Study Finds Fuel Economy Standards Less Cost Effective Than Fuel Tax

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According to a Massachusetts Institute of Technology (MIT) study, government-set fuel economy standards, which have been practiced for many years, are 6 to 14 times less effective than a fuel tax for reducing gasoline usage.

ZiS-110V. Art Konovalov /
ZiS-110V. Art Konovalov /

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The concept of fuel efficiency standards ensures that new vehicles are more efficient, but, what about the rest of the cars on the road? The objective of fuel economy standards is to reduce gasoline usage overall, but it only reduces the fuel consumption of new cars by making car manufacturers build more efficient vehicles.

Most people cannot buy new cars because they are all very expensive. However, a fuel tax would be an incentive for drivers of all cars — from old to new — to use their fuel more efficiently by hypermiling, using shorter routes, switching to more efficient cars (even if they are used), car pooling, using public transportation, travelling by foot, and to driving less overall.

A fuel tax is also an incentive for manufacturers to build more efficient cars. All of this is because a fuel tax drives up the cost to drive all fossil-fuelled cars.

“A tax on gasoline has proven to be a nonstarter for many decades in the US, and I think one of the reasons is that it would be very visible to consumers every time they go to fill up their cars,” said Valerie Karplus, the lead author of the study and a researcher with the MIT Joint Program on the Science and Policy of Global Change. “With a vehicle efficiency standard, your costs won’t increase unless you buy a new car, and even better than that, policymakers will tell you you’re actually saving money.”

“As my colleague likes to say, you may see more money in your front pocket, but you’re actually financing the policy out of your back pocket through your tax dollars and at the point of your vehicle purchase.”

Source: Green Car Congress

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Nicholas Brown

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