Michigan Lawmakers Prepare to Fight Possible Proposed Fuel Economy Standards

fuel economy standards, michigan fuel economy standards, white house fuel economy standards

Why can't we seem to figure out this gas mileage stuff?

Despite having a large portion of their state’s economy saved by the Federal Government’s auto bailouts, lawmakers in Michigan are preparing to express concerns and discontent over the White House’s rumored new fuel economy standards.  In case you’re not already aware, it is believed the White House will push CAFE standards to 56.2 miles per gallon (mpg) by 2025, nearly doubling today’s standards.

In an article entitled “Michigan Lawmakers Prepare Letter on Fuel Economy Rules”, published in the Detroit Free Press, Aaron M. Kessler writes:

It currently remains unclear whether the letter will specifically take on the 56 m.p.g. target by 2025 that the White House wants, or raise more generalized concerns.

As the Free Press reported Tuesday, Michigan’s congressional delegation gathered this morning to decide whether to publicly join the fuel economy debate. Michigan’s members of Congress had mostly remained silent in public as the negotiations have continued in recent weeks.

While this article seems to be rather ambiguous, if you read between the lines it’s obvious to see that the Michigan lawmakers will oppose the large raise in fuel economy standards, mostly because they will be inconvenient to some of the largest businesses in Michigan.

You see, state and local governments are not immune to being “persuaded” (read: in bed with) corporations, and will do whatever is in the company’s best interest.

Despite the fact I believe simply raising the fuel tax would achieve a greater reduction in fuel consumption, I’m still all for raising fuel economy standards.  Unfortunately, it appears that Michigan lawmakers will take the stance of going with neither.

What are your thoughts?  Should Michigan lawmakers oppose?  Are you tired of our governments putting the best interests of corporations first?  Leave your comments below or share this post via the social sharing buttons – especially Facebook and Twitter.

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Fuel Economy vs. Fuel Taxes – Which Will Do More?

fuel taxes, fuel economy, obama administration fuel economy

Which is better, higher fuel economy or higher fuel taxes? Image via Wikipedia

Here’s an interesting question: which is more likely to make you use less fuel, forcing you to buy a more fuel efficient vehicle or forcing you to pay a much, much higher fuel tax?

This is sort of a relevant question because there is news that the Obama administration is considering raising fuel economy standards for all cars and trucks sold in the U.S. to 56.2 miles per gallon by the year 2025:

The Obama administration is considering a fleetwide average of 56.2 miles per gallon for all new cars and trucks sold in the US by 2025, The Wall Street Journal reported late Saturday citing two people briefed on the matter said.

The proposal would roughly double current fuel-economy targets, and would likely raise the price of some cars by several thousand dollars.

Read more of this Fox News article by clicking here.

2025 is certainly a long way off, these new standards are certainly worth debating in the meantime.

While I think most of us would be willing to argue that reducing fuel consumption is certainly something we need to do, there are arguments that simply raising fuel economy standards isn’t the best way to go about it.

In an interesting article entitled Fuel Taxes vs Fuel Economy: Are Stricter Fuel Economy Standards a Good Idea? by Ed Dolan (published on OilPrice.com), it is argued that raising fuel economy standards tackles only a small portion of the problem:

The problem with higher CAFE standards is that they encourage fuel saving only with regard to the choice of what car to buy. Once a consumer buys a low-mileage vehicle, the cost of driving and extra mile goes down, thereby reducing the incentive for fuel-saving measures like moving closer to work, working at home, riding the bus to work, or consolidating errands.

The very fuel-saving strategies that CAFE standards discourage, like moving closer to work or consolidating errands, are often the ones that have the lowest costs. That is why the total cost of reaching a given national fuel-saving target will be greater when achieved through CAFE standards than when induced by an increase in fuel taxes.

If you’re a fan of economics, studies in spending habits, or just interested in the topic, I highly recommend you read the article in its entirety.

Anyway, in looking at this side of the argument, I think I would have to agree with Dolan.  Think about it, in order to get the biggest environmental bang for the buck you need to fundamentally change people’s driving habits.  You’re not going to do that by increasing fuel economy standards.  That’s painless.

The only way you’re really going to invoke substantial change is to cause pain, particularly pain in the wallet.  That’s why a dramatic increase in the fuel tax would mass a larger reduction in fuel usage and pollution than simply raising fuel economy standards.

Yes, I realize this is a so-called “regressive tax” meaning it affects the poor far more than the wealthy, but, as heartless as it sounds, I don’t think that should stop politicians from moving forward with a fuel tax increase.

What do you think?  Which is more apt to bring bigger changes?  Leave a comment below and be sure to spread the word using the social buttons below.

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