Carbon emissions: Is a gas tax the answer?

You’ve probably noticed that the slow and steady emergence of electric cars is somewhat of a hot topic around these parts. But in case you missed it, the old-fashioned internal combustion engine technology that still powers the vast majority of cars has been undergoing its own eco-renaissance.

According to a recent report by Reuters, “…new cars with traditional engines are showing striking fuel efficiency gains thanks to technologies such as turbochargers, direct injection, and engines that shut down when the vehicle stops, then spring back to life when the driver presses the accelerator.”

To put a number on all this progress, cars on the road today are 60 percent more fuel efficiency than what we were driving just 20 years ago. Yet for some reason, the average driver has yet to see it translate into a significant boost in gas mileage. For instance, in 1980, the country’s fleet of autos offered car owners an average of about 23 miles per gallon, whereas by 2006 that average increased just slightly to around 27 mpg.

So what gives?

Christopher Knittel, an economist at MIT, has sifted through many of these confounding figures and came up with an explanation. All these gains in fuel economy, he says, have been offset by the fact that cars on the road today have also become bigger and more powerful. His analysis found that during that 26 year period, the average curb weight of vehicles increased 26 percent, while their horsepower rose 107 percent. And had that not been the case, a typical vehicle today would boast an average mileage rating of 37 mpg.

I know it sounds a bit counter-intuitive but here’s additional evidence of consumers trending toward ever-more muscular cars: In 1980, light trucks represented about 20 percent of passenger vehicles sold in the United States. By 2004, light trucks — including SUVs — accounted for 51 percent of passenger-vehicle sales.

• Related: Will drivers ever embrace the electric car?
• Related: $20,000, 350-mile-per-charge electric car only a few years away

To conduct the study, detailed in the journal American Economic Review as part of a report titled “Automobiles on Steroids,” Knittel drew upon data from the National Highway Transportation Safety Administration, auto manufacturers and trade journals.

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

Even from a mile away, we can all see what he’s getting at. While the benefits of better gas mileage and reduced emissions are attractive selling points, it appears that most consumers would still rather eschew them for something along the lines of an SUV or Dodge Ram. So there you have it. Once again, just more proof that free market forces are at odds with the environmental imperative. Still, the solution Knittel proposes, which works similarly in principle to taxing cigarette smokers, does come off as somewhat radical.

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

So far, government has opted for a less meddlesome approach to curb emissions by putting the impetus on car manufacturers instead of the consumers. The Obama administration has required that the industry design vehicles that meet certain fuel economy benchmarks known as the Corporate Average Fuel Economy or CAFE standards. For instance, future models are expected to travel an average of 35.5 mpg by 2016, and 54.5 mpg by 2025.

These rules, according to Knittel’s calculations, may lead to car companies rolling back the weight and horsepower capacity in future models as well as potentially spurring further innovation in fuel efficiency technologies. But even so, Knittel foresees any such gains being further offset by what he calls a “rebound effect,” where an apparently ideal scenario ends up encouraging people to drive even more. A gas tax, he believes, would create demand for more fuel-efficient cars without as much rebound, the phenomenon through which greater efficiency leads to potentially greater consumption.

“I think 98 percent of economists would say that we need higher gas taxes,” he added.

So… this is the part where I pose the question to the always-informed and opinionated SmartPlanet readership: Is a gas tax the best way to curb emissions?

(via MIT)

Learn more about fuel efficient technologies:

• ‘Supertruck’ big rig design doubles fuel efficiency
• New electric car 2x more fuel efficient than Nissan Leaf
• New engine radically improves fuel economy, cuts emissions
• New 9-speed transmission also a gas saver
• Gas-powered diesel engine may double fuel efficiency
• Ford’s powerful mini-motor saves fuel, cuts emissions