The road ahead
Knittel asserts that given consumer preferences in autos, larger changes in fleet-wide gas mileage will occur only when policies change, too. “It’s the policymakers’ responsibility to create a structure that leads to these technologies being put toward fuel economy,” he says.
Among environmental policy analysts, the notion of a surcharge on fuel is widely supported. “I think 98 percent of economists would say that we need higher gas taxes,” Knittel says.
Instead, the major policy advance in this area occurring under the current administration has been a mandated rise in CAFE standards, the Corporate Average Fuel Economy of cars and trucks. In July, President Barack Obama announced new standards calling for a fleet-wide average of 35.5 mpg by 2016, and 54.5 mpg by 2025.
According to Knittel’s calculations, the automakers could meet the new CAFE standards by simply maintaining the rate of technological innovation experienced since 1980 while reducing the weight and horsepower of the average vehicle sold by 25 percent. Alternately, Knittel notes, a shift back to the average weight and power seen in 1980, along with a continuation of the trend toward greater fuel efficiency, would lead to a fleet-wide average of 52 mpg by 2020.
That said, Knittel is skeptical that CAFE standards by themselves will have the impact a new gas tax would. Such mileage regulations, he says, “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.” A gas tax, he believes, would create demand for more fuel-efficient cars without as much rebound, the phenomenon through which greater efficiency leads to potentially greater consumption.
Fuel efficiency, Knittel says, has come a long way in recent decades. But when it comes to getting those advances to have an impact out on the road, there is still a long way to go.
Company says fleet operators can save more than they may realize.
PHH Arval projects savings of $375 in fuel cost per vehicle for calendar year 2011.
Why are automakers complaining about CAFE standards when the fuel crisis is decimating their sales?
The American Chemistry Council submitted written comments on a federal proposal to increase fuel efficiency and reduce greenhouse gas emissions in passenger automobiles and light trucks.