Kevin Drum likes CAFE. He believes that gas taxes are highly regressive. He’s wrong. But which one ‘works’ better? His argument rests on the last 5 years of generally rising fuel prices versus vehicle sales.
The problem is that the rise in fuel prices recently has been seen by most Americans as the result of gouging, or the result of storms, or hippie environmentalists or <insert other crazy reason>. Key here is that all of those things are temporary. Now, if you’re one of the few people who follows the real oil situation you know that we’re probably in for a period of ever-higher spikes and plateaus (with intervening drops due to recessions, perhaps), but most people don’t know this stuff.
If you think the last couple of years are an anomaly, it doesn’t make sense to invest in a fuel-efficient car. Therefore, using that period as an example of how higher fuel prices don’t affect vehicle choice as much as CAFE did is foolish. Better to look at Europe, where CAFE-like standards don’t really exist; but at the time of vehicle purchase, it is understood that gas taxes are very high and likely to stay that way.
Anyways, CAFE doesn’t work half as well as a high baseline for gas prices does. The real reason? Once you buy your car, if gas prices/taxes are low, there’s no real incentive to leave it in the driveway on any given day. With higher gas prices/taxes, however, there is an incentive to leave it at home and take the bus, or carpool, or whatever.
Addressed as a quickie since so many people around the interweb keep repeating this canard.