August 29, 2005


The Washington Post chastises the Bush administration for not drawing up stricter automotive efficiency standards. I hate to break from the environmental happy-talk here, but what's the point of these standards again? Say you have two families, the Smiths and the Browns. The Browns own a big honking SUV, but drive it rarely, and usually bike to work or take the public transit. The Smiths drive a little wiener of a car, but take it everywhere—the supermarket, the neighbors, down the driveway to the mailbox. Obviously you want to penalize the Smiths' behavior, not the Browns. Stricter CAFE standards for big vehicles wouldn't do that. We want to decrease total oil consumption, right? So just tax that. Yeah it would be regressive, but means-tested rebates could ease the pain. And gas taxes wouldn't be as prone to lobbyist-poked loopholes as fuel-efficiency standards quite obviously are. Meanwhile, I worry that more efficient cars would just convince people to drive around more, negating the benefits.

Maybe there's more to it than that, and I'm not saying fuel-efficiency standards are a bad thing—quite the opposite; no reason not to raise them—but they still seem like a very roundabout way of achieving a given goal. Perhaps that's the point—they allow Congress to raise gas taxes without actually raising gas taxes. On the other hand, gas taxes would in theory change behavior right now, if they changed behavior at all, whereas fuel-efficiency standards would take years and years for the effects to be felt (since people won't all buy new cars right away). On the other hand, color me skeptical that a gas tax would change people's driving habits much in the short term, so this might just end up inflicting a lot of unnecessary pain...

UPDATE: Ah, I see this is Andrew Samwick territory. His post here, in particular, is instructive: neither CAFE standards nor a gas tax would have a significant impact on the nation's oil consumption, and any gas tax would have to be pretty steep to have any effect at all (around $1 a gallon, which would cause a lot of pain indeed.

DOUBLE UPDATE: Ezra Klein makes the case that gas taxes would just inflict unnecessary pain on the poor, and that better fuel-efficiency standards are still the way to go. His points look pretty convincing, even if they're not quite as elegant from an economic standpoint. Plus, there are probably no decent ways to design those gas tax rebates.
-- Brad Plumer 4:30 PM || ||