September 20, 2014
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Scientist says tax gas for “better” mileage

According to an MIT scientist, contrary to common perception, the major automakers really have produced large increases in fuel efficiency through better technology in recent decades. There’s just one catch: All those advances have barely increased the mileage per gallon that autos actually achieve on the road.

Sound perplexing?

This situation is the result of a trend newly quantified by MIT economist Christopher Knittel, who asserts that, because automobiles are bigger and more powerful than they were three decades ago, major innovations in fuel efficiency have only produced minor gains in gas mileage.

Between 1980 and 2006, the average mileage in the United States increased by slightly more than 15 percent — a relatively modest improvement. During that time, Knittel has found, the average curb weight of those vehicles increased 26 percent, while their horsepower rose 107 percent. All factors being equal, fuel economy actually increased by 60 percent between 1980 and 2006, as Knittel shows in a new research paper, “Automobiles on Steroids,” published in the American Economic Review.

If Americans today were driving cars the same size and power that were typical in 1980, autos would have jumped from an average of about 23 miles per gallon (mpg) to roughly 37 mpg, well above the current average of around 27 mpg. Instead, Knittel says, “Most of that technological progress has gone into [compensating for] weight and horsepower.”

Considering that the transportation produces more than 30 percent of U.S. greenhouse gases, turning innovation into increased overall mileage would produce notable benefits. Knittel thinks it is understandable that consumers would opt for larger powerful vehicles, so the most logical way to reduce emissions is through an increased gas tax that would lead to fuel efficiency.

“When it comes to climate change, leaving the market alone isn’t going to lead to the efficient outcome,” Knittel says. “The right starting point is a gas tax.”

While industry critics have long called for new types of vehicles, like gas-electric hybrids, Knittel’s research underscores the many ways that conventional internal-combustion engines have improved: Efficient fuel-injection systems have replaced carburetors; most vehicles now have multiple camshafts, allowing for a smoother flow of fuel, air and exhaust in engines; and variable-speed transmissions have let engines better regulate revolutions to save fuel.

The introduction of hybrids is also helping fleet-wide fuel efficiency. Of the thousands of autos Knittel scrutinized, the most fuel-efficient was the 2000 Honda Insight, the first hybrid model to enter mass production, at more than 70 mpg (the least fuel-efficient car sold in the United States that Knittel found was the 1990 Lamborghini Countach, a high-end sports car that averaged fewer than nine mpg).

Knittel drew upon data from the National Highway Transportation Safety Administration, auto manufacturers and trade journals. As those numbers showed, a major reason mileage has only slowly increased is that so many Americans have chosen to buy bigger, less fuel-efficient vehicles. In 1980, light trucks represented about 20 percent of passenger vehicles. By 2004, light trucks and SUVs accounted for 51 percent of passenger-vehicle sales.

“I find little fault with the auto manufacturers, because there has been no incentive to put technologies into overall fuel economy,” Knittel says. “Firms are going to give consumers what they want, and if gas prices are low, consumers are going to want big, fast cars.”

And between 1980 and 2004, gas prices dropped by 30 percent when adjusted for inflation. Knittel asserts that consumer preferences will inhibit changes in fleet-wide gas mileage.

“It’s the policymakers’ responsibility to create a structure that leads to these technologies being put toward fuel economy,” he says.

Among environmentalists, a surcharge on fuel is widely supported. “I think 98 percent of economists would say that we need higher gas taxes,” Knittel says.

Instead, the major policy advance in this area occurring under the current administration has been a mandated rise in CAFE standards, the Corporate Average Fuel Economy of cars and trucks. In July, President Barack Obama announced new standards calling for a fleet-wide average of 35.5 mpg by 2016, and 54.5 mpg by 2025.

According to Knittel’s calculations, the automakers could meet the new CAFE standards by simply maintaining the rate of technological innovation experienced since 1980 while reducing the weight and horsepower of the average vehicle sold by 25 percent. Alternately, Knittel notes, a shift back to the average weight and power seen in 1980, along with the trend toward greater fuel efficiency, would lead to an average of 52 mpg by 2020.

Knittel is skeptical that CAFE standards by themselves will have the impact a gas tax would. Mileage regulations end up reducing the cost of driving and people drive more than they would have. He believes a tax would create demand for more fuel-efficient cars without as much “rebound;” the phenomenon through which greater efficiency leads to greater consumption.

Fuel efficiency, Knittel says, has come a long way in recent decades. But when it comes to those advances having an impact out on the road, there is still a long way to go.


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