Among the many ways to “go green” is the idea to raise the miles per gallon (mpg) fuel economy requirement on cars. The Environmental Protection Agency is one of several agencies involved in the push to develop ways to lower emissions and help protect the environment. Of course, many are interested in the idea of increasing ways to become more environmentally conscious, but at what cost? With many concerned over the national debt issues, will this increase mean more money out of everyone’s pocket?
The Obama Administration is talking about raising the standard miles per gallon to 56.2 for passenger cars by 2025. That is nearly double the current standard of 27.5 mpg. Better fuel economy means less gas consumption and, therefore, less pain at the pump, right? Many people are left wondering what this will mean for the economy.
Some economists are suggesting the increase won’t produce the desired effect for many reasons. First, by raising the mpg standard, people will be forced to make choices between which type of car to buy. How the consumer behaves with that car is still unregulated. For example, a person may buy a car with a higher mpg standard but drive two to three times as far, or more often, than someone that owns a car with a lesser mpg standard. Thus, cancelling out the desired effect. Additionally, a car with a higher standard mpg saves the consumer money at the pump, which frees them up to justify using their car over public transport or carpooling. People may consume more fuel than before due to the “savings” they are seeing at the pump.
Second, with an increase in the standard mpg requirement comes the issue of justifying an increase in fuel tax. Currently, one of the biggest arguments posed by the government to raise fuel costs is to increase the budget to develop technology to save on fuel costs. With an increase the in efficiency of fuel economy requirements, comes an increase in the burden of proof the government will have to meet in the future justify increases in fuel tax.