Yawn. Gas taxes versus CAFE. Again.

One proposal to curb CO2 is to increase fuel economy standards (Emissions under scrutiny):

... a transportation researcher at the Oak Ridge National Laboratory in Tennessee, said improving the fuel efficiency of cars and trucks could make the largest single contribution to reducing greenhouse gases of any change in the transportation sector.

[He] said gas mileage standards set in the late 1970s save 50 billion gallons of gasoline a year.

Except for modest increases in fuel efficiency standards for light-duty trucks and sport utility vehicles that were passed in March, [he] said, the standards haven't changed significantly since 1985.

"It's not likely to occur voluntarily," [he] said.

This story is from the LegComm on GCC meeting that I attended last week. If I remember correctly, and I probably don't (I was trying to get WiFi in the hearing room [I failed]), the claim was that 20 or so percent of CO2 emissions would be reduced by 2030, or something big like that, with tighter standards.

I don't really buy it (but then, I was booed off the PPT podium). There are about 200 million cars in the US (source: my oval-shaped head [comments welcome ... about my head shape, not my number). About 4 16* million cars are sold in the US every year (extrapolated from the WSJ's car sales web site). According to some wicked data analysis and fancy math, it will take about 150 12.5* years for the US fleet to turn over completely (assuming each new car replaces an old one; ouch, bad assumption?). Based on this analysis, I conclude that it might take some time for tighter fuel economy standards make a dent in CO2 emissions. Plus with more MPGs, we drive more miles.

An alternative proposal, an increase in the gas tax, would lead to voluntary fuel economy for most all cars on the road right away ... and delay the "peak" in peak oil leaving peak oilers to say: "they delayed my I told you so!"

*Thanks to DJW for correcting a bone-head mistake.

Update: I've received many comments with better numbers (none about the shape of my head) and here is a simple extrapolation that shows the car fleet in the US will increase by 50% in less than 25 years. Starting with 200 million cars (and haven't gotten a better number than that yet), 16 million new cars each year (held conservatively constant) and an annual scrappage rate of 4.5%:

	Cars (in millions)
Year	Total	New	Scrapped
2006	200	16	9.00
2007	207.00	16	9.32
2008	213.69	16	9.62
2009	220.07	16	9.90
2010	226.17	16	10.18
2011	231.99	16	10.44
2012	237.55	16	10.69
2013	242.86	16	10.93
2014	247.93	16	11.16
2015	252.77	16	11.37
2016	257.40	16	11.58
2017	261.82	16	11.78
2018	266.03	16	11.97
2019	270.06	16	12.15
2020	273.91	16	12.33
2021	277.58	16	12.49
2022	281.09	16	12.65
2023	284.44	16	12.80
2024	287.64	16	12.94
2025	290.70	16	13.08
2026	293.62	16	13.21
2027	296.41	16	13.34
2028	299.07	16	13.46
2029	301.61	16	13.57
2030	304.04	16	13.68

Instead of throwing out bogus numbers/math to fish for better numbers I'll go ahead and ask the question: What are the trends in average miles driven?

Comments

[odograph]

there are a range of estimates for the "when" of peak oil. the hirsch report lists a few of them on page 8.

www.hilltoplancers.org/stories/hirsch0502.pdf

the cluster of them ranging between now and 2010 is worrying. certainly, if that cluster (including deffeyes who called his peak in december 2005) is correct, there is no time for CAFE changes to percolate through the fleet.

my rough feeling is that the peak is now. that is based on a formal view of "oil" as the stuff that flows out of the ground in pipes. it is possible that the peak we are seeing is really a light/sweet peak, and that heavy/sour oil production could be higher - but it is constrained by refining capacity for that oil type. it doesn't look like the refiners expected a light/sweet shortfall and now need to adjust.

if heavy/sour production ramps up (faster than light/sweet declines) i'll have to revisit my rough feeling is that the peak is now.

... so anyway the really interesting thing is how policy perscriptions are tied so tightly to those page 8 pedictions.

in particular, i think CAFE is only useful given the CERA and Shell dates.

[odograph]

"Plus with more MPGs, we drive more miles."

i'm sure you realize this is more true pre-peak and less true post-peak. in the latter case realistic fleet replacement rates are unlikely to actually drive lower fuel costs.

after all ... us hybrid guys didn't manage to head off this gas crunch did we?

[John Whitehead]

Odo,

Re: vehicle miles. I think it is the behavior that we need to address (i.e., Tim's "drive less" campaign) and not the capital stock. A tax on gas or miles (sigh) would more directly confront the behavior.

Now, considering the economics of your comment. I think that the MPG/miles relationship will be true pre- and post-peak. We all might be driving less post-peak because of the lower supply of gas and higher prices. But, comparing those people with high MPG cars with those people with low MPG cars, all else equal, those with high MPG cars will drive more.

And, you hybrid guys may be delaying the peak (at least by a day or two), right? May be it will happen X + Y years from now instead of X years from now!

John

[odograph]

certainly, the question is how visible the relative effects of depletion and efficiency will be. a day or two is not real visible.

[odograph]

by the way, i like the phrase "a race to efficiency" from the book that cannot be named.

individuals, companies, and countries have always made consumption/conservation decisions on a cost/benefit basis. the thing to be aware of as peak is approached it rapidly changing cost/benefit equation. it pays to be attentive (and not to treat price signals as anomalous noise).

[M1EK]

I've vacillated back and forth on this (well, not all the way to the "no fuel tax" position) and am currently stuck on the "we need a much higher fuel tax but keep something like CAFE around too" position, after thinking about appliance energy efficiency standards.

Think about it - how much impact did electricity prices (rather than efficiency standards) have when people bought their appliances? Relatively little - the macroeconomics encouraged little innovation in efficiency beyond the kook fringe.

After you already own the appliance, rising electricity costs can encourage you (as well as your neighbor) to conserve. But before? Apart from people with a far-above-average willingness to do research, not so much.

[odograph]

CAFE should be scrapped and replaced with a credit/debit system on each individual new auto sold (across corporate "fleets"). The credit/debit, on the window sticker, gives the consumer the clearest possible signal, and works immediately.

(If thing get even more dire, I'd suggest penalizing old guzzlers at each lisense renewal.)

[Tim Haab]

But M1EK, the energy prices on appliances are 'hidden' to the extent that most people don't know what they are paying for eacg appliance's energy use. Gas prices hit the driver smack in the face when they fill up. So I would guess that gas prices have a much bigger impact on car purchase than electricityy prices have on appliance purchases.

[odograph]

don't you guys have the big yellow "ENERGY GUIDE" tags on your appliances in stores? Is that only California?

(it is on fridges and washers here, but should be on tvs and computers as well.)

[DJW]

That's 4 million cars for the first Q of 2005 and 2006 being shown in your reference. 16-17 million is the annual number. Here's one source but there are many others:

http://www.is-it-a-lemon.com/carfax/news/auto.htm

I had read somewhere that 5% of the fleet per year is replaced in the US but have no reference to offer on that.

[odograph]

here you go djw:

http://www.greencarcongress.com/2006/02/us_vehicle_flee.html

i like the credit/debit (or maybe i should have said credit/tax) thing because it prepares new car buyers for future prices. but i don't expect that to impact the national fleet averages in a big way, or in time.

[John Whitehead]

DJW,

Fixed! Thanks.

John

[M1EK]

odograph points out the yellow stickers - yes, we have them here too. The fact is that most people ignore them when buying an appliance - right or wrong, they just do; but it won't stop them from complaining about electricity prices later on.

We need all of the following:

- dramatically higher fuel taxes with the money going to offset/eliminate current massive subsidies to automobiles and their drivers

- government-enforced information which goes beyond the yellow sticker / MPG on window

- minimum mileage standards for the entire US vehicle fleet (not just per-company) which creep up every year - implemented as transfer payments from people who buy gas hogs TO people who buy fuel sippers.

[joshua corning]

I have stopped being scared and learned to love CAFE.

This is becouse I am convinced that CAFE was nothing more then a tracking poll for where auto manufactures thought they would be in fuel efficiancy as time went on. Like a Moores law for fuel efficancy.

[Robert Schwartz]

The Statistical Abstract of the United States is an essential research tool for all would be pundits.

Table 1078 holds that there were 232 million registered highway vehicles in the US in 2003 of which 136 million were automobiles.

Table 1027 says that there 17 million new motor vehicles sold that year.

The quotient of 232 and 17 is 13.65. The fleet has been growing so I would guess that the turnover is about 7%. So, if higher CAFE standards do not have an adverse effect on fleet turnover, it would be about 7 years before new vehicles were half the fleet.

However, it takes about 3 or 4 years to design a new vehicle, and to actually start selling it to the public. Plus regulatory lag time, plus the inability of our demented court system to leave well enough alone. I would hazard that it would be 2020 before new CAFE standards would have much impact.

The only policy change that would have any short term (i.e. less than 10 years) effect is a gas tax or equivalent measures such as price controls or rationing.

"What are the trends in average miles driven?"

this is one link i have handy:

http://www.eia.doe.gov/emeu/rtecs/chapter3.html

[odograph]

that was me

[John Whitehead]

Classic Odograph double post!

[odograph]

;-)