The car industry is under pressure to improve fuel efficiency. It is not that they have been sitting on their thumbs. Automakers have achieved large increases in fuel efficiency through better technology in recent decades, says MIT economist Christopher Knittel.
The problem is:
“Most of that technological progress has gone into compensating for weight and horsepower.”
Between 1980 and 2006, the average gas mileage of vehicles sold in the United States increased by slightly more than 15 percent. During that time, the average curb weight increased 26 percent, their horsepower rose 107 percent. At the same time, the fuel economy of the engines actually increased by 60 percent between 1980 and 2006, Knittel shows in a new research paper, “Automobiles on Steroids,” published in the American Economic Review [$$$]. Most of those savings were used to buy more weight and horsepower.
If we would be driving cars of the same size and power that were typical in 1980, the country’s fleet of autos would have jumped from an average of about 23 mpg to roughly 37 mpg, well above the current average of around 27 mpg, Knittel says.
Currently, better fuel economy is mandated through complicated and sometimes skewed CAFE rules. Knittel thinks that compliance is easy: Maintain the rate of technological innovation experienced since 1980, and reduce the weight and horsepower of the average vehicle sold by 25 percent. Bingo, CAFE complied with.
If the country would shift back to the average weight and power common in 1980, a fleet-wide average of 52 mpg could be reached by 2020, Knittel calculates. However, Knittel does not think it will happen by itself.
The CAFE regulations will “end up reducing the cost of driving. If you force people to buy more fuel-efficient cars through CAFE standards, you actually get what’s called ‘rebound,’ and they drive more than they would have.”
“When it comes to climate change, leaving the market alone isn’t going to lead to the efficient outcome. The right starting point is a gas tax.”
(Hat tip to Dipl. Ing you-know-who)