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September 23, 2004

Stakes High as California Targets Greenhouse Gas from Cars

The Los Angeles Times reports, "California, long a leader in cutting-edge rules to combat air pollution, is poised this week to adopt the world's first regulation to reduce car emissions that contribute to global warming. The state's latest attempt to be an environmental trailblazer is almost certain to bring a legal challenge from the automobile industry, which accuses the state of using global warming as an excuse to set a new gasoline mileage standard for the entire nation. It also sets up a confrontation between Gov. Arnold Schwarzenegger and the Bush administration over the scope of the state's authority to regulate cars."

In Do Regulations Requiring Light Trucks To Be More Fuel Efficient Make Economic Sense? An Evaluation of NHTSA’s Proposed Standards, Randall Lutter and Troy Kravitz argue against Corporate Average Fuel Economy (CAFE) standards, since they increase congestion, accidents, and noise by lowering the cost of driving. David Gerard and Lester Lave defend fuel economy standards in their paper The Economics of CAFE Reconsidered: A Response to CAFE Critics and A Case for Fuel Economy Standards. While the authors agree that the externalities caused by driving require a form of corrective policy, they contend that Lutter, Kravitz and other CAFE critics merely made a case for a gasoline tax, and not a case against CAFE.

Also of interest from the Joint Center:

Impacts of Long-Range Increases in the Corporate Average Fuel Economy (CAFE) Standard Andrew N. Kleit

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