Tuesday, May 19, 2009

US Inefficiency Standard

Need to start thinking outside the box

The US Administration announced today that by 2016 US vehicle efficiency is to be raised to 39mpg for cars and 30mpg for light trucks/SUVs. These new efficiency levels will keep US motorists at least twenty years behind Europe in terms of automotive efficiency. Today's announcement (my emphasis in red):
"...simply allows the United States to match today’s European fleet efficiency (vehicles on the road now) some time after 2030." (NY Times/Lee Schipper)
US car buyers rather than the government need to create demand for ultra-efficient vehicles. A market solution which pushes efficiency aggressively and operates independent of oil price cycles is the vehicle efficiency market. A vehicle efficiency market is fully compatible with the goal of today's announcement - greater efficiency. However, a vehicle efficiency market uses a carrot rather than a stick.
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