Reducing Fuel Consumption: Increase Vehicle Efficiency or Reduce Driving?

NYT Economic Scene columnist Eduardo Porter makes a strong case against the new 54.5 mpg by 2025 fuel efficiency standards, arguing instead for higher gas taxes. Critiquing the piece, Reuter's economics blogger, Felix Salmon calls for both measures.

2 minute read

September 15, 2012, 5:00 AM PDT

By Irvin Dawid


Porter makes a strong case for increasing gas taxes. "[T]hese (efficiency) improvements come at a high cost for drivers, automakers and society in general. They could be achieved much more cheaply by raising taxes on gasoline to a level comparable to that of pretty much every other industrialized nation."

Salmon, after first forcing a correction to Porter's analogy of the mileage comparisons of a Ford Fiesta sold in the U.S. compared to one in Britain (noted at end of article), makes an equally strong case for applying both higher fuel standards and fuel taxes.

"Porter's central point is absolutely right: there are two ways to reduce the amount of fuel that people use. The first is to make cars more efficient; the second is to reduce the number of miles that people drive. [Porter notes that higher fuel taxes would also result in higher fuel efficiency]

Higher gasoline taxes work on both fronts, while higher fuel-economy standards only work on the first. Indeed, at the margin they increase the number of miles people drive: since more efficient cars cost less to drive per mile, people drive further when they get more efficient cars.

Porter is also right that in countries with higher gas taxes, fuel economy tends to be much higher. But he's not necessarily right that the higher gas taxes alone are responsible. Porter implies that the US only has fuel-economy standards just because "a tax on gasoline doesn't stand a chance" of being passed. But the fact is that even countries with very high gas taxes have fuel-economy standards as well. And, guess what, they're significantly tougher than ours, and they always have been.

The fact is that the US has pretty much the lowest fuel-economy standards in the developed world, and it still will in 2025, even after the new standards are fully phased in. If US carmakers want to be internationally competitive, they're going to need to develop more fuel-efficient cars anyway, no matter what happens in the US."

Not stated by either writer is the near-insolvency of the Highway Trust Fund - attributed largely to gas taxes that have not increased since 1993.

Thanks to Charles Komanoff

Wednesday, September 12, 2012 in The New York Times - Business Day

Large blank mall building with only two cars in large parking lot.

Pennsylvania Mall Conversion Bill Passes House

If passed, the bill would promote the adaptive reuse of defunct commercial buildings.

April 18, 2024 - Central Penn Business Journal

Street scene in Greenwich Village, New York City with people walking through busy intersection and new WTC tower in background.

Planning for Accessibility: Proximity is More Important than Mobility

Accessibility-based planning minimizes the distance that people must travel to reach desired services and activities. Measured this way, increased density can provide more total benefits than increased speeds.

April 14, 2024 - Todd Litman

Wood-frame two-story rowhouses under construction.

Fair Housing Cannot Take a Back Seat to ‘Build, Baby, Build’

If we overlook fair housing principles in the plan to build US housing back better, we risk ending up right back where we started.

April 11, 2024 - James Jennings

"No 710" lawn sign on green lawn.

LA Metro Board Approves New 710 Freeway Plan

The newest plan for the 710 corridor claims it will not displace any residents.

2 hours ago - Streetsblog LA

Close-up of row of electric cars plugged into chargers at outdoor station.

Austin’s Proposed EV Charging Rules Regulate Station Locations, Size

City planners say the new rules would ensure an efficient distribution of charging infrastructure across the city and prevent an overconcentration in residential areas.

3 hours ago - Austin Monitor

Green hills with orange California poppies in bloom in foreground in Chino Hills State Park, California.

Making California State Parks More Climate-Resilient

A recently released report offers recommendations for keeping state parks healthy and robust, including acquiring additional land for conservation and recreation.

4 hours ago - Spectrum News 1

News from HUD User

HUD's Office of Policy Development and Research

Call for Speakers

Mpact Transit + Community

New Updates on PD&R Edge

HUD's Office of Policy Development and Research

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.