Automotive Forums .com - the leading automotive community online! Automotive Forums .com - the leading automotive community online!
Automotive Forums .com - the leading automotive community online! 
-
Latest | 0 Rplys
Go Back   Automotive Forums .com Car Chat > Cars in General
Reply Show Printable Version Show Printable Version | Email this Page Email this Page | Subscription Subscribe to this Thread
 
Thread Tools Search this Thread
Old 02-06-2004, 04:02 PM   #1
Bruce Levinson
AF Enthusiast
 
Join Date: Jun 2003
Location: Washington, DC, Washington DC
Posts: 122
Thanks: 0
Thanked 0 Times in 0 Posts
The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

The Heartland Institutes reports on a new study by the Congressional Budget Office that pegged the cost of hypothetical higher CAFE standards at $3.6 billion per year with consumers paying an "extra $2.4 billion a year and the auto industry another $1.2 billion." Furthermore, CBO explained that "[h]igher CAFE standards could ... reduce social welfare by worsening traffic congestion and increasing the number of traffic accidents. That undesirable outcome could occur because higher CAFE standards would lower the per-mile cost of driving, providing new-vehicle owners with an incentive to drive more."

Thus, the cost of increasing new vehicle fuel economy by about 10% could well be not just a ffinancial cost, but also more traffic jams, accidents, and, of course, the associated waste of fuel and increased air pollution.

Read Heartland Institute story

Read CBO Study
Bruce Levinson is offline   Reply With Quote
Old 02-16-2004, 01:20 AM   #2
2strokebloke
In Stereo where available
 
2strokebloke's Avatar
 
Join Date: Mar 2003
Location: next to a ditch, Colorado
Posts: 4,481
Thanks: 0
Thanked 1 Time in 1 Post
Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

The only thing that could cure traffic congestion is smarter drivers, and smaller cars. And I doubt the new CAFE standards would somehow both make drivers stupider, and vehicles larger.
I couldn't get the CBO document to load, though - maybe there is a logical explanation, as to how this could be possible.
__________________

Support America's dependence on foreign oil - drive an SUV!
"At Ford, job number one is quality. Job number two is making your car explode." - Norm McDonald.
If you find my signature offensive - feel free to get a sense of humor.
2strokebloke is offline   Reply With Quote
Old 02-18-2004, 10:56 AM   #3
Bruce Levinson
AF Enthusiast
Thread starter
 
Join Date: Jun 2003
Location: Washington, DC, Washington DC
Posts: 122
Thanks: 0
Thanked 0 Times in 0 Posts
Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

I'll be glad to e-mail you the CBO study, its worth reading. The idea that higher fuel economy could lead to increased congestion has nothing to do with drivers being "stupid." The basic premise is that people consume relatively more of a good or service when the price i slower. Thus, if the price of a mile of driving declines, people will drive more miles.
Bruce Levinson is offline   Reply With Quote
Old 02-18-2004, 05:35 PM   #4
2strokebloke
In Stereo where available
 
2strokebloke's Avatar
 
Join Date: Mar 2003
Location: next to a ditch, Colorado
Posts: 4,481
Thanks: 0
Thanked 1 Time in 1 Post
Re: Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

Well, generally speaking, traffic jams are caused by "stupid" people, it has nothing to do with what kind of vehicle they have, just how they are driving it.
The size of a traffic jam however is somewhat related though, to the size of the vehicles in that traffic jam, I'm sure you'd agree that a traffic jam of say 250 schoolbusses would takes up a much larger chunk of highway than a traffic jam of 250 Geo Metros.
As for the idea that high fuel economy leads to increased congestion - take a look at other countries that have a higher ammount of smaller cars, and motorcycles etc. as compared to the U.S. which has few motorcycles, and more larger cars. Most of them don't drive any more than we do here.
__________________

Support America's dependence on foreign oil - drive an SUV!
"At Ford, job number one is quality. Job number two is making your car explode." - Norm McDonald.
If you find my signature offensive - feel free to get a sense of humor.
2strokebloke is offline   Reply With Quote
Old 02-19-2004, 10:53 AM   #5
Bruce Levinson
AF Enthusiast
Thread starter
 
Join Date: Jun 2003
Location: Washington, DC, Washington DC
Posts: 122
Thanks: 0
Thanked 0 Times in 0 Posts
Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

Please note that I said that as "the price of a mile of driving declines, people will drive more miles." Thus, one key factor driving (pardon the pun) miles traveled is the cost of driving each mile and changes in that cost. Leaving all other factors constant, increasing fuel efficiency will decrease the cost per mile driven and thus increase total miles traveled. This is known as the "rebound effect."

You raise the issue of miles traveled in other countries and compare it with the U.S. - a relevant issue. It should be noted, however, that in many other countries, the cost of gasoline is significantly higher than in the U.S. The higher cost of gas dampens demand for travel.

If the US were to couple a higher gas tax with higher efficiency, then the rebound effect could be offset and, depending on the specific increases in taxes and efficiency, there might be no increase in travel. In fact, higher gasoline taxes could lead to increased fuel efficiency without new regulations - but at a substantial cost. The problem with higher gas taxes is multi-fold. There are substantial social costs associated with fuel taxes since they are highly regressive, falling the hardest on consumers with the least income. These consumers already spend a greater percentage of their income on commuting and are less able to afford new vehicles. There are also other significant economic issues (job losses, etc.) and safety concerns associated with higher fuel taxes.

Overall, the inter-relationships between fuel economy, the national economy, traffic congestion, the environment and other issues we have discussed is highly complex. We need to be very careful when changing national policies that we do not create more problems than we solve. As in medicine, the first principle of regulation should be to do no harm.
Bruce Levinson is offline   Reply With Quote
Old 02-23-2004, 05:55 AM   #6
savage_with_wrench
AF Newbie
 
Join Date: Jan 2004
Location: London (FPO)
Posts: 10
Thanks: 0
Thanked 0 Times in 0 Posts
Re: Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

Points very well taken. There is a cost associated with every move. Would you argue that drivers are living in a false economy? Gasoline has not historically risen in cost proportionately to overall cost of living increases since 1920. While it is true that fuel is an ecomony of scale, the net effect on the driver's pocketbook is the same. Couple cheap gasoline with the low amount of maintenance that is required on newer vehicles and cost per mile is the lowest it has ever been on a real(not nominal) dollar basis. A final note is the inelastic cost of ownership in purchase price. No matter how many miles a person drives, their car payment remains the same.
The solution? Use federal gasoline tax increases to provide subsities for alternate and high efficiency vehicles and fund mass-transit infrastructure improvements. In areas where traffic is a significant problem the mass-transit must be significantly faster than traffic - not city busses - high speed trains and subways. In London it is the only way to get around town because a car takes many times longer and parking is cost prohibitive.
savage_with_wrench is offline   Reply With Quote
Old 02-23-2004, 11:45 AM   #7
Bruce Levinson
AF Enthusiast
Thread starter
 
Join Date: Jun 2003
Location: Washington, DC, Washington DC
Posts: 122
Thanks: 0
Thanked 0 Times in 0 Posts
Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

Your idea of using fuel taxes to subsidize higher efficiency vehicles and mass transit is an intriguing idea and one deserving of consideration and careful analysis. However, although this brief response is not a subsitute for detailed analysis, please let me point out a few issues for consideration:

1. Mass transit, although certainly an essential part of an overall national transportation policy, has a number of limits. For example, mass transit is best suited to large urban and suburban areas. London (or New York) is a perfect example. However, many people live in smaller cities and less densely populated areas. In such areas, although there may be some public bus service, mass transit is not going to be able to meet the needs of many people. Furthermore, the average income level in these smaller and/or more rural areas is often lower than in major cities. Does it really make sense to raise taxes on a real estate sales agent (or grocery clerk, etc.) in Iowa in order to increase to transportation subsidies for a stockbroker in New York?

2. Mass transit is best suited for point-to-point commuting, such as home to office and back. However, famlies are increasingly faced with more complex transportation patters, such as home to day care to work to day care to soccer practice to shopping, etc. Mass transit is not practical for many of these more complex commutes. Higher fuel taxes would thus work against many working families.

3. Manufacturers are responding to the market demand for higher efficiency vehicles by producing an array of hybrid and other innovative vehicle options. Furthermore, these new vehicles, which are starting to come on the market, will be available in an increasing number of sizes and models in the next couple of years. These advances are taking place without new taxes and subsidies simply because the market is demanding them. Experience has shown that advances in vehicle options and technology driven by market demand are going to be far more efficient and better meet consumer needs than those options and technologies mandated by the government.

4. Increasing subsidies for more fuel efficient vehicles may be useful to some middle class and upper middle class consumers (assuming that those vehicles qualifying for the subsidy meet their needs). However, even with significant subsidies (other than near-100% subsidies) those new vehicles will be out of the economic reach of many lower income consumers. Thus, the result of higher fuel taxes could well increase the taxes on the working poor in order to subsidize new cars for their better off neighbors.

Overall, you certainly raise an important issue with respect to increasing fuel taxes, but it does need careful study. I look forward to learning your views.
Bruce Levinson is offline   Reply With Quote
Old 02-24-2004, 04:00 AM   #8
savage_with_wrench
AF Newbie
 
Join Date: Jan 2004
Location: London (FPO)
Posts: 10
Thanks: 0
Thanked 0 Times in 0 Posts
It is true that mass transit wouldn't help congestion in smaller communities, but rural areas do not suffer from congestion like metro areas. You are also right that it wouldn't be fair for someone in a rural area to subsidize an urban dweller, but even if federal fuel prices were tripled (increasing fuel prices by $.368), the average person's gasoline costs would increase by only $23. (1250 mi/mo / 20 mi/gal x $.368=$23.00/mo) This cost is hardly oppressive. The benefit of increased fuel revenues would also allow improved rail service between metro areas. A national rail service is unlikely, but improved rail for areas like Boston-New York or San Diego-Los Angeles would save millions of wasted man hours every year spent in traffic and further improve air quality in these areas.
The subsidy for hybrid vehicles would be to make them competetive with the lowest cost segments(kia rio, hyundai accent, chevy metro). These are the lowest cost new vehicles for sale. Moving hybrid vehicles into this range would make them a viable alternative for middle class buyers,(poor do not buy a large number of new vehicles) instead of just the evironmentally conscious with extra money to spend. The idea is to push the standard gasoline vehicle out of the market and accelerate research and development in this area. I do not believe current market pressure is sufficient to get a large number of hybrid vehicles to market in a reasonable amount of time.
I am really glad that there are people in these forums that have something intelligent to say.
savage_with_wrench is offline   Reply With Quote
Old 03-02-2004, 04:11 PM   #9
Bruce Levinson
AF Enthusiast
Thread starter
 
Join Date: Jun 2003
Location: Washington, DC, Washington DC
Posts: 122
Thanks: 0
Thanked 0 Times in 0 Posts
Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

Quote:
Originally Posted by savage_with_wrench
I am really glad that there are people in these forums that have something intelligent to say.
Indeed, and you are most high on the list.

I would like to raise two issues with respect to your thoughtful discussion.

1) Distribution impact on “average” commuters. Although $23/month may not seem like much to many people, there are certainly lower income workers for whom it would be a significant sacrifice. However, even more importantly, that $23/month average is going to encompass a wide variance of actually tax increases on the auto commuting population. Certain categories of commuters in particular will be paying a higher than average amount including; worker who live in rural areas and have longer commutes, blue collar workers who need pickup trucks, vans, and other less fuel efficient vehicles and lower income workers who are driving older, less fuel-efficient vehicles. Although I certainly favor improved Northeast Corridor rail service (although Amtrak is actually doing a pretty good job right now), I seriously question whether the rural blue collar workers should pay a disproportionately large share of the burden. If we are going to increase subsidies for mass transit and intercity rail, it should be done through as fair and equitable a mechanism as possible.

2) Sufficiency of the subsidy. I would be curious to know as to basis for the suggestion that tripling the federal fuel tax would produce anywhere near the revenues needed to subside the cost of hybrid vehicles down to the Chevy Metro level. A large government subsidy for hybrid vehicles could result in demand for outstripping the funds available to pay for the subsidy. Furthermore, the large subsidy could result in some perverse outcomes, such a commuters who ditch mass transit in favor of government-subsidized cars. Furthermore, if the government was to subsidize large purchases of current generation hybrid vehicles, where is the incentive for automotive manufacturers to continue to improve their offerings?

Overall, however, you have raised important issues deserving of substantial consideration.
Bruce Levinson is offline   Reply With Quote
Old 03-24-2005, 01:30 PM   #10
J-Ri
AF Enthusiast
 
J-Ri's Avatar
 
Join Date: Dec 2004
Location: Shellsburg, Iowa
Posts: 3,218
Thanks: 8
Thanked 0 Times in 0 Posts
Re: The Cost of Higher CAFE Standards: $3.6 Billion/Year and More Traffic Jams

If all of the additional fuel taxes were used to fund mass transit systems in the area where the taxes were collected, I would be in favor of a tax increase.

I believe the best way to do that would be to have a government mandated tax imposed upon individual cities. If I buy my gas in Cedar Rapids, The money goes to the cities bus system. If I buy my gas in Fairfax, which doesn't have a mass transit system, there should be no additional tax on it. The busses would also have to operate 24 hours a day (but with a decreased number of stops and busses), as many younger people have jobs that start after school and end close to midnight (maybe busses in large cities do operate 24/7, but here they stop around 9, I think).

The families with complex commuting schedules is a very good point. There is really no easy answer for that, because a tax exempt system would need many employees to evaluate whether exemption should be awarded. I think the best answer would be carpooling. It's been around for awhile, and is not perfect, but it helps a lot.
__________________
'04 Cavalier coupe M/T 2.2 Ecotec
Supercharged 14 PSI boost, charge air cooler, 42# injectors
Tuned with HP Tuners
Poly engine/trans/control arm bushings
Self built and self programmed progressive methanol injection system
J-Ri is offline   Reply With Quote
Old 11-30-2005, 10:57 AM   #11
bugheman
AF Newbie
 
Join Date: Dec 2004
Location: Chicago, Illinois
Posts: 13
Thanks: 0
Thanked 0 Times in 0 Posts
Lightbulb

Ladies and Gents:
3 main points to ponder.......

1) If the CAFE avergage increases, it will either force automakers to design,market, and sell more fuel efficient cars or pay penalties for not getting it done.

2) Technology already exists to increase overall fuel economy by at least 5% already (i.e Chrysler DOD for their HEMI engines)

3) Is HYBRID the real way to go? It seems to me that what you save in gas, you will spend on batteries and electrical power maintenance. When was the last time anyone spent money on having a technician find, solve, and repair an electrical issue? How much fun was it?

PS Where are the diesels???????
__________________
Obstacles are what you percieve when you forget to focus on what to achieve.


opcorn:
bugheman is offline   Reply With Quote
 
Reply

POST REPLY TO THIS THREAD


Bookmarks
Go Back   Automotive Forums .com Car Chat > Cars in General

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 10:29 AM.

Community Participation Guidelines | How to use your User Control Panel

Powered by: vBulletin | Copyright Jelsoft Enterprises Ltd.
 
 
no new posts