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Just because emissions standards are needed does not mean fuel standards are. Customer can decide how important fuel consumption is when purchasing their cars,

Just because emissions standards are needed does not mean fuel standards are. Customer can decide how important fuel consumption is when purchasing their cars, it's not a tragedy of the commons situation. CAFE != any sort of reasonable or cost effective way of limiting CO2 emissions.

mrguyorama 9y ago
Less fuel burned DIRECTLY results in less CO2 created.
- valuearb 9y ago
  The cost of CAFE isn't proportionate to the amount of C02 saved. If you build exotic sports cars, for one example, you have to pay far higher CAFE penalties because of their worse MPG averages, yet your customers drive their sports cars far few miles and use much less fuel than the typical cars. Worse, because you don't have any small commuter cars in your lineup, you have to pay more in penalties than another car company that does. Assume Company A specializes in SUVs, and sells 1M a year. It pays a big penalty for their poor mileage. Company B makes nothing but compact commuter cars that get high mileage, and pays zero in penalties for its cars it sells a year, as it should. Now company C, builds SUVs with the same MPG average as company A, but has an licensing deal where company B makes 1M small high MPG commuter cars a year for C to resell under it's brand. Company C now pays little to no penalties, despite selling the exact number of gas guzzling SUVs as company A. And those small cars would have been made and sold by company C if the licensing deal didn't exist. CAFE is a dumb law, and a bad solution to the problem of emissions. It's a big reason for the bankruptcy of US car companies during the last economic crisis. US car companies were bad at making small cars because their labor costs were so high, but they could make big SUVs and bigger cars profitably because labor costs were proportionately less. CAFE would be much better if it simply applied directly to the car you purchased, regardless of manufacturer, and was an annual tax based on miles driven and MPG.
  - KozmoNau7 9y ago
    Paying the workers a decent wage caused the US auto industry to fail? It was about time, then.
    - valuearb 9y ago
      Before the bankruptcy, the US Autoworker cost roughly $100 an hour. One hundred dollars an hour. It wasn't cash compensation. I think they actually cost roughly $35 an hour in cash compensation (including payroll taxes and other direct costs). But the auto makers had to also ante up nearly twice as much more to cover pension and medical plan contributions for their workers, their families and their retirees. Now, I'm not saying it wasn't their fault, at least at some level. Productivity has reduced the amount of worker hours needed per car for the last hundred years, and that, along with the rise of german and japanese car makers, reduced the size of the domestic car makers workforces. In 1979 UAW membership peaked at 1.5M, in 2008 it was 650,000. The costs of covering the medical and retirement needs of 700,000 retirees is a lot higher proportion of your average wage with 650k workers than it was with 1.5M. Essentially management thought they'd never lose their massive market share, and didn't account for the ongoing march of increasing productivity. However they got there, those costs meant that the more labor costs a car had in proportion to it's sales price, the less competitive it would be for US car makers. That eventually meant that muscle cars, trucks, and SUVs were their only profitable cars, while they got killed by the Japanese and europeans on small cars. It's just another reason CAFE is dumb. Automakers never should have gotten credits for making small cars. It gave foreign car makers a substantial competitive advantage.
      - KozmoNau7 9y ago
        >Before the bankruptcy, the US Autoworker cost roughly $100 an hour. One hundred dollars an hour. That is a misleading metric in this context. All employees cost significantly more than their direct paycheck, because of pension payments, healthcare and such. $100 sounds very reasonable.
        valuearb 9y ago

mrguyorama 9y ago

Less fuel burned DIRECTLY results in less CO2 created.

valuearb 9y ago
The cost of CAFE isn't proportionate to the amount of C02 saved. If you build exotic sports cars, for one example, you have to pay far higher CAFE penalties because of their worse MPG averages, yet your customers drive their sports cars far few miles and use much less fuel than the typical cars. Worse, because you don't have any small commuter cars in your lineup, you have to pay more in penalties than another car company that does. Assume Company A specializes in SUVs, and sells 1M a year. It pays a big penalty for their poor mileage. Company B makes nothing but compact commuter cars that get high mileage, and pays zero in penalties for its cars it sells a year, as it should. Now company C, builds SUVs with the same MPG average as company A, but has an licensing deal where company B makes 1M small high MPG commuter cars a year for C to resell under it's brand. Company C now pays little to no penalties, despite selling the exact number of gas guzzling SUVs as company A. And those small cars would have been made and sold by company C if the licensing deal didn't exist. CAFE is a dumb law, and a bad solution to the problem of emissions. It's a big reason for the bankruptcy of US car companies during the last economic crisis. US car companies were bad at making small cars because their labor costs were so high, but they could make big SUVs and bigger cars profitably because labor costs were proportionately less. CAFE would be much better if it simply applied directly to the car you purchased, regardless of manufacturer, and was an annual tax based on miles driven and MPG.
- KozmoNau7 9y ago
  Paying the workers a decent wage caused the US auto industry to fail? It was about time, then.
  - valuearb 9y ago
    Before the bankruptcy, the US Autoworker cost roughly $100 an hour. One hundred dollars an hour. It wasn't cash compensation. I think they actually cost roughly $35 an hour in cash compensation (including payroll taxes and other direct costs). But the auto makers had to also ante up nearly twice as much more to cover pension and medical plan contributions for their workers, their families and their retirees. Now, I'm not saying it wasn't their fault, at least at some level. Productivity has reduced the amount of worker hours needed per car for the last hundred years, and that, along with the rise of german and japanese car makers, reduced the size of the domestic car makers workforces. In 1979 UAW membership peaked at 1.5M, in 2008 it was 650,000. The costs of covering the medical and retirement needs of 700,000 retirees is a lot higher proportion of your average wage with 650k workers than it was with 1.5M. Essentially management thought they'd never lose their massive market share, and didn't account for the ongoing march of increasing productivity. However they got there, those costs meant that the more labor costs a car had in proportion to it's sales price, the less competitive it would be for US car makers. That eventually meant that muscle cars, trucks, and SUVs were their only profitable cars, while they got killed by the Japanese and europeans on small cars. It's just another reason CAFE is dumb. Automakers never should have gotten credits for making small cars. It gave foreign car makers a substantial competitive advantage.
    - KozmoNau7 9y ago
      >Before the bankruptcy, the US Autoworker cost roughly $100 an hour. One hundred dollars an hour. That is a misleading metric in this context. All employees cost significantly more than their direct paycheck, because of pension payments, healthcare and such. $100 sounds very reasonable.
      - valuearb 9y ago