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Wednesday, December 19, 2007

New Fuel Efficiency Standards Passes

The new law means the corporate average fuel efficiency standard to be 35mpg by 2020. I personally think that sets our sights too low to be honest, but it is a start. This will help the environment and it will send a signal to automakers that huge Hummers and consumer pickup trucks the size of semi trailers are not the way our economy needs to go. But it's not just about the environment and congestion - higher fuel efficiency reduces shoeleather costs (the costs of having to continually stop to pump gas to fill your tank). Incidentally, carbon taxes may not necessary reduce such shoeleather costs since taxes don't necessarily translate to better fuel efficiency.

Further, these new standards are a direct incentive to not only look at alternative fuels, but to look at alternative technologies and cutting edge technologies WITHIN the existing fuel-using automotive industry. It may be carbon-based energy makes the most sense now and into the future - at least now there is a greater spark toward conservation.

Of course, as the article mentions, at least in the short-run, we can expect these standards (as they are implemented) will cause fuel prices to rise as the cost to producers rises. This is no different (though perhaps to a lesser degree thankfully) than what would happen with carbon taxes or cap-and-trade, but 1. it is politically feasible and reasonable, and 2. the consumer pays none of the cost psychologically speaking (which counts for something - even though some of this cost will surely pass down to them, they won't necessarily link the higher cost to the fuel standard change).

Finally, I like it because for the first time in decades this is something real and tangible that is being done - not just talk and hype. Time will tell if this legislation is worthwhile or not (I obviously think it is), but thank goodness somebody had the balls to pull the trigger on something real.


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