On the New CAFE Standards and the Future of Mobility

I’m not a fan of CAFE standards, for many of the reasons Ed Dolan summarizes in a comprehensive post:

The very fuel-saving strategies that CAFE standards discourage, like moving closer to work or consolidating errands, are often the ones that have the lowest costs. That is why the total cost of reaching a given national fuel-saving target will be greater when achieved through CAFE standards than when induced by an increase in fuel taxes. A 2004 study from the Congressional Budget Office concluded that an increase in the federal gasoline tax would achieve a given reduction in fuel economy at a cost 27 percent less than that of an equivalent tightening of CAFE standards. Furthermore, its effects would be felt more quickly, because they would not have to wait for the gradual turnover of the national motor vehicle fleet. Over the 14-year time horizon of the CBO study, the gas tax increase would save 42 percent more total fuel.

Nevertheless, we now have a steep increase in CAFE standards, as Bill Vlasic of the New York Times recently reported:

While the American carmakers, as well as their Asian rivals, once argued against even minimal increases in government fuel rules, they are acquiescing without protest to an increase to 54.5 miles per gallon by 2025, from the current 27 miles per gallon.

The new standards are seen by the Obama administration as critical to reducing oil consumption and cutting consumer expenses at the pump, and the White House made it clear to Detroit executives that the changes were coming and they needed to cooperate.

The Antiplanner adds that there is an interesting twist to this increase:

[U]nder Obama’s 2009 direction, the average auto on the road would use about 2,700 British Thermal Units per passenger mile in 2025 (about 29 mpg). But under the new direction, the average auto will use 2,400 BTUs per passenger mile (32.5 mpg), declining still further to a bit over 2,000 by 2030 (38.0 mpg). Obama’s orders and these averages apply to all autos, including pick-ups and SUVs, and not just “passenger cars.”

These calculations assume an average occupancy of 1.6 people per vehicle; today’s average auto gets about 21 mpg and new cars get 27; the auto fleet turns over every 18 years; improvements in new-car energy efficiency follow a straight line to Obama’s targets; and no improvements are made after the target dates. I also conservatively assumed that autos taken off the road in any given year were of average energy efficiency for that year; if–as seems more likely–autos that are junked are of less than average efficiency, then the average energy consumptions will be even lower.

For comparison, Amtrak uses about 2,700 BTUs per passenger mile, while transit in the New York metro area–the most energy-efficient transit system in America–uses a little over 2,600 BTUs per passenger mile. While a few commuter-rail lines use less than 2,000 BTUs per passenger mile, almost all light-rail and heavy-rail systems use well over 2,000 BTUs per passenger mile. While transit energy efficiencies may improve, the turnover rate for rail equipment is a lot lower than for autos, which means any improvements will take longer to implement.

Can automakers meet the targets? They have met most if not all EPA targets up to now. [Emphasis added]

Note that the extension of the Subway (almost) to the Sea is planned for 2036. If fuel economy increases at this fast a clip, perhaps our priority should be managing congestion via the creation of dynamically priced markets for electricity, road space, and parking space, as proposed in the truly excellent 2010 book Reinventing the Automobile, rather than investing in mass transit per se.

One of the core ideas of the “Mobility Internet” is that intelligent vehicles that are aware of the presence of other vehicles on the road can be made lighter, smaller, and cheaper than dumb vehicles that are far more vulnerable to collisions. This has the potential to make personalized transport more readily available, including to those of us who can’t or won’t drive.

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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