Let’s Stay De-CAFE-inated

By May 25, 2007Energy, Global Warming

You all know the arguments against arbitrarily increasing CAFE standards: More dead and maimed motorists does seem like a pretty big downside to Congress radically increasing fuel efficiency standards. And should consumer preferences just be ignored (because, presumably, politicians are smarter than the public)?

Diana Furchtgott-Roth, an economist with the Hudson Institute, adds another element to the debate, the big-picture context of CAFE standards’ interference in the marketplace. From the New York Sun:

The only rational reason for consumers to ignore the price of gasoline in choosing a car is that there is something wrong with the price of gasoline. That is the implicit message every politician who advocates CAFE standards is telling America: energy markets are unreliable and wrong. President Bush, who once worked in Texas’s oil industry, should know better.

It’s ironic that many politicians who accuse Americans of using too much gasoline want to hold hearings on price gouging when prices rise to reflect hurricanes in the Gulf of Mexico or turbulence in the Middle East. Price increases will eventually lead to less consumption.

If energy security is the rationale for CAFE standards, America needs to increase domestic coal and natural gas production, find out whether potential supplies of oil exist in Alaska, invest in more refinery capacity, and build nuclear power plants. We’ve done none of these.

And so on. A keen analysis, with suggested policy options, from Furchtgott-Roth, who labels CAFE standads “anti-economic and anti-intellectual.”