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Automakers claim new fuel economy ratings will put hundreds of thousands out of work  (Source: Business Week)
Supporters of increased efficiency standards claim the numbers are inflated

The battle between the auto industry and the federal government over changes to fuel economy regulations is exploding. Lawmakers in Washington want to impose much more efficient standards on future vehicles that could see a fleet wide fuel economy average of 62 mpg in effect by 2025.

Some in the automotive industry argue that the costs to reach the lofty 62 mpg fleet wide average will be much higher than the cost of burning more fuel in less efficient vehicles for consumers. Automakers have previously claimed that the costs would have a dire impact on the industry.

new study by the Center for Automotive Research has been published and the study claims that the rise in efficiency standards by 2025 to 62 mpg could add up to $9,790 to the cost of a new vehicle and will reduce sales by 5.5 million units. The report also claims that the resultant price increase would force a reduction of 260,000 automotive industry jobs due to reduced demand for vehicles by consumers.

On the other side of the battle, those pushing for the increased efficiency standards claim that the tech needed to meet the efficiency standards would only add $770 to $3,500 to the price of a new vehicle.

David Friedman, deputy director of the Union of Concerned Scientists' Clean Vehicles program and supporter of the new efficiency mandate, said, "The Obama administration should ignore this industry-advocate propaganda piece and focus on setting the strongest vehicle efficiency and global warming pollution standards based on credible scientific analysis."

President and CEO of the Union, Jay Baron, says that the main difference in cost between the industry and government studies depends on how much the price of the technology will come down over the next 15 years.



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RE: Because who knows better
By ppardee on 6/15/2011 7:02:29 PM , Rating: 3
Yeah, well, even a dead squirrel is right twice a day...

The interstate system was a good move because they filled a definite and distinct need. But it could have gone either way. It very possibly could have flopped. The government could have built roads to nowhere. At that point it would have been a colossal waste of money. FDR got lucky that people built where the roads went.

You can see the same thing happening in China. The Chinese gov. is building cities, complete with housing, malls and roads, but no one is moving there. It very well could have been the most successful government program in history and been lauded as a triumph of communism. It was the will of the market that determines how successful the action is.

This is the reason why profits are a good thing. They allow companies to determine if the action they are taking is positively impacting people they will never meet and rarely get any direct feedback from. Nothing the government does has any real feedback. Sure, we elect our representatives every 2-6 years, but this doesn't reflect on individual actions (and in some districts it doesn't reflect on anything but the marketing done by the candidate's team).

So, yeah... FDR got lucky. There isn't any real distinct need for 62 mpg vehicles. Any thinking man will tell you that increasing gas mileage has diminishing returns. Going from 10mpg to 20mpg saves you 5 gallons of fuel per 100 miles driven. Going from 20-40 saves 2.5 gallons. Jumping all the way up from 40 to 100 mpg saves 1.5 gal/100miles driven. 100-200 saves .5 gallons.... what's the point? And where does it end? The government doesn't know. The free market does, but only when we get there.


RE: Because who knows better
By Spuke on 6/16/2011 12:26:16 AM , Rating: 2
quote:
The free market does, but only when we get there.
Good post!! Thanks for that info.


RE: Because who knows better
By Bad-Karma on 6/16/2011 3:59:20 AM , Rating: 3
FDR had nothing to do with the interstate system. That was undertaken with President Eisenhower more than 13 years later. Eisenhower witnessed the Germans ability to reshuffle and resupply whole divisions almost overnight using the autobahns and rail networks.

And it was developed more out of a need for military logistics and readiness than economics. While economic development wasn't exactly secondary it was not the initial intent.



RE: Because who knows better
By ppardee on 6/17/2011 6:19:59 PM , Rating: 2
I stand (gratefully) corrected... I hate FDR! :)

Thanks for the info! It looks like the history of it is worth more research.


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