The Unitended Consequences Of Higher Gas Mileage Standards

54 miles per gallon.

The Federal government has imposed some pretty strict mileage standards on car makers. 35 mpg by 2016 and 54.5 mpg by 2025. Just check out the wonderful results of increased CAFE standards put out by the White House in the graphic above.

It all sounds and looks terrific, right?

Sure does…unless you look at the unintended consequences of these policies like TownHall.com columnist Harry R. Jackson, Jr. did in a recent piece.

According to Jackson’s recent column, these newly imposed CAFE standards will have two major effects.

First, the cost of new automobiles will increase between $3000 to $4800 per car. That’s according to figures by the National Highway Traffic Safety Administration (NHTSA). But these price increases don’t take into account the additional cost to the car owner to finance a loan for that more expensive vehicle–somewhere between $2000-$6000 depending on the length of the loan.

The increased cost of new cars will have a secondary effect of keeping 6 to 11 million low income drivers out of the new car market. Demand will increase for used vehicles which will result in higher prices for used cars.

Second, perhaps more significantly, and what the White House’s rosy infographic doesn’t tell us is these new CAFE standards will diminish traffic safety by increasing traffic injuries and deaths.

In order for auto makers to hit the government imposed mileage standards new cars will have to lose weight. Strong metals like steel will be replaced with light weight metals or plastics. But while these cars of the future will get great gas mileage they will also have less bulk to protect drivers and passengers from injury or death in a crash.

Jackson is not a lone voice on this, he explains it this way in his column:

The NHTSA, Brookings Institution, Harvard School of Public Health, National Academy of Sciences and

USA Today discovered a shocking reality. Even past and current mileage standards have resulted in thousands of additional fatalities, and tens of thousands of serious injuries, every year – above what would have happened if the government had not imposed those standards.

They also learned that drivers in lightweight cars were up to twelve times more likely to die in a crash – and far more likely to suffer serious injury and permanent disabilities.

Increasing mileage requirements by a whopping 19 mpg above current rules will make nearly all cars even less safe than they are today.

So, what’s the cost of government imposed higher mileage on car makers? What’s the cost for the millions of gallons of gasoline and barrels of oil which will be “saved”?

Thousands of human lives and billions of dollars in higher vehicle prices–awesome.

Read Jackson’s full column, “54.5 MPG and The Law of Unintended Consequences.”

19 Responses to The Unitended Consequences Of Higher Gas Mileage Standards

  1. Don W says:

    A quick look at wikipedia shows CAFE standards were introduced in 1978.
    Since then the required mileage has risen about 65%. During the same time period, traffic fatalities *dropped* about 34%.
    And a chart in this usa today article (http://goo.gl/c8ZLd) shows the number of used cars scrapped has stayed about the same since 2000 while new car sales dropped, which is what is fueling the higher used car prices the Town Hall guy cites as the fault of the cash for clunkers program.
    I’m thinking there’s a reason there are no links to sources in this guys article…

  2. Don W says:

    (traffic fatalities per 100 million population)

  3. MRL says:

    Any idea what link for the Study that this guy is referring to?

  4. MRL says:

    Looks like the study he refers to is over a dozen years old. Isn’t there any more current data given that the standards have been in place since then?

    Also, seems all of these studys have been funded by right-wing pro-business groups looking for reasons to kill the CAFE standards. Color me skeptical but remaining open on the safety issue.

    http://www.heritage.org/research/reports/2001/07/cafe-standards-should-be-repealed

  5. JP says:

    Is this the next bubble, auto loans? “…additional cost to the car owner to finance a loan for that more expensive vehicle–somewhere between $2000-$6000 depending on the length of the loan.” What kind of crazy expensive car are you buying, at what crazy interest rate, a what crazy loans length to incur an EXTRA $2-6K?!?! That just sounds made up to me.

  6. B says:

    Bastiat’s seen and the unseen. No single person or small group can know enough about the situations of hundreds of millions of people in order to decide their priorities for them, to say what is best for them. This always means so called unintended consequences.

    CAFE from 1976 to 1985 resulted in what are now called SUVs taking off. The large passenger cars people purchased were replaced with passenger trucks. This next CAFE bump is difficult to say what will happen. However it’s going to get crazy expensive unless people find another hole to exploit. However the expense has a limit, the cost of the penalties. When it becomes cheaper to pass on the cost of penalties for not making CAFE, more automakers will simply ignore it and consider it cost of doing business. Some already do.

    CAFE from its design is about one thing, control over market choices. That is to make certain choices simply unavailable. Especially true as government requires greater crash protection which means more weight.

    This assumes that the technology to make these numbers can be willed into existence in the first place. There’s a fair chance it won’t be. Or it means more resource intensive auto construction like hybrids and such.

    It is my theory that CAFE is part of a long standing progression to turning the automobile back into a rich man’s toy. To make cars increasingly more expensive until people simply can no longer afford them especially in light of wages that are falling by real standards.

  7. OIFVet says:

    Sorry Geek but I don’t buy anything that Townhall has to sell. First I remember my college car, an ’89 Civic hatchback that got me 44 mpg on the highway even as it went well over 220k miles. The automakers could get that kind of mileage in ’89 but the same automaker can’t get 33mpg on the current Civic? Wonder why. Second, I will give you any odds that vehicle weight continuosly decreased from the 50′s to today while safety increased. Why? Its not how heavy the car is, its how well its crumple zones absorb the energy from the crash. Better research and engineering. Mr. Jackson may well be an excellent propagandist but he is obiously a lousy engineer.

  8. David says:

    I agree with OIF Vet. The article is a typical “plastic” is not as strong as steel screed. This, however, is not necessarily true. Carbon Fiber is very light and very strong. New Airplanes have very little metal in them. New Cars are, in fact, significantly safer and we would all be much safer if CAFE standards got the big SUV’s off of the road.

  9. B says:

    There are four major opposing factors in automotive design at play here
    1) fuel economy (measured in miles per gallon)
    2) safety in a crash
    3) emissions (measured in g/mile)
    4) mandated gadgets and market desired gadgets.

    A 1980s Honda Civic could not be legally sold in the USA today. While it meets fuel economy requirements it fails on the other three aspects.

    Yes, crash worthiness even with crumple zones means adding weight. Even cleverly designed structures will weigh more to protect greater areas at greater speeds. Airbags and other systems also have weight. Gadgets such as backup cameras, tire pressure monitors, and so add to the total. Now add mechanisms for variable valve timing and so on to the engine and weight keeps going up. Sure some is mitigated by clever design and advanced materials which then in turn add to cost ups.

    This is why need market based solutions. This way those people who wanted fuel economy could purchase something like 1980s civic and get it, cheaply. Sure, they would live with a 1980s level of crash protection maybe a little better with clever design learned since. Also a 1980s level of equipment. That’s what choices are, trade offs and balances. Government instead mandates one size fits all. Everyone has to have certain things. But those things have trade offs too. Those in government are either too arrogant or ignorant to realize it and think they can just will technology into existence… that is unless they have something else in mind like making cars too expensive for most of us.

  10. David says:

    B says

    Yes, crash worthiness even with crumple zones means adding weight. Even cleverly designed structures will weigh more to protect greater areas at greater speeds.

    My comment:
    Are you an automotive engineer? Many products have very successfully substituted carbon fiber for metal. At a much lower weight and with much more strength. It is hard to believe that car design would run counter to every other product.

    B wrote:
    Airbags and other systems also have weight. Gadgets such as backup cameras, tire pressure monitors, and so add to the total.

    My comment:
    And other systems now weigh far less. Consider the size difference between an Apple Nano and the original Sony Walkman. Or an early Cell Phone and a modern cell phone. Or the first portable computer and today’s “pads”. Back-up cameras and the like add less than the weight of one gallon of gasoline.

    B wrote:
    Now add mechanisms for variable valve timing and so on to the engine and weight keeps going up. Sure some is mitigated by clever design and advanced materials which then in turn add to cost ups.

    My comment:
    Higher costs? The first PC Hard drive cost nearly $1,000. A box of 10 5.25 inch double sided floppy disks was $50.

    And some of these “ideas” will reduce weight and clean the air. Increasing safety and improving emissions.

    B wrote:
    This is why need market based solutions.

    My comment:
    That’s why we don’t. The reason that many of our safety items are in place is because they were mandated by the Government. This reduced the cost by forcing a degree of standardization. And we all “pay for the poor choices” of others. For example, we have a finite supply of the current fuel. If 25% of the people decide to use 8 MPG monster trucks, this will increase the cost of fuel for ALL OF US. If 20% decide to “pollute”, all of us have to breathe the bad air. And so one.

    B wrote:
    This way those people who wanted fuel economy could purchase something like 1980s civic and get it, cheaply. Sure, they would live with a 1980s level of crash protection maybe a little better with clever design learned since. Also a 1980s level of equipment. That’s what choices are, trade offs and balances. Government instead mandates one size fits all.

    My comment:
    Not really. The Government mandates certain general standards and leaves the private sector to decide what to do. Some folks (Prius) get it right, others don’t.

    B wrote:
    Everyone has to have certain things. But those things have trade offs too. Those in government are either too arrogant or ignorant to realize it

    My comment:
    Sheer nonsense. Do people think that Government workers go in every day and say, hmm, what can I do today to screw society? And as for “ignorant”, Government workers are highly underpaid and work very hard. And in their fields, particularly the technical people, know a great deal. That’s why they get headhunted out of the Government. The “arrogant and ignorant” comment simply means you don’t agree with the educated choices made by those in Government. And if you don’t like it, you can change it.

    B wrote:
    and think they can just will technology into existence… that is unless they have something else in mind like making cars too expensive for most of us.

    My comment:
    Prices for everything have gone up. Car prices have not gone up at a more significant rate. You can’t buy a Datsun for $999 anymore.

  11. B says:

    D: Are you an automotive engineer?
    oooh… I love a good authority measuring.
    I have BS in mechanical engineering and an MS mechanical and aerospace engineering. I’ve been a member of SAE for ~23 years. While not working for any automakers, automobiles and driving have been an on going interest and hobby for me for about 25 years. I have worked in the electronics industry among others. What you got to lay out on the table?

    D: Many products have very successfully substituted carbon fiber for metal.

    Carbon fiber is incredibly more expensive and has much different properties. It also has manufacturing limitations. It’s also a slow labor intensive process. There is a reason it’s applications are generally in higher end products, and why when it is used for cars it is generally the body panels of exotics. If you’re looking to customize your car aftermarket with a carbon fiber hood, have at it, but as standard equipment it’s just not worth the cost.

    D: And other systems now weigh far less.
    And yet, the weight and size of automobiles continues to increase to meet the standards. I have three cars from the same make. The newest two are of the same model, the oldest very similar to what that model was in that time period. MY’s 1973,1997,2012. That’s also their weight order from least to most. Meanwhile the 2012 has a lot of weight savings measures taken on it. It doesn’t even have a spare tire. How does it weigh more?

    D:Higher costs? The first PC Hard drive cost nearly $1,000. A box of 10 5.25 inch double sided floppy disks was $50.

    Automobiles are not electronics. Electronics is one of the few industries that can beat inflation. The mechanical world cannot reduce costs that fast. Namely because electronics is not as material driven and it measures monthly volumes of single models in millions while automobiles measure annual model output in thousands.

    D:That’s why we don’t. The reason that many of our safety items are in place is because they were mandated by the Government.

    False. This shows an ignorance of automotive history. Various manufacturers tried to sell safety long before the government got involved. The efforts of Volvo, Ford, and Tucker are the most known. Here’s a Ford video from the 1950s: https://www.youtube.com/watch?v=J9i7q4LgVqw

    There is not one single innovation I know of that has come from the government. They were all prior existing options that someone decided everyone should be forced to buy. Airbags were first offered in the early 1970s. One of my repair manuals shows how to service them. It was written in 1975, covering models from the mid-late 1960s to 1975. Automakers research showed that the unbelted male standard would harm/kill smaller people. The government decided to ignore this. People died.

    D: And we all “pay for the poor choices” of others.

    Only in the notions of people who want everything centrally managed because they either like telling their neighbors how to live or they want someone else to make the decisions for them.

    D:For example, we have a finite supply of the current fuel.

    There is more of this fuel currently known to exist measured in volume and in years at present usage since it started “running out” in the late 19th century. That said, if it weren’t for the factors working against it fuel economy would be much greater today.

    D: If 25% of the people decide to use 8 MPG monster trucks, this will increase the cost of fuel for ALL OF US. If 20% decide to “pollute”, all of us have to breathe the bad air. And so one.

    Pollution is measured in grams per mile. It does not matter if a car gets 8mpg or 400mpg, the standards are the same. Also pollution passed the trivial level many years ago. That’s why it costs so much more and takes ever more complex methods to get further reductions. It’s an exponential curve.

    Also it is absurd to think that 25% of the population would do any such thing. Fuel economy has been a sales feature for many decades. Here’s an ad for the 1969.5 Ford Maverick: http://home.comcast.net/~petebre/maverick/mav_pr.jpg Similar fuel economy measures were used to sell it’s predecessor, Falcon a decade earlier. Can’t quickly locate a copy online though.

    D: Not really. The Government mandates certain general standards and leaves the private sector to decide what to do. Some folks (Prius) get it right, others don’t.

    The government mandates what someone who has enough political influence decides should be what everyone should have. A buyer of new Prius is hardly green given the resource intensive nature of that vehicle. It’s actually a poster child for the unseen consequences of regulation. Given the energy and environmental damage done to produce a new prius I could drive my 1973 automobile for decades. This is a car that doesn’t even have a cat-con. Although it has a straight six which keeps the fuel consumption down. One of those vehicles the oil embargo helped sales of, but I digress. If we really wanted to mandate something to help the environment it would be the rebuilding of existing vehicles. Instead your government encouraged their destruction with ‘cash for clunkers’.

    (on design trade offs)
    D:Sheer nonsense.Do people think that Government workers go in every day and say, hmm, what can I do today to screw society? And as for “ignorant”,

    Government workers operate in their self interest. Their self interest is perpetuating their jobs and increasing their income/advancing their career. Same as any other institution. How does a government worker do that? When you answer that, you get why there is push for greater government power, regulation, etc and so forth.

    Anyway the standards are not set by government workers, they are set by those in much higher office. But they have the same self interests.

    D: Government workers are highly underpaid and work very hard.

    Absolutely false. Government workers make far more than those in private industry for the same level of experience and education. Quick google, first match: http://www.msnbc.msn.com/id/46194863/ns/business-us_business/t/federal-workers-make-more-same-job/#.UCrsKaDvh8E

    D: And in their fields, particularly the technical people, know a great deal. That’s why they get headhunted out of the Government.

    Those that get headhunted out of government because they know the regulatory system and have contacts. This is very important in this economy, especially with regard to the higher ups I mentioned previously. Government workers, those who have built their career in government know nothing about getting a product developed and out the door on time. The realities of product design are not something they would be hired for.

    D: The “arrogant and ignorant” comment simply means you don’t agree with the educated choices made by those in Government.

    Their basis is political, not technical or educated. People like Obama or Romney and others believe they can will technology into existence. I find this very arrogant.

    D: And if you don’t like it, you can change it.

    No, I can’t. The idea that I or you have a voice in government is an illusion. We are ruled over and until people decide they would rather be free instead of managed this condition will persist. The only way I can change things is to convince people they are better off free than managed as human resources.

    D:Prices for everything have gone up. Car prices have not gone up at a more significant rate. You can’t buy a Datsun for $999 anymore.

    Your government keeps creating more dollars thus devaluing that measure, however cars have increased in price rather dramatically. Anyway new car prices have been increasing greater than inflation and used car prices dramatically because of the loss of so many due to cash for clunkers.

    The natural state is for the cost of products to go down over time in constant measure. For something to stay the same in inflation adjusted figures that means additional cost is coming into the product. Now depending on the measure used, new car prices are either increasing faster than inflation or with it. Of course this is about what will happen, not what has happened. There is no way this much technology can be added this fast without increasing prices faster than inflation. The other option is that CAFE penalties will be passed on also resulting in prices increasing faster than inflation.

  12. B says:

    oh something I forgot to add, it was the arrogance of those in government that their unbelted male standard for airbags was the way to go. The end result was people dying in minor crashes. It’s been kinda sorta patched by allowing automakers some room, but government has not admitted the error. It simply demands that people who could be harmed not sit in the front seats. Don’t know how a 4’11″ 90lb woman is supposed to drive the car from the backseat, but that’s government for you.

  13. OIFVet says:

    B, do you care to state how many lives have been saved by airbags vs the number of lives lost because of them or are you enjoying a good rant against the evil guvmint too much to actually care for hard numbers? You sound like the good folks who held those “Keep your guvmint hands off my Medicare” signs a few summers ago. “Market” solutions have that feel good ring to them but one thing you and most people for that matter fail to realize is that there is not, has never been, and will never be such thing as free market. People are not logical (despite what some “free” market dreamers think) and therefore we can never have such a thing. This is why we need government regulations, we need to ensure and enforce some basic rules and principles in order to make an imperfect market better. Left to their own devices corporations will lie, cheat, steal, and kill their customers and the “free” market, far from punishing them as the theory goes, will actually reward their bad behavior because it makes money for the investors. Its that simple, unless of course one has drank the tea bag or libertarian coolaid.

  14. B says:

    OIFVet, what I am illustrating via airbags is the inherent failure of one size fits all policies. If people think airbags are a good idea for themselves they should be free to purchase them at the strength they desire.

    Those in favor of the state have this arrogant superiority complex that they know better for everyone else. Convincing people that something is a good idea is far more difficult than using force, which is why force is used. Automakers tried to convince people regarding safety features, but it didn’t take for a long time. After the government got involved, but all the government did was mandate what automakers tried to sell previously. However if all the safety mandates were repealed today, would an automaker be able to sell a car without even seat belts? No. People know better today. They have largely been convinced. What is up for debate today are finer points like should a 4’11″ woman who wears a seat belt be forced to have an airbag in her car that can kill her? Should someone choose increased crash protection or fuel economy?

    Imagine for a moment that the early 70s experiment was more successful and the automakers decided that airbags designed for the unbelted male passenger would save more lives than those that would be killed by them. The automakers then decided to widely offer them, often as standard equipment and despite warnings in the owners manuals people were killed. How would that play in the media? We would hear about how automakers disregarded vital information to make money selling pricey airbags. The spin would be very different. The Pinto scandal was a myth, but this would actually have real meat behind it. To this day people still believe ford acted to kill their customers with the Pinto. ( http://www.pointoflaw.com/articles/archives/000023.php )

    “You sound like the good folks who held those “Keep your guvmint hands off my Medicare” signs a few summers ago.”

    What the h? Just throwing in ridicule for the hell of it? Why is this here?

    Yes, the free market has not really existed, except under very limited circumstances for a short time with emerging technologies. In living memory I can only think of electronics, software, etc having anything close. And the result was rapid growth and product improvement at ever lower costs.

    Even freer markets are rare because it seems to be a common trait of humanity to threaten other people and control them, often under the idea that it is for their own good. Then there is basic greed. It is far easier to use force, to use political structures than to compete. As such the state cannot permit a free market to exist.

    Corporations are creatures of the state. As such those operating them get certain protections. The USA is a corporatist state. This is why at least some corporations can “lie, cheat, steal, and kill their customers”. The free market however does not reward this behavior. As you clearly pointed out there is no free market. The unfree market does reward it, because the unfree market gives advantage to those who lie, cheat, steal, and kill to get ahead. Those that can use the state. It’s the nature of politics, the worst rise to the top. The more political a system becomes the nastier it becomes in those regards. Corporations are internally political systems, systems that reward those who don’t have moral limitations.

    You do what I see many do, that is you take the problems of the unfree market and then blame the free market for them. But there’s no free market (as you point out) and never has been one in living memory (outside some very limited circumstances that oddly don’t have these issues) so how is it the free market’s fault? By and large it’s the fault of the regulated unfree market, of the unforeseen consequences of the regulation, of the interferences.

    “. Its that simple, unless of course one has drank the tea bag or libertarian coolaid.”

    If you wish, I can be just as nasty and ridiculing of the statist position.

  15. The Parking Ticket Geek says:

    MRL & Don W.,

    Thanks for the good input. I will try to find time to look into this a bit more.

    My general understanding has always been that lighter cars = more injuries and deaths when crashes occur. I will try to remain open minded as well while searching for more current data.

  16. The Parking Ticket Geek says:

    B,

    It sounds like you and I read/listen to/believe many of the same authors/thinkers/economists.

    The government is really, really good at doing one thing–creating market dislocation.

    When automakers (or any business) is busy spending time and money jumping through the flaming hoops of regulations, they are not spending time and money on producing high quality, affordable products or services for consumers.

    I have no doubt, that the free market, left alone to contend with the natural pressures of the marketplace, would figure out a way to provide better, lighter, stronger, safer, less expensive automobiles without any governmental influence.

    If you want a more modern example, look at two alternative powered vehicles on the road. For all the federal tax credits and investments in infrastructure given to promote electric vehicle technology very few EV’s are being sold.

    http://theexpiredmeter.com/2012/07/could-cars-powered-by-natural-gas-be-the-answer-to-expensive-gasoline/

    But, natural gas powered vehicles are starting to catch on, with way more of these type of vehicles currently on the road with zero or very little federal tax incentives or money spent to promote this new technology.

    This particular example proves (at least to me), that the marketplace always knows better than the government.

    This is just a long winded blathering way to say I very much agree with your assessment.

    The Geek

    P.S. I cannot believe someone quoted Bastiat on this website. Awesome!

  17. The Parking Ticket Geek says:

    OIF,

    As someone who has more faith in the free market than the government, please know people like myself don’t want to get rid of government but just want less of it in our lives.

    Of course our nation needs some rules, regulations and laws. But how much is too much? Should we always be crafting laws to protect the those with the very lowest IQ’s?

    Corporations who cheat, steal, kill their customers won’t be in business very long. The market will snuff out that type of business pretty darn quick–faster than the government that’s for sure.

    When you say people are not logical, I would agree. But the market, because it reflects the billions of purchasing decisions made by millions of people, will find its way to what’s best for society faster and more efficiently than the government every time–despite the illogical decisions made by many members of society.

    As always though, I always appreciate your input here OIFVet.

  18. B says:

    Parking ticket Geek,
    Thanks, Bastiat is one of my favorites because of how simply he made the key points.
    I agree, CNG works very well. The difficulty is in the refueling and fuel capacity. However, it is still superior to electrics which have the same problems but worse plus performance penalties. CNG vehicles can be dual fuel as well. There is no noticeable performance loss with CNG.

    And yes, we can’t go without rules. It’s the implementation that matters IMO. For product design private standards are very effective. In the industry I currently work in there are no government safety standards. However the products have to meet standards from bodies like ISO and UL. If someone hurts themselves and the product did not follow these standards it’s going to be difficult to defend against a lawsuit without evidence that the product is as safe or safer than if it had.

    Now what’s funny is government took over private standards like those of the MUTCD and then changes/ignores them to make money on fines. (which I am sure you are aware of wrt RLCs etc)

  19. [...] years means that more people will needlessly die. And that’s not me guessing, that’s the National Highway Transportation Safety Agency. In order for auto makers to hit the government imposed mileage standards new cars will have to [...]

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