The right CAFE number for 2025 may well be 54.5 miles per gallon.
Heck, let's go crazy and round up to 55.
A fine number.
The wrong CAFE number is today's. Instead of some pathetic number
in the 20s, fuel economy in 2011 should be 40 mpg or higher.
But because for three decades the federal government did absolutely
nothing with corporate average fuel economy standards, we are about to embark on
a costly and economically dangerous escalation of mandates.
How dangerous? CAFE determines winners and losers. It opens and
closes plants. It has unintended consequences.
The creation of CAFE in 1975 required Detroit automakers to more
than double their effective mpg to 27.5 in a decade. Japanese automakers,
specialists in small cars in their home country, had to change hardly at all.
The result: A generation of hastily developed and lousy
front-wheel-drive cars from Detroit competing with nifty, high-quality cars from
Japan.
General Motors, always a good citizen, downsized its big cars, only
to be crushed when gasoline prices dropped back. The Japanese had room to
develop new generations, even new brands, of higher-value, lower-mileage
vehicles.
An unintended consequence was the blossoming of "trucks," which
were under a lower CAFE standard based on "feasibility," into mainstream
passenger vehicles, killing the station wagon/car and burning a lot of gas.
Certainly, CAFE was not the only reason the domestic American
automobile companies nearly collapsed three years ago, but it was a contributor.
Doubling fuel economy over time is a good idea. Forcing the
doubling in a decade is a bad idea.
Imagine if the original law had called for modest annual increases
in CAFE. Yes, it would have taken longer for cars to get to 27.5 mpg. But then
the bar would have risen predictably to 28 and 30 and 35 and 40, with very
little disruption and dislocation.
What happened instead in the lost decades between the late '80s and
late '00s was that tremendous gains in fuel efficiency were poured entirely into
performance: The average vehicle gained 1,000 pounds and 100 horsepower while
CAFE stagnated.
Of course, a proper energy policy for America would require
substantially higher gasoline taxes so consumers have an actual reason to care
about fuel economy. But our Congress has never had the nerve to do the right
thing there.
For this new standard of 54.5 mpg, the Japanese automakers opposed
the Obama administration's sweetheart deal for big pickup trucks. Big pickups
will have to improve much less quickly than other vehicles. And big pickups are
the domain of Detroit.
I'm sure this isn't payback for what CAFE did to Detroit. But the
Detroit 3 are in a more defensible spot today than they were in 1975.
Industry executives who swallowed their objections and stood
smiling with the President on Friday to support the new standard have a tough
job ahead. Cars will be more expensive. Some high-mileage cars may, like those
early-'80s GM X-cars, be less appealing.
Of course, car companies can't really blame the government for
flatlining CAFE. They squealed every time the subject came up, and Congress and
presidents rolled over.
We as a society have allowed -- even insisted on -- a dysfunctional
energy policy and weak command-and-control fuel-economy standards.
Now we'll see how vehicle sales and automotive employment survive a fast
doubling.
Contact Us
Contact Us and buy your dream car TODAY!
|