Wednesday, August 29, 2012

54.5 MPG by 2025?

Achieving such a standard in 12 years seems ambitious given that this is roughly double the average MPG of 2011, but this is what new regulations put forth by the US EPA and Department of Transportation are aiming for. The true average fuel economy will be around 40 MPG because auto manufacturers can earn credits by selling alternative fuel vehicles and the standards only apply to cars, not trucks.

Read about it here at CBS News and here from the NHTSA.

Excellent source of basics on CAFE standards FAQ here from Edmunds

Massive detail and analysis here from US EPA

The guys at Freakonomics have a nice description of why standards such as these are often less desirable than taxes.  This is a topic that we're going to spend a lot of time with this semester.

CAFE Standards (Corporate Average Fuel Economy) originated in 1975 in response to the 1973 OPEC oil embargo. Here is a brief history of CAFE standards from PEW

Here are some basics on CAFE standards from NPR

Here is a consideration of unintended consequences of more fuel efficient vehicles.

Like most issues that we'll discuss in class, this one is controversial.

Some argue that the new, higher standards will create jobs (full report here).

Other argue that higher standards will cost jobs.


Craig Y said...

I’m not a fan of these types of meddlesome regulations. If there was a true need or want for cars with better fuel efficiency then you would see more car companies making them. By forcing car companies to make cars that consumer’s don’t want you are forcing car companies to make less of the cars that the consumer actually wants to buy, intern making them more expensive as well. How long before the consumer is told what kind of car he/she can buy?

Dr. Peter Schuhmann said...

This is not the place for personal opinion. Please be objective. By labeling the standard as "meddlesome", you reveal your personal bias. Can you present some evidence that consumers don't want fuel efficient cars? Can you honestly say that you think that the US gov't would ever "tell people what kind of car to buy"?

Dr. Peter Schuhmann said...

Just a quick note... I'm not picking on Craig here. He's a very strong student and I know that he knows his stuff. He just happens to be the first student who answered with opinion rather than objective response, so he's taking one for the team. Again, it's important to have opinions, but I want to see what you know, not what you think you know.

Craig Y said...

My apologies for showing my personal beliefs.

I just feel that if the demand for these types of vehicles were there the companies would send more of these cars to the market. It seems to me to be an example of law of supply. Higher demand results in a higher price intern equals higher supply. There really could be a demand but by speeding up the process companies might not be able to develope a car that is appealing enough to the buyer.

Craig Y said...

This is more about the lack of the car selling and some of the ones being sold are from trade-ins of other low-MPG vehicles.