By Traci Watson, USA TODAY
President Obama's plan to cut fuel usage by vehicles will lead people to drive more and hang onto their gas guzzlers longer, some economists say.
The plan sets a national fuel-efficiency standard starting in model year 2012 and reaching 35.5 miles per gallon by model year 2016. Today's standard is roughly 25 mpg.
In formally announcing the plan Tuesday, Obama called it a "historic agreement to help America break its dependence on oil, reduce harmful pollution, and begin the transition to a clean-energy economy." The tougher standard is designed to reduce both gasoline consumption and emissions of global-warming gases, such as carbon dioxide, a byproduct of fossil-fuel combustion.
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This method of decreasing fuel use, however, has unintended consequences:
• Because cars and trucks will get better mileage, the cost of driving would be cheaper — so people may drive more. A 2007 analysis by University of California-Irvine researchers estimated that U.S. fuel-efficiency improvements from 2000 through 2004 led Americans to drive 6% more miles.
• The Obama administration says cars and trucks will cost an average of $1,300 more under the plan. That means drivers may keep their old, less-efficient vehicles longer. A 2009 Stanford University analysis found that 20% of the emissions reductions made by raising fuel standards are offset by people who hang onto their gas guzzlers.
"This approach ... doesn't necessarily produce as much (of a reduction) as we think," said economist Robert Stavins of Harvard University, referring to the plan's reliance on fuel-efficiency standards.
Still, it is worth doing, says Stanford University economist Lawrence Goulder. "I don't think one should let the perfect be the enemy of the good here," Goulder said. "When you account for the political realities, this is a major step forward."
The administration says its plan will save 1.8 billion barrels of oil and cut 992 million tons of global-warming gases over the program's lifetime. White House spokesman Ben LaBolt says those numbers take the unintended consequences of a tighter fuel-efficiency standard into account.
Obama "believes that increasing fuel-economy standards is the right mechanism to accomplish that goal," LaBolt says.
Economists say a gasoline tax, though politically unpalatable, would be far more cost-effective in slashing gas use and global-warming pollution.
A gas tax gives drivers a big incentive to buy more efficient vehicles, says economist Kenneth Small of the University of California-Irvine. And it encourages people to keep the car or minivan parked in the driveway, because drivers pay a premium for every mile they drive.
When fuel-efficiency standards are raised, though, "The incentive is for consumers and companies to look for a way around" them, Small said.
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