NCPA - National Center for Policy Analysis


December 27, 2007

Environmentalists and the auto industry recently struck a deal to require new cars sold 13 years hence to average 35 miles per gallon; a 40-percent increase over the existing 27.5 mpg mandate, say Jerry Taylor and Peter Van Doren, senior fellows at the Cato Institute.

Consumers will almost certainly be the biggest losers:

  • Of the 1,153 passenger vehicle models on the road today, only two presently meet the proposed 35 mpg standard.
  • According to a review of Environmental Protection Agency data undertaken by Marlo Lewis at the Competitive Enterprise Institute, those cars are the Toyota Prius and the Honda Civic hybrid.
  • 9 other vehicles, Lewis reports, get 35 mpg in city or highway driving conditions, but not both -- and all of those vehicles are either subcompacts or compacts.

The industry has a couple routes it can go to achieve more efficiency, but none of the options represent a Christmas gift to car buyers:

  • Reducing vehicle weight is the cheapest way to improve fuel efficiency, but that would increase highway deaths, just as it has done in the past according to a 2002 study by the National Academy of Sciences.
  • Reengineering cars will reduce automotive performance in ways that car-buyers probably won't like while increasing automotive prices by as much as $3,500 a car according to the same NAS study.
  • Cross-subsidies might be the most direct way to meet the standard, but that represents a rather steep tax on people with large families, big dogs, and those who for whatever reason need to haul around a lot of stuff -- not to mention those who simply have a preference for zippy sports cars or riding high off the road.

Source: Jerry Taylor and Peter Van Doren, "Leave Those Car Buyers Alone," Cato Institute, December 20, 2007.

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