A Wrong Turn on Saving Fuel

Which energy efficiency plans hold up to scrutiny?


Of all the ideas on how to combat global warming, few have more obvious appeal than producing cars that get better mileage. The Sierra Club says a boost in fuel economy standards "is the biggest single policy step" the government can take. Sen. Barack Obama, D-Ill., went to Detroit in May to advise the auto industry that this change would "help bring it into the 21st century." And last month, the Senate voted to require that each automaker's fleet of cars and trucks average at least 35 miles to the gallon by 2020.

Who could possibly object to cars that use less fuel? If any of us had a magic wand that would make our car go farther on a tank of gas, we'd dislocate our shoulders waving it every time we passed a sign advertising regular fuel at more than $3 a gallon.

Of course, we don't have a magic wand. But we assume Congress does. In a sense, that's true. Our lawmakers can command auto executives to do whatever is necessary to make their cars use less gas.

But the likely results of this particular mandate bring to mind the movie Bedazzled, in which a guy sells his soul to the devil in exchange for seven wishes—only to find that every time he gets a wish, it turns out to have a major catch. Asking to be rich and powerful, for example, he's transformed into a Colombian drug lord whose confederates are trying to kill him. Higher fuel economy standards, likewise, would have results that are not quite what we envision.

The first is that they won't reduce gasoline consumption much anytime soon. The reason is simple: The only vehicles affected by the change would be new ones. For the huge majority of motorists who keep their old cars and SUVs, the change represents a comfortable preservation of the status quo.

Under this measure, their vehicles will go on burning fossil fuels at the same rate for five or 10 or 15 years, until they pass on to that interstate in the sky. The owners will pay no price for continuing to churn out carbon dioxide with abandon.

The second is that among those people who buy the new, improved vehicles, higher mileage requirements won't actually discourage driving. Just the opposite. A driver who trades in a car that gets 20 mpg for one that gets 35 mpg will suddenly be more inclined to use her wheels even more than before, since the cost of any given trip is drastically lower. A 2002 study by the AEI-Brookings Joint Center for Regulatory Studies found that if Congress raised the fuel mandate to 35 mpg, the average new light truck "would log about 1,080 more miles per year."

The result will be more congestion and more accidents. The more people drive, the worse the traffic jams. The higher the number of cars on the road at any given moment, the likelier it is that one of them will run into yours.

Economists almost unanimously agree that if you want to cut greenhouse gas emissions by curbing gasoline consumption, the sensible way to do it is not by dictating the design of cars but by influencing the behavior of drivers. If you want less of something, such as pollution from cars, the surest way is to charge people more for it.

A carbon tax or a higher gasoline tax would encourage every motorist, not just those with new vehicles, to burn less fuel—by taking the bus, carpooling, telecommuting, resorting to that free mode of transit known as walking, or buying a Prius.

Many people are inclined to resist a higher gas tax because it would cost them money. What they overlook is that a law requiring cars and trucks to be more fuel-efficient would not come free, either. You wouldn't pay more for each visit to the pump. But you would pay more for a car. The Congressional Budget Office estimates that over time, a gas tax would cost 27 percent less than a higher fuel-economy mandate.

None of these inconvenient truths, however, got much attention from the Senate. Raising mileage standards has great allure in Washington because the price inflicted on consumers is hidden from view, assuring that no blame will fall on our elected leaders. But by now, we should know that when politicians offer something for nothing, it's the worst deal of all.