#62MPG

Why do consumers like CAFE? Well, the short answer is that a gas tax (which is infinitely superior from a pure policy perspective) hits them directly in the pocketbook, while CAFE forces automakers to absorb the cost increases before passing them along to consumers in the form of higher MSRPs. But underlying this fact is a larger issue that’s driving support of increased emissions regulation: gas is getting more expensive. As I pointed out in my recent editorial on the subject, for all the automakers’ whining about CAFE increases, it seems that energy prices are moving the market in the same direction anyway (the average family will spend $3,100 on gasoline this year).

According to a Consumer Federation of America study [ PDF], the steadily-rising price of energy has consumer’s even more concerned about gas prices and dependence on the volatile Middle East than they were during the height of the last fuel price shock in the Summer of 2008. As a result, support for a 60 MPG fuel economy standard doesn’t go below 49% (among Independents) even assuming a ten-year payback period, and earns the support of 63% of Democrats. And before you dismiss this support as hysteria, consider the underlying economics for a moment…

The war of words over a possible 62 MPG 2025 CAFE standard is accelerating this week, as letters in support of the standard [sub] are vying with industry responses against the proposal for media attention. And though environmentalists are quick to point out the often-misunderstood difference between EPA and CAFE mileage ratings (a fact that even the industry-friendly Automotive News [sub] concedes, if only in a blog post], the industry’s response is miles away from any kind of compromise, saying

The alliance believes it is inappropriate to be promoting any specific fuel economy/greenhouse gas at this point

How’s that for some old-school, don’t-tread-on-me corporate attitude? No room for compromise, no sense of nuance… and yet, that doesn’t actually represent the industry’s position at all.