CAFE is not the only option, nor even the best

In Gregg Easterbrook's TMQ today, in which he argues in favor of raising CAFE standards, unfortunately, misconstrued the position of the auto industry, made some statements which were not true, and left out some very important information.

Items where he is incorrect:

• "Now, the U.S. automakers claim a one-third improvement can't be done." The U.S. automakers do not claim this at all. His quote from Mr. Wagner was taken out of context. The automakers claim that it cannot be done without significant increases in the cost of a car or with significant decreases in another area that consumers value more highly.
  
• "It's not that Detroit cannot achieve better fuel economy - it's that Detroit doesn't want to." It's not U.S. automakers who do not want higher fuel economy; it's the consumers. Consumers consistently put fuel economy at the bottom of concerns, well below performance, perceived quality, perceived safety, price, and styling. Excluding the Toyota Prius, very few hybrids have been able to sell well in an open market. Even the Prius itself is not immune to this. When asked why they selected a Prius, more Prius drivers chose styling ("What it says about me") over fuel economy.

He is also critical of the idea that CAFE standard increases will reduce safety; however, a recent study by the IIHS in 2007 shows a correlation of about 250-500 fatalities per year per MPG increased. The Harvard Center for Risk Analysis presented a study this year that indicated that 2,200 to 3,900 additional motorist fatalities per year can be attributed to existing CAFE standards.

Reducing fossil fuel use, CO2 emissions, and oil use in particular are worthy goals. However, the focus has long been on the automotive industry, despite the fact that cars produce less than 20% of the nation's greenhouse gas emissions, being dwarfed by agriculture and energy production.

In looking at reductions of CO2 and fossil fuel use, we should do so with an eye towards doing so in the most economic methods possible. The big hole in CAFE increases is the cost it would apply to consumers and to the economy. Certainly, fuel economy can be easily increased by 1/3 by moving exclusively to diesel hybrids. Doing so, however, would add about $7,000 to the price of a new car. The FTC released a study suggesting that the total cost to the economy of CAFE increases would be approximately $3.6 billion a year.

Instead of taking aim at the auto industry, spending billions of dollars a year, and destroying tens of thousands of American jobs, we should first look at the areas where we can make a difference and do so in a net cost-savings approach. Replacing all incandescent light bulbs with compact fluorescent, for example, would reduce household electricity use by 7% and would pay for itself inside of two years. Mandating that all new thermostats sold be programmable and come pre-programmed to reduce energy usage could dramatically reduce the costs of heating and cooling and would quickly pay for themselves. Use of household geothermal heating/cooling and passive solar heating where appropriate can dramatically reduce the costs of heating and cooling and are net cost savers. Mandating carpools lanes on all of the nation's highways of 3 or more lanes would dramatically reduce the number of cars on the road and the total miles driven while saving money.

The $3.6 billion a year could easily be spent on a variety of alternatives: creating a hydrogen-power infrastructure to facilitate the move to fuel cells, researching carbon sequestion methods to pull carbon fro the atmosphere, creating battery research initiatives to make electric cars practical, purchasing enough private, approximately 300 MW worth of home solar panels installed each year (based on household costs of about $11,000 per kW), or approximately 1 GW worth of wind turbines (based on costs of approximately $9 million for a 2.5 MW turbine and applicable infrastructure) installed each year.

In short, the auto industry produces less than 20% of greenhouse gases but is expected to shoulder 100% of the burden for reducing greenhouse gas emissions. Instead of making the auto industry the bad-guy, common-sense and cost-savings solutions are available to dramatically cut the problem with no net cost to the American economy or to U.S. jobs.

Oh Ye of Little MPG
Tuesday Morning Quarterback for ESPN

Recently, the CEOs of Chrysler, Ford and General Motors launched with Senate leaders, telling them the one-third vehicle mileage increase proposed by George W. Bush and Barack Obama - you heard that right, Bush and Obama have offered nearly identical fuel-efficiency plans - was impossible. Rick Wagoner, CEO of General Motors, said at a news conference after the lunch that a one-third mileage improvement "doesn't look achievable." This is exactly the kind of excuse-making that allowed Honda and Toyota to wrap their hands around the Big Three's necks in the first place! As the UAW-Detroit contracts talks heat up, the relationship between mpg and saving Chrysler, Ford and General Motors bears exploring.

The National Academy of Sciences said in 2002 that a one-third improvement in mpg is practical using existing technology, and without sacrifice of safety or passenger comfort. Now, the U.S. automakers claim a one-third improvement can't be done. It's not that Detroit cannot achieve better fuel economy - it's that Detroit doesn't want to. What the current executive-suite suits at the Big Three want is to maximize their bonuses and stock options during their short stays at the top, then let somebody else take the blame for the net round of decline of the U.S. auto industry that is inevitable if fuel economy does not improve. And that's setting aside the national-security implications. A one-third increase in car and SUV mpg is what's needed to break U.S. dependence on Persian Gulf oil. Wouldn't it be nice if Detroit CEOs acted as though they cared about national security!