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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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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.