High Standards

By Megan McArdle

What to say, beyond the obvious, about the administration's decision to raise fuel economy standards?

  • It will raise the prices of cars, and make them less safe
  • It will reduce our carbon emissions, but not by as much as advertised, because more fuel efficient cars make driving cheaper, so people will do more of it.  This "rebound" effect robs about 25% of gains, and also means more congestion, and more wear-and-tear on roads
  • This will either help the Big Three compete, or seal their doom as the Japanese manufacturers continue to eat into their market share.  If I had to bet, I'd wager this means big ongoing subsidies for our favorite three public charities.
  • If you want to cut down on the pollution from driving, this is about the worst possible way to do it.  On the other hand, it may be the only politically feasible way to do it.  If you take global warming seriously, as I do, it may be the best of a bad set of policy choices.

This article available online at:

http://www.theatlantic.com/business/archive/2009/05/high-standards/17833/