Criticism of Fuel Efficiency Regulations from a Surprising Source

With President Obama adopting historic fuel efficiency regulations for motor vehicles, it may be helpful to hear from opponents of the regulatory approach, not only from the President’s political opponents but also the venerable Brookings Institution
August 31, 2012, 5am PDT | Irvin Dawid
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Being an election year, Republicans were quick to oppose the "'historic' regulations that nearly double the "Corporate Average Fuel Economy, or CAFE, program mandate to 54.5 miles per gallon for the 2025 model year", but why has a Brookings Institution economics expert joined the critics?

"Gov. Romney opposes the extreme standards that President Obama has imposed, which will limit the choices available to American families", reported ThinkProgress on Aug. 28.

"Rep. Darrell Issa (R-Calif.), House Oversight and Government Reform Committee chairman, recently charged the plan is a gift to "environmental extremists", reported Politico, while environmentalists surely did celebrate the new regulations.

"Today, President Obama has taken the most significant action by any President in history to move our country off oil and slash dangerous, climate disrupting pollution that threatens our children's future", announced Michael Brune, executive director of the Sierra Club in their Aug. 28 press release.

Ted Gayer, co-director of the Economic Studies program at the Brookings Institution and W. Kip Viscusi, Vanderbilt University Distinguished Professor of Law, Economics, and Management not only oppose the regulatory approach toward fuel efficiency standards for motor vehicles but also "to clothes dryers, air conditioners, and light bulbs".

Gayer and Viscusi assert that "as the regulatory agencies' own estimates confirm, the environmental benefits of these regulations are negligible, and are often dwarfed by the societal costs they impose."

"In our recently released Mercatus Center study, we examined a sample of energy efficiency regulations proposed or enacted by the Department of Energy, the Department of Transportation, and the Environmental Protection Agency to assess the validity of their benefit claims."

So if not government mandates, what does Gayer suggest - if anything, to promote energy efficiency?

"[A] lot of these regulations aren't well-equipped at getting a problem; whereas, if you put a price, like a carbon tax as you say, which is my preferred policy, that actually gets at the problem", he explained to Monica Trauzzi on E&E TV on July 17, 2012.

Monica Trauzzi: "But we've gone down this road before and we figured out that these approaches are not necessarily politically feasible right now. So, aren't these efficiency measures the next best thing?"

Ted Gayer: "Well, so I think you're right. I think politically what I'm advocating for, as we've seen, is very difficult."

Thanks to Environment & Energy Publishing (E&E)

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Published on Tuesday, July 17, 2012 in US News & World Report
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