Fuel solution not easy task

The U.S. Senate recently voted to put the breaks on legislation that would have required automakers to produce more fuel-efficient vehicles, opting to send the issue to the Department of Transportation (DOT) for further review. Environmentalists claim that democracy has once again been thwarted by industry lobbyists and wealthy special interests groups. But it isn't that simple. \nIf the costs of more stringent Corporate Average Fuel Economy (CAFE) standards exceed the benefits derived from their implementation, they should be avoided. If the benefits exceed costs, government intervention is necessary. Much has been made of the benefits of new CAFE standards, but very little has been said about costs. \nWhen fuel efficiency standards rise, automakers are forced to alter vehicle design. Smaller, lightweight vehicles are more fuel-efficient than heavier SUVs. Any attempt to raise CAFE requirements will inevitably require U.S. automakers to reduce vehicle size. Smaller vehicles, which are less able to protect drivers in an accident, are less safe.\nA 1999 study conducted by USA Today revealed that since their inception in 1975, CAFE standards have contributed to a dramatic increase in traffic fatalities. Using data provided by the National Highway Transportation Safety Administration (NHTSA), the study estimated 46,000 people had lost their lives as a result of the vehicle downsizing produced by the push for greater fuel efficiency in the 1970s.\nThe National Academy of Science (NAS) also found evidence of the safety penalty associated with fuel efficiency requirements in a more recent 2001 report. Again, the Academy reaffirmed its conclusion from a previous 1993 study that between 1,300 and 2,600 crash deaths annually may have been prevented if fuel efficiency standards had not forced automakers to reduce vehicle size to achieve government efficiency standards. \nRaising CAFE requirements would also increase the costs automakers incur when producing new vehicles. The increased production costs would be passed on to consumers in the form of higher vehicle prices. The NAS report estimates that new CAFE requirements could push automobile prices up by as much as $2,750. \nThe additional cost burden placed on producers and consumers would discourage new vehicle purchases. Some consumers would retain older, less efficient vehicles longer, undermining efforts to reduce fuel consumption. Those that are able to absorb rising prices and purchase new vehicles will enjoy lower operating costs, since greater fuel efficiency makes driving cheaper. Unfortunately, reducing the marginal cost of operation provides consumers with an incentive to drive more, not less. \nAir quality will not be affected by greater fuel economy either. Tailpipe pollutants are regulated by emission limits that are the same for all vehicles, regardless of fuel economy. The Environmental Protection Agency already requires that the least fuel-efficient cars not pollute any more than the most fuel-efficient. \nThe costs of increasing CAFE standards are real. The consequences of the new regulations are less certain. The benefits of greater fuel economy are even more ambiguous. It's no wonder the Senate decided to give the DOT more time to study the issue before making its decision.