Fuel Economy Standards Are a Costly Mistake

Here is a link to an article by Furth and Kreutzer of the Heritage Foundation.

Government is, all too often, the problem, not the solution.

Here is a snippet.

CAFE standards are costly, inefficient, and ineffective regulations. They severely limit consumers’ ability to make their own choices concerning safety, comfort, affordability, and efficiency. Originally based on the belief that consumers undervalued fuel economy, the standards have morphed into climate control mandates. Under any justification, regulation gives the desires of government regulators precedence over those of the Americans who actually pay for the cars. Since the regulators undervalue the well-being of American consumers, the policy outcomes are predictably harmful.

• Economists and engineers accurately predicted that the MY 2016 standards would hurt consumers by at least $3,800 per car;

• Since the Obama-era standards took effect, average new car prices have risen to $6,200 above trend;

• CAFE standards will continue to tighten, reaching 49.6 mpg in 2025;[38]

• The higher prices will force millions of lower-income households out of the new-car market;

• CAFE standards have a trivial impact on global warming—hundredths of a degree at most; and

• Regulation limits consumers’ choices regarding safety, comfort, and affordability.

Congress should repeal the CAFE standards immediately, which would save 2025 car buyers at least $7,200 per vehicle. Failing that, this or any future Administration has the authority to rewrite the regulatory rule for future model years, taking consumer costs into account and easing the standards, potentially to 27.5 mpg, which would save 2025 car buyers at least $5,900 per vehicle.[39] Freezing the standards at the MY 2016 level would save future buyers at least $3,400 per vehicle.

The new CAFE standard is just one more example of the regulatory burden the government imposes on American households. From dishwashers with interminable cycle times[40] to requirements that gasoline be diluted with corn ethanol,[41] the mandates imposed by the federal government increase consumer costs and reduce consumer choices.