No Free Lunch

How CAFE (doesn't) really work

Historically, the Corporate Average Fuel Economy regulations have had many negative consequences, many of which even supporters of green transportation and environmental issues will find appalling.

In our last segment, Corporate Average Fuel Economy Reality, we discussed the latest CAFE standards and why the policy itself is mainly about public relations rhetoric rather than environmental goodwill. We concluded that the 54.5 miles per gallon number so often touted in the press and by pundits in favor of the CAFE standards is nothing but a mirage and is nowhere a part of the actual standards in the new CAFE updates released last week.

Even with its severely disappointing actual fuel economy standards of only 31-36 mpg real-world (for cars only), many would be willing to say that the new requirements are "at least doing something." That something, however, may not be so good.

There Ain't No Such Thing As a Free Lunch is a popular line summed up in the phrase pronounced "tanstafel." One of the arguments often used to claim that higher CAFE standards and better economy in cars as a whole will mean more money in the pockets of everyday people everywhere is compelling. For those who wish to empower the poor and middle class, this seems like a real winner. For those hoping to encourage the purchase of smaller, more efficient vehicles, this also seems like a good thing.

Surprise! The economics don't work that way.


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