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Counterproductive CAFE regulations

Sam Kazman writes that fuel economy mandates make cars more dangerous. [Kazman @ WSJ; ungated version]

I might add that they make cars more expensive, encouraging consumers to drive older, lower-mileage, heavier-polluting vehicles, so they're counterproductive with their stated goal, too, while costing jobs to boot. Why not use price signals? A steadily increasing Pigouvian tax on gasoline would reduce carbon emissions naturally and create natural demand for high-mileage vehicles while preserving consumer choice. There would be the side benefits of reducing traffic (thus reducing the need for government expenditure on roads) and providing an additional revenue stream that would reduce the need for the government to tax (and thus deter) productive activity like investing or earning income. But that makes too much sense—or, rather, it would require politicians to directly charge voters for their expensive policy dreams, rather than hide the costs.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.