Raising the CAFE standards

It\’s one of the more stupid parts of the American political compromise. The CAFE standards that say what mileage cars must have.

The new corporate average fuel economy (CAFE) standards will increase from 2017 at 5% annually for cars and 3.5% for light trucks through 2021, with an overall target of a fleetwide average of 54.5 miles per gallon by 2025. Current standards were set at 35mpg by 2016 in 2008, when the auto industry was in a compliant mood after a $50bn government bailout.

There\’s a much, much, better way of doing this. Simply stick $1 on a gallon of gas as a federal tax and be done with it.

Blimey, the whole place is crying out for revenue, at least half of them have gone enviro-mental and a tax is hugely less distorting than this sort of nonsensical regulation.

Plus, of course, there\’s absolutely no proof that higher MPG will reduce gas usage. Jevon\’s Paradox you know, it makes driving cheaper so perhaps people will do more of it?

You need to make driving more expensive: thus a tax.


4 thoughts on “Raising the CAFE standards”

  1. Yes, but raising gas prices in the USA is the same political suicide as deliberately reducing house prices here.

  2. “and a tax is hugely less distorting than this sort of nonsensical regulation.”

    “Less distorting” in what sense? Isn’t the whole stupid point of Pigovian taxes to create distortion?

    If you want to enforce an outcome, regulate. Use the jackboot of the state to stamp on peoples’s faces. That’s what it’s for. Don’t do all this slimy tax gathering rubbish.

    You think it’s the job of the State to tell people how many miles per gallon their cars should do, okay. But at least be fucking honest about it.

  3. As one commentator said, this plan to force people to buy cars with higher mpg when there is clearly little demand for them is a bit like the government trying to reduce obesity rates by only allowing the sale of small-sized clothes.

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