TCS Daily


The CAFE Paradox

By Max Schulz - June 28, 2007 12:00 AM

Congress is considering major energy legislation that, among other things, would significantly raise the federal Corporate Average Fuel Economy (CAFE) standards on vehicles for the first time in decades. The Senate passed a bill last week - and the House is now considering its own legislation - that would force carmakers to produce vehicle fleets with an average fuel economy of 35 miles per gallon. Under current CAFE standards, car fleets must average 27.5 mpg, while SUVs and light trucks are required to average 22 mpg. The new legislation would make the 35-mpg target apply across the board.

Advocates of the proposed stricter standards champion this legislation as a means to address high gasoline prices, curb our consumption of oil, and lead to greater energy independence. (Indeed, House Speaker Nancy Pelosi has set next Wednesday - July 4th - as the deadline for "energy independence" legislation.) The truth is that hiking the federal CAFE standards will do none of these things.

Perhaps the greatest misconception in today's energy debate is the idea that increasing efficiency will cut down our consumption. On the contrary, we should expect that if our cars and trucks become more efficient, we actually will consume more gasoline, not less. Increasing a vehicle's mileage doesn't just mean getting more miles per gallon, it means lowering the overall cost of driving. And if you lower the cost of something, people will consume more of it. In this case, the good that would be consumed is miles on the road.

That has been our experience over the last half century with cars, airplanes, lightbulbs, dishwashers, power plants, and everything else that uses energy. Nearly every sector of the American economy has seen wonderful advances in efficiency. For each unit of energy, we produce more than twice as much GDP today than we did in 1950. Yet during that period of time our total national energy consumption tripled. Paradoxically, the more we save, the more we consume.

CAFE's boosters don't understand these basic points. They think that if cars or appliances are more efficient, we will simply use less energy to drive the same distance or do the same amount of work. In some particular instances that may hold true. But the aggregate effect over time is increased consumption, as consumers take advantage of those savings to do more - to drive more, haul more, produce more. Peter Huber and Mark Mills described this "paradox of efficiency" in The Bottomless Well: "Efficiency fails to curb demand because it lets people do more, and do it faster—and more/more/faster invariably swamps all the efficiency gains."

Those who believe raising CAFE is the key to solving our energy challenges also make the mistake of thinking something so complex can be achieved through government fiat. Simply passing a law, however, won't make cars and trucks more efficient. Automakers and engineers have to achieve those efficiencies at the expense of other features consumers generally prize. But whereas consumers factor a vehicle's size, comfort, and safety into their decision to buy, along with mpg, legislators seem to believe the only import consideration is mileage. To meet the government's mileage averages, automakers have had to make cars smaller and lighter, i.e. less crash-worthy and more dangerous to drive. Have you seen a Ford Country Squire station wagon on the roads lately? The family station wagon has all but disappeared, thanks in part to CAFE's fleet requirements. These trends can be expected to increase if the higher standards are mandated.

If Congress truly wanted to do something about the high gasoline prices we face, it would take meaningful steps to open up new sources of oil supplies in Alaska, the Gulf of Mexico, and off of the outer-continental shelf. Energy demand is expected to soar in the coming decades, and we will need all the supplies we can get. The current legislation in Congress does nothing to address the supply side of the energy equation.

Instead, the CAFE fetishists in Congress are tinkering on the demand side, and it isn't working. Turning the efficiency dial up won't solve our problems, and it won't curb consumption. If Congress truly were interested in setting policies to cut down our consumption of oil, it would lower CAFE standards, not raise them. Suppose Congress mandated vehicle fleets that got, say, 3 mpg. We'd all drive a lot less, wouldn't we? Somehow I don't think Congress is prepared to take such a step.

Max Schulz is a senior fellow at the Manhattan Institute.


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151 Comments

The author paints a confused picture
This story seems to mix two points: one of gasoline (energy) consumer costs and the other of gasoline (energy) economy; AKA, conservation.

The article correctly points out that although technology has made us a more energy efficient society, energy consumption has increased. On the other hand, the article does not point out that the demographics of energy use indicate that industry is using much more energy than people and that industrial energy use has increased while per capita energy use has decreased.

Since the so-called "deregulation" of natural gas and electrical power industries, consumer prices have more than doubled in some locations. The doubling of consumer prices has not come with the same increase to industry. We all need energy to survive in this modern society so that in effect, consumers are being forced to subsidize industry by our government's failure to regulate the industry. Our government (USA) clearly favors industry over people.

Prior to "deregulation", industry ad consumer paid the same price. Now consumers are subsidizing the industry glut by paying sometimes over twice as much as industry. Since industry does not have to pay as much for the energy, we have gross inefficiencies in overall energy use.

The way to fix this energy waste problem, and the gasoline mileage standard problem, is too more strictly regulate industry since they seem to be the problem.

In addition, regulating US industry may allow the US auto manufacturers to more successfully compete with foreign automakers that currently dominate the fuel efficient car market.

"more strictly regulate industry "
USSR has demonstrated how effective that is in improving efficiency.

The most effient industries in the USA are NOT regulated or have the least regulations and most competition.

Per gallon fuel taxes
What incentive does any government have to ruduce per gallon consumption of gasoline when their revenues depend upon that consumption?

We'd get manufactures to make more efficient vehicles faster by ...
We'd get manufactures to make more efficient vehicles faster by simply requiring the prominent posting of EPA mileage ratings in all advertising.

This would be just as much an incentive and would have an impact sooner than 2012 (or whatever year).

Under the current proposals a company could make the most efficient SUV, but be penalized, because they did not sell enough higher mileage cars.

The only regulations that really work as intended are those that let the market decide what is best.

abetting murder and mayhem - - -
The National Highway Traffic Safety Admininstration (NHTSA) estimates that CAFE standards have killed 48,000 (yes, folks, that's 48,000) plus many more thousands than that maimed; by forcing us to drive smaller, more fuel efficient, but more dangerous cars. The National Academy of Sciences (NAS) and the Brookings Institution substantially agree.

All this suffering and death in exchange for no significant reduction in atmospheric CO2, nor "global warming". CAFE proponents have a lot of blood on their hands. This policy is insane.

That's a very simplistic answer
If you look at the data, you will see how deregulation helped our society to take a turn for the worse in terms of quality of life and economic security.

Or, you can continue to stick to ideals that were never right in the first place but that were programmed into you by government propaganda.

EXACTLY!
There is no distinction between industry and government in a fascist government.

You can lead a horse to water...
but you cannot make them drink.

The way to reduce automobile deaths is to make car ownership more expensive, tests more difficult, driving lessons mandatory, lower speed limits, and pass traffic regulations that favor public transportation.

The private auto is perhaps the biggest source of preventable death in the world. Individual mobility wastes energy, pollutes the environment by causing photochemical smog, global warming, waste disposal issues, introduces toxic chemicals throughout the environment, kills pedestrians, passengers and drivers alike.

Please document yoiur claim
What NHTSA study or document are you referring to?

In their own best interest
Detroit has lost billions in sales in recent years, to companies like Toyota who have established a name for innovation and for fuel efficiency. Why then must Detroit be dragged kicking and screaming into the 21st century by federal edict, demanding that they give the public what we say we want?

And not only say what we want, but vote with our dollars. Must Detroit resist legislation that's obviously in its own good, to the point where the Big Three are all dead as a dodo?

I don't get it. Is this what the CEOs pay themselves the big bucks for?

Brilliant, Stephen
More restrictive, government regulation is needed, say you.

No, thanks.

Your concept of government propaganda is quite interesting. You suggest the contrary notion, that to advocate for "less-government interference, free-market policies" is somehow programmed into marjon by --- the government.

Yes, it all makes sense now. Good joke.

There were some fundamental errors
in your first post. Deregulation of the gas industry started in the mid 1980s and it was followed by a modest, sustained drop in natural gas prices. The recent increase in natural gas prices over the past five years have nothing to do with deregulation. They are entirely the consequence of two factors: 1 the decline in gas reserves in the western sedimentary basin, with average well pressures today less than a third of what they were 15 years ago; 2 the construction of about 100,000 MW of gas fired CTUs which have placed a load on gas reserves, inventory and pipelines which did not exist before.

These are the facts, and they are not in dispute. Because so much of our economy was based upon low fossil fuel prices, the drawdown of gas reserves was bound to have a strong adverse effect irrespective of whether or not the industry was regulated or deregulated.

Father Knows Best
Again, with the "government knows best" argument.

Sounds like the free-market is making better progress towards getting Detroit to build what the people want. Where in the world did you get the idea that our bureaucrats, legislators and politicians know what the people want?

Dangerous vehicles
Actually the carnage has more been due to all the humongous SUVs on the road. In a collision with a normal sized car, they roll right across them. My own windshield is at bumoper level with half the cars I park next to in the parking lot.

I don't see that it's my fault for driving a car that's big enough to carry my wife and I and an ample amount of luggage when we go on vacation. My car is actually very maneuverable-- unlike those clumsy oxen that tower above us on the road, and are impossible to see over, under or around. And can crush us if they're a little too casual when changing lanes. And which sit so high on their frame they roll over at the slightest unexpected course correction.

In Europe, where most of the vehicles on the roads are about the same size, they don't have this problem.

How little you know
The automobile was in fact the third most significant urban health improvement in the 20th century after clean water and sewage management. Considering all health factors, its introduction reduced human mortality considerably. That it results in considerable pollution with large adverse effects is undeniable. But the alternative of animal transport at the turn of the 20th century was far worse.

"The way to reduce automobile deaths is to make car ownership more expensive". Yet another elitist prescription from a Cadillac Communist preaching yet more hardship on the working classes.

Very small
Your vision of the future is so bleak that you would choose to dream small, retard economies and pursuits of happiness, rather than take risks and do the great things.

Oh, come on.
What do you drive - a lawnmower?

Government knows best?
Certainly not a "government knows best" argument. If you go back and actually read what I wrote, you'd note that my entire comment was about the consumer knowing best.

Detroit persists in putting out ignorant, inefficient cars. And selling fewer each year. Meanwhile look at the trajectory in Toyota sales. I own one, and am very happy with my mileage and virtually maintenance free design. Detroit should have learned years ago.

They didn't.

I really don't care if the Guv regulates CAFE standards or not. In a few years the Big Three will be gone, and their more successful competitors will have taken over the American market.

BTW you should do something about that buzzing in your head. Such doctrinaire idiocy is interfering with your comprehension.

If that were true
then kindly explain these graphs.
http://www.nhtsa.dot.gov/people/Crash/crashstatistics/National%20Highway%20Safety%20Data%20charts.pdf

Two conclusions at least are apparent from these:
1 the overall total rate of accident fatalities is declining;
2 the rate of alcohol related accident fatalities is rising (what this means is that all other causes are declining drastically).

Here's a paper on EU rates.
http://themes.eea.europa.eu/Sectors_and_activities/transport/indicators/consequences/TERM09,2001/Transport_accident_fatalities_TERM_2001.doc.pdf

Note that their accident fatality rate is dropping as well. Note too that the drop in accident fatality rates began long before SUVs became a significant component of vehicle fleets and appears to have been unaffected.

Make no mistake, I dislike SUVs as much as you do, driving a sports car as I do. But dislike is one thing, and cause and effect are something else.

What both papers suggest is the word "carnage" is hideously inappropriate. Safety is improving, not getting worse. Most of the reason for it is better vehicle engineering.

Physics and the Point of Diminishing Returns
The CAFE is typical groupspeak uttered by politicians ignorant of reality. It reminds me of he 1.6 gal flush toilets that do not work and take 3 flushes. This is the type of stupidity you get when the government mandates in areas they have no business. 1.6 gal was arbitrary and has no basis in reality.

In a similar sense the political idiot class thinks they can mandate some arbitrary fleet milage.

First, it takes a certain amount of energy to propel any object at constant velocity based upon friction, mass and air resistance. To get very high milage vehicles you have to have low drag, low weight and very low friction between the road and the tire.

Given a fixed mass, road friction issue is a function of tire pressure and width (ignoring tread pattern). Hence road racing bicycles use very high pressure tires that are also very thin. Hardly suitable for high speed daily commuter cars.

Second, weight directly impacts road friction and handling. A car that is to light would be inherently unstable at high speeds, in wind, and could present a hazard. Structurally a very light car, by necessity, will require thin metal bodies or composites and would have be inherently unsafe in collisions. Ever seen a airplane after a crash? The same physics apply.

Take your 30mpg Yugo and hit Joe Bob's pickup and someone dies and it ain't Joe.

The internal combustion engine has inherent inefficenies that cannot be overcome, at least in a cost effective manner. As a example, it might cost 1000.00 per car to increase engine efficency from 40 to 55%. Beyond 55% the cost goes up exponentially and the return is very limited. Current advance have likely produced the point of diminishing returns for current engine design.

The real question here is are we going to let useless politicians mandate what we drive and what we eat, where we live, even what type of light bulb to use or are we a free people whom whill use market forces to provide the advances and cost effective products that satisfy both us and the needs of reality?

If oil continues to rise the market will provide the cars consumers wants far faster than useless politicians. I never cease to be amazed how the government and the mindless minions of the left think they can forever tinker with the market.

Health care is another issue easily resolved by market oriented reforms. Once again, this does not empower the political class so the market must be flawed. The left, ever distrustful of the market thinks only government is the solution.

If we left everything to the state we would still have XT computers and brick cell phones.

FLown in a small plane lately? A perfect example of a technology in total stagnation from FAA regulations. If a small plane could use innovation like the PC makers planes would be lighter, faster and far cheaper.

No money there for tort lawyers though is there?

Wrong answer again by Schulz

Advocates of conservative philosophy champion legislation to drill for more oil as a means to reinforce conservative philosophy. Is that because conservative philosophy is rooted in support for industry? Or is it because industry funds conservative infrastructure? Thats about the extent of the value of this article.


Hello? Is anybody in there? Max? You're human, so I assume you have a brain... is the light on? As sure as higher CAFE standards is not THE answer to greater energy independence or lower gas prices, nor is more drilling for oil on American territory THE answer.


>"Perhaps the greatest misconception in today's energy debate is the idea that increasing efficiency will cut down our consumption."

Thats funny. Use a misconception to declare a misconception. Good one. I don't believe your conclusion Schulz. I agree with your points, that cheaper gas will mean we consume more of it, but there is no reason to believe the gain in efficiency will be less than the increase in consumption. Frankly, its a stretch to even think the price of gas will decrease with higher CAFE standards. At the very most higher efficiency would help slow the inevitable increase in the price of gas.


>"CAFE's boosters don't understand these basic points."

Another misconception.

>"They think that if cars or appliances are more efficient, we will simply use less energy to drive the same distance or do the same amount of work. In some particular instances that may hold true."

LOL. In ALL cases this point is true. If we drive the same distance with a more efficient vehicle, we WILL use less energy. The rest of your paragraph is correct though, we're humans, and we're Americans to boot, make it cheaper and we'll use it more. So you're half correct, as usual. 50% correct, thats a failing grade.

>"If Congress truly wanted to do something about the high gasoline prices we face, it would take meaningful steps to open up new sources of oil supplies in Alaska, the Gulf of Mexico, and off of the outer-continental shelf. Energy demand is expected to soar in the coming decades, and we will need all the supplies we can get."

I don't think you're totally off-base by promoting drilling. It would help a little bit in the long-run. But its arguable that the cost and damage of doing it may outweigh the benefits. Drilling is also the only answer you're throwing out there. Surely conservatives have more ideas than to just drill more. Don't they?

Lets put our ingenuity into changing the nature of our energy supplies. Lets end our reliance on oil. Its going to happen whether we lead the change or not. A way for America to become a positive leader in the world again. That would be nice, huh?

>"If Congress truly were interested in setting policies to cut down our consumption of oil, it would lower CAFE standards, not raise them."

Actually, what Congress should do is raise the taxes on gasoline. That would do a much better, and quicker, job of cutting down our consumption of oil.
Alternatives are the answer, the future. Just imagine a time when America is not dependent on the Middle East for our energy needs. Imagine! Talk about freedom and security for America.

I'm left wondering, whats more important to Max Schulz and conservatives in general? Freedom and security? Or prominence for conservative philosophy? When the 2 are at odds, which team do you support?

Well
have you seen the latest models of Toyota pickups being advertised? Look much bigger and more powerful than anything except the 150s. Success for the manufacturers is not because they produce different products from GM, Ford and Chrysler; they make better quality. All of the Toyota, Honda and Nissan vehicles have grown greatly over the past 15-20 years even as Detroit's vehicles have been shrinking in size. Take a look at a Corola today and one from 20 years ago. Detroit's problems are that its companies are inefficient, hampered by collective bargaining agreements and huge pension liabilities, to name only a few sources. The poorer quality vehicles (not inherently larger or more inefficient vehicles) are the result of much deeper failures and weaknesses within the Nth Am auto sector.

You yourself said it Roy. "virtually maintenance free". That's quality; and the Japanese big three have got it and Detroit doesn't. It's not about vehicle size at all, because they are producing what the American consumer wants, size and performance.

Freedom of choice
In the EU they have no choices like we do and in Europe they think 100 miles is a long drive.

In fact in the UK I was told American think 100 years ago is a long time and the British think 100 miles is a long drive.

It is one thing to putz around town for errands. Hoever, when I road trip 3000 miles I like a nice comfortable car, especially with luggage and kids.

So weree going to delegate our choices (aka freedoms) to the politicians once again?

I forgot, I am a redneck with a big truck.

Since I work from home and drive very very little how is my choice any different fromt eh Yugo driver who drives 10000 miles a month? In fact, I bet I use less fuel. SO I made a choice.

Life is about US making choices or THEM making choices for us.

Which is it?

Why would you believe
that tougher CAFE standards will reduce total fuel consumption or even consumption/capita? They never have before.

Show me the data
1. That any industry has been truly degregulated.

2. Show me how anything has been worse from true degregulation.

You mean socialist government?
Why do so many "progressives" like to use fascist when fascists are socialists and so are "progressives"?

Computers were going to create a paperless society
Remember?

You ad hominem attacks are unclever, thus quick to bore.
Your post was precisely "Why then must Detroit be dragged kicking and screaming into the 21st century by federal edict, demanding that they give the public what we say we want?" You do make the claim that government (your "federal edict") knows best. That you cannot comprehend or remember your own words is your distinct problem.


CAFE is Not the Ansewer
“Must Detroit resist legislation that's obviously in its own good, to the point where the Big Three are all dead as a dodo?”

CAFÉ legislation is NOT in “Detroit” (or Toyota’s) best interest. “Detroit” opposes it because the legislation is not grounded in facts, logic, or science. CAFÉ historically has not worked as intended. The doubling of auto MPG in the last few decades has mostly resulted from a series of incremental enhancements…including lighter materials, drag coefficient reduction, electronic fuel control, etc…No step-ahead technologies have been placed in production. More CAFÉ will likely result in more of the same. There is no evidence that suggests that higher CAFÉ’s will reduce gasoline demand significantly in the long run.

Neither Congress nor “Detroit” have proposed a plan to directly REDUCE gasoline use in motor transportation. So, here is my proposal:
Congress should set a goal of reduction of gasoline in motorized transportation to 20% of all liquid fuels consumed by 2030.
Since the best current substitutes for gasoline are electricity and biofuels, Congress must support its legislative goal with appropriate research funding and a matrix of financial incentives/penalties targeted at both manufactures and consumers. The incentives should be fine tuned each year to efficiently encourage a dramatic increase in the consumer purchase of plug-in-flexible-fuel hybrids…which mostly run on electricity but have range extending liquid/fuel-cell powered generators.

Expanding CAFÉ will likely make matters worse. The goal of Federal Policy should be to DIVERSIFY transportation fuel away from gasoline in a significant way (ie…gasoline becomes a niche fuel). The optimal way to stimulate diversification is to directly support (via research and incentives/penalties) the alternatives…electricity and biofuels.

Congress should eliminate CAFÉ from the energy bill and enhance provisions that directly support fuel diversification. We should be thankful to “Detroit” for trying to save our country from ineffective/harmful Congressional policy.

stephen vs. reality
Stephen makes the claim that industrial energy efficiency hasn't improved.

Nothing could be further from the truth.

As usual for Stephen, he finds it impossible to imagine that industry could ever do anything good, unless forced by govt.

I am looking at the data, and I don't see what you want to see
Or society has taken a turn for the worse since deregulation?

Where?

Politics or Production?
"Top Toyota executives are concerned that the carmaker may have built too many U.S. factories, in part to build political support by providing new jobs in lots of places. And although Toyota’s U.S. sales continue to grow, these executives worry about an uncertain outlook."

"For Toyota, building factories in the U.S. has served as a way to win goodwill in the face of public rancor over the role played by foreign automakers in the decline of the American auto industry; twelve years ago, President Bill Clinton placed 100 percent tariffs on Japanese luxury cars as the U.S. and Japan battled over auto exports; and in the 1980s, Ford workers smashed Japanese cars with sledgehammers, blaming them for lost jobs. Since then, Toyota has won over not only consumers but also local politicians in part by building new U.S. plants and hiring American workers."

"In Japan, most of Toyota’s factories are all in a single place: Toyota City."

"Yet Toyota being Toyota, the automaker already has a manufacturing strategy that it hopes will help curb some of the costs. For instance, according to the WSJarticle, “Toyota has developed a shorter assembly line that can churn out a dozen different cars nearly simultaneously, on the same line — one every 50 seconds, one of the fastest production speeds in the world.”"

http://news.thomasnet.com/IMT/archives/2007/06/toyota_putting_breaks_on_united_states_plants.html?WT.mc_t=blg&WT.mc_n=blg0607&channel=email

The jist of "CAFE Paradox" is that regulations are ineffective.

From the article above, Toyota appeased the US politicians to gain market share at the expense of a cheaper product.

US regulations inhibit importation of automobiles that meet EU standards.

Politics are more important than providing a quality product at a resonable price.

Bill Gates found that out the hard way.

Lobbyists on K street fight for preferences and fight to be left alone. Sounds too much like the classic protection racket, pay me $500/mo and I won't break your windows.



and your evidence that the US is fascist is?????
I mean real evidence, not your paranoid fantasies.

That would only work in an environment where consumers cared about mileage
...

you can always count on a socialist to provide answers that result in the loss of other people's fre
to Stephen, every solution requires restricting what other people are allowed to do. To stephen, other people are too stupid to know what is good for them, therefore stephen must be given the power to tell others what to do.

you have to know
that in whatever perfect world Stephen envisions, he, and people like him, will still have all the transportation that they need.

It's always someone else who has to be restricted to make Stephen's life easier.

reality check
These numbers started back in the 70's. Long before there were any Hummers.

Additionally, the vast majority of automobile crashes are between one car and a fixed object. The second largest is between two cars of the same size. Collisions between vehicles of differing sizes are a distant third and include motorcycles and semis.

like most liberals
roy and stephen are absolutely incensed that people are actually allowed to do things and believe things, that liberals don't agree with

as usual, there is no truth in roy's pronouncements
Fuel efficiency has absolutely nothing to do with it.

The reason why Detroit is loosing sales is because they have earned a reputation for making overpriced, poorly built products.

As to innovation, it's hard to innovate when you have to deal with the union.

I also love the way that roy assumes that he knows someone else's business, better than they do.

But then, that SOP for most liberals.

roy's reading comprehension is so bad, that he can't even read what he wrote
you declared that govt is needed to get Detroit to do what is in Detroit's own interest. That is most definitely a "govt knows best" argument.

speaking of doctrinaire idiocy, that buzzing in your head has made you deaf to any argument you don't want to hear.

like most liberals, bob declares that reality must conform to his ideology
and if it doesn't. Well he'll pass a law to require it to conform.

That and the obligatory claims that anyone who disagrees with him is nothing but an industry stooge.

Why?
Why? Defend your position? Isn't the direct evidence enough to cause you to at leat examine the possibility that perhaps with so many people on the planet a bit of regulation is needed?

The "good old days" were over centuries ago.

Nope
Bush (Sr) passsed the natural gas deregulation laws. They came into existance over the 90'[s and mot recently have come to fruition.

It's easy...
Just take everything that the Heritage Foundation says as spin. When they say "jump", just sit and see what that gets you.

Not quite right...
First, let me make it clear that In consider CAFE standards to be government interference and I am against them. However the author appears to makes some assumptions that are not borne out by reality.

I think that the author is improperly arguing that increased energy efficiences CAUSES an increase in energy usage. I disagree, for the following reasons.

First, just from my own experience, I know that the amoung of energy I consume is only loosely related to its price. I would drive the same number of miles whether gas prices were $1 a gallon or $5 a gallon. I drive for convenience, and do not decide where to go based on the cost of gas. I suspect that most Americans are similar. Thus, a more effecient car means that I would consume less gas. Period.

As another example, let's look at lighting. If I replace all of my lights with flourescent, rather than incandescent, I am not going to run out and double the number of lamps and overhead lights that I have just because my electric bill will drop! The amount of light I use is fixed, and thus the price does little to impact my usage.

However, even if one were to consider price effects, increasing fuel economy will not increase fuel usage for most Americans. Say I have $500 to spend a year on gas. If the government doubles the fuel econonmy standard, and my new car now gets double the milage it got before, then I can drive twice as far. But I am using the SAME amount of gas to get those double miles. What would drive me to increase my usage ABOVE the previous amount? The author provides no suggestion of why this is.

Similar arguments go toward electricity usage. If I am cash limited, and my electric bill goes down because of increased effeciency, I may be able to run more electric equipment, but only back up to my electric budget, which is basically the same amount of electricity.

Now, it is true that the amount of energy used may go up if the COST of energy goes down to reflect the lower demand in energy due to higher efficiencies, but I suspect that because the individual consumer is such a small part of the total energy consuming market, that this impact will not cause the consumption to increase to the same extent that it was decreased due to increased efficiency. Besides the fact that consumers like me are not sensitve to the cost of energy further diminishes this impact, and I suspect that ALL consumers are somewhat price insensitve, to some extent.

I think that the author is confusing growth with economy. Yes, energy usage has increased as effeciency increased, but this is not a cause and effect scenario. We use more energy because we have MORE things that use energy! The average houshold has bigger TVs (in more rooms), computers (with printers, scanners, etc), more air conditioning, air filters, video games, etc. etc. etc. Homes have many more electric appliances than they did 50 years ago. None of this is due to increased efficiency. There are just more THINGS that we all think we just have to have!

It is certainly true that there are distortions that result from government interference in forcing energy efficiency down our throats. However, I seriously doubt that INCREASED energy usage is a result.

Still, let me reiterate that I do NOT support CAFE standards.

-Bob

Certainly.
We have gone from a society with net savings to one with net debt.

Industrry and the (US) government are one and the same.
Don't you get that?

Too much for you to get, Mark
Sorry you are so close-minded

So you have no data?

Gosh darn those facts!
Nice post.

I like when reason and reality curtail the more emotional posts. You are absolutely correct that the rate of decline in fatalities is due to engineering.

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