Tuesday, May 02, 2006

CAFE Standards

Currently the U.S. is the world leader in oil consumption. The CAFE (Corporate Average Fuel Economy) standard is defined as the the minimum mileage per gallon a vehicle class must meet. In todays life styles people are buying and driving bigger cars. The average new fleet of cars had a mpg lower than the one we had in 1987 because of the fact that our automobile industry is seeing an increase in inefficent SUV's and light trucks. President Bush proposed that we need to break the light tuck category up into six different sub-categories. In these differrent categories there was trucks ranging from 21 mpg to 28mpg. Due to the recent increase in the price for oil Presedent Bush has jumped in to help. From the knowledge that I posses about the prices for a barrel of oil and the increasing gas prices I wouldnt be supprised to see gas over $4 this summer. Pesident Bush's has taken the action to ask Congress for the authority to investigate an increase in the CAFE standard. In 1990 there was a bill that was called for that would increase the CAFE standard by 40%, and if this bill was made into a law cars right now would average 40mpg and light trucks 29mpg. From the auto industries point of view since cars have to become lighter and smaller the costs of of re-enginering cars to make them more fuel efficent is expensive. By trying to reduce the weight of vehicles it reduces the size of steel content which has resulted in a 1300-2600 additonal trafic fatalities. Form an environmentalists point of view in the 80's cars were more fuel efficent, as for now cars cars have become 20 percent heavier. From another point of view as an economist mandating pollution controls is a good idea.

1 comment:

Robert Carmichael said...

CAFE Standards - A big waste of time.

On CNBC today, I watched a liberal Democrat from San Francisco and a conservative Republican argue about whether or not we need to mandate higher fleet gas mileage standards for auto companies. What a huge waste of time and money, when we all know that the world is running out of cheap fossil fuel. Why torture our pathetic car companies? They would need to retool their production lines to meet these new standards. Wouldn't we be smarter to let them use that money to patch up their under funded pensions? If we push these under achieving car companies into bankruptcy their employee's pensions will be paid by the rest of us.

I think we should show the car companies some compassion. Isn't this the corporate equivalent of taunting a mentally handicapped person? We went through this same situation with the car companies back in the 70's and 80's and they were not able to learn from their mistakes.

I will try to speak slowly for those of you who still work for the car companies.

The Jevons Paradox says that you can't extend the life of a limited resource by improving the economy of it's use.

In his 1865 book The Coal Question, Jevons observed that England's consumption of coal soared after James Watt introduced his coal-fired steam engine, which greatly improved the efficiency of Thomas Newcomen's earlier design. Watt's innovations made coal a more cost effective power source, leading to increased use of his steam engine in a wide range of industries. This in turn made total coal consumption rise, even as the amount of coal required for any particular application fell. - Wikipedia

Oil and gas are limited resources. We cannot extend the amount of time they will be used by forcing people to drive small cars. The era of the internal combustion engine is over. Should we really spend time on a problem that will soon be handled by the market? Liberal Democrats are constantly trying to adjust the laws of nature, a process that just never works.

Here is my plan.

1) Stop adding or eliminating taxes on gasoline.
2) Stop forcing consumers to buy energy efficient cars and trucks to conserve gasoline.
3) Take a nap, while the market takes care of the problem.

I thought hydro-carbons were causing climate change? ( another brilliant idea from liberal Democrats) Why should we be trying to conserve such an evil resource?

Bob Carmichael