February 3, 2009

A Downside To Dramatically Higher Mileage Standards

With Federal approval coming from the President himself, California is going to enact new, tougher mileage standards for cars in the state, on the theory that more fuel-efficient cars will produce fewer carbon emissions and therefore benefit the environment. Mostly, I think this is a good thing. But there are prices to be paid for that decision.

Vehicle selection will alter; vehicles will become more expensive. Passenger cars will become smaller and provide less utility in terms of moving people and stuff around. But these issues pale in comparison with the hidden costs of dramatically more efficient passenger cars. For instance, more people are going to die. There will be more traffic. Tax revenues will decrease. Urban sprawl will increase. Why? Because fuel-efficient cars will make driving cheaper unless the increase in efficiency is met with a significant increase in gas prices (think a return to last summer's $4.25 a gallon levels).

Oh, and thanks to increased traffic, while each vehicle on the road will produce less carbon monoxide and other carbon-based pollutants, there will be more cars on the road, and they will be there for longer. So it's questionable whether there will be a net decrease in pollution at all.

A better idea, if you ask me, would be to require upgrades to very low-efficiency vehicles, rather than insist on globally higher efficiency standards. The amount of gas not burned by upgrading a vehicle from 12 MPG to 14 MPG -- only a 16.67% improvement -- is significantly greater than upgrading an already-efficient vehicle to become even more stupendously efficient. If you took a 30 MPG vehicle and made it 40% more efficient, as the new California standard will require, it will get 42 MPG at the end of the process. Assuming a vehicle lifetime of 100,000 miles, the upgrade from the inefficient vehicle to being slightly less inefficient is 238 more gallons of unburned gas than making the already-efficient vehicle really, really efficient. (This was not my idea originally; it came from the sadly-defunct bobvis blog.)

Certainly, adding 40% to the 12 MPG vehicle would be even better than that. But the point is, it's the low-mileage vehicles that we need to be concerned with. They tend to be heavier, they tend to be older, they tend to be owned by people with less economic means to replace or upgrade them, and because of the way California's vehicle registration system works, they cost next to nothing to have their tags renewed (while you pay through the nose for a new car). This is not the right tax incentive to increase efficiency.

What's more, the kinds of vehicles we are talking about are, with the exception of SUV's used as passenger cars, the kinds for which use demand is relatively inflexible because these are mostly utility and working vehicles. If you had to spend less money on gas, you would be more inclined to take recreational trips. But if you're a long-distance cargo hauler, your arrival points and destinations are set for you by your customers, not by your personal desires, and so the savings in fuel cost will become reduced overhead and higher profits. (Which maybe you spend on recreational trips in a less cumbersome vehicle to drive up to the mountains for a picnic, but maybe you buy a big-screen TV instead.)

Which brings me to the subject of big-rig trucks. Moving freight on tractor-trailer rigs is the whole reason we have interstate highways to begin with and trucks are the only way to get cargo from distribution centers to their ultimate destinations. They are horribly inefficient -- maybe five and a half miles to the gallon of diesel. Consider, then, what a 3% improvement in efficiency would do -- over the course of that same 100,000 miles (maybe one year's worth of long-haul trucking) that's 530 gallons of diesel fuel saved. How much carbon not put into the atmosphere is that?

So the point of all this is -- it's easiest for car manufacturers to make small, light cars more fuel-efficient. But that's not where the work needs to get done, and there are hidden costs we have to pay for hyper-efficient small passenger cars. If we really want to have an impact on our collective carbon footprint, mandating, say, a 5% increase in efficiency for heavy- and medium-duty trucks and a 10% increase in efficiency for light-duty trucks and SUV's, and leave passenger cars that get over 20 MPG alone completely, we'd be much better off than a 40% increase in efficiency for all vehicles.

Like I said above, this is better than doing nothing. I don't want to let the perfect become the enemy of the good. But at the same time, it makes a lot of sense to point out how the policy can be improved.

4 comments:

DaveBuck said...

Great set of points. My concern is that anyone attempting to point out these ideas may be dismissed as an enemy of the environment.

How do we get people who are very concerned about the environment to realize that small, very high-mileage vehicles may have some serious adverse effects on our environment and communities and health?

How do you convince others that high gas prices have some benefits.

trumwill said...

The number of SUV's and minivans used as passenger cars for a significant portion of the time is a pretty non-trivial figure. There are times when you need heavier-duty vehicles to transports stuff or carseats or whatever, but for convenience sake, a lot of families get two such cars rather than coordinate with one or have one that they use the extra capacity relatively rarely.

I think convincing people to downgrade when possible ought to be a point-of-attack as well. Two SUV/Minivans to one. One to none. Four-door sedan to two-door subcompact. Two-door compact to motorcycle. And so on.

Transplanted Lawyer said...

Great points.

Dave, I don't think we can convince the public that higher-priced gas has an upside. But I think we can convince them that upgrading low-mileage vehicles should be the top priority. Getting some friendly faces to do the math makes sense.

Will, I think you're right, too, that two-SUV families should and can be convinced to "switch" (I'd say "switch" rather than "downgrade") to having at least one much more efficient vehicle. TV shows can role model behavior; political and social leaders can suggest 'goals.' They'd save money and be doing a public service.

What it takes is the right advertising pitch. Let's think on that some more.

trumwill said...

I'm not convinced that it won't require more coercive (err, "incentive-based") government action, but we'll see.

The market definitely has a role to play in all this, though. In my part of the country, I've seen at least a couple fleet-rental outlets. Where they keep a fleet of cars and you can very conveniently rent one wherever you want and pay by the mile, hour, and/or day. They're pitching to people that don't need a car often enough to justify buying one but want one frequently enough that renting a car each and every time they do need one is inconvenient and cost-prohibitive.

It's a neat idea that could encourage people to get a motorcycle and rent the car when they need it or a car and rent a van and so on.