksand," Washington Times, June 14, 2007.
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